The Freedom From Religion Foundation filed suit on October 10, 2018, in D.C. district court challenging the preferential exemption of churches and related organizations from reporting the Form 990 annual information returns required of all other tax-exempt groups. Plaintiff was Nonbelief Relief. The defendant was David J. Kautter, then acting IRS commissioner.
Nonbelief Relief, a humanitarian group, was created by FFRF’s executive board in 2015 as a separate 501(c)(3) entity for atheists, agnostics and freethinkers to remediate conditions of human suffering and injustice on a global scale “whether the result of natural disasters, human actions or adherence to religious dogma.” That relief included, but was not limited to, assistance to individuals targeted for nonbelief, secular activism or blasphemy.
The IRS refused a request by Nonbelief Relief to be excused from registering the annual Form 990, citing the discriminatory treatment of churches vis-à-vis other tax-exempt nonprofits. Nonbelief Relief’s tax exemption was revoked on Aug. 20, 2018, for failure to file the Form 990 return for three consecutive years. Nonbelief Relief “has and will suffer harm, detriment and disadvantage as a result of the revocation of its tax-exempt status, including tax liabilities and loss of charitable donations which are no longer tax-deductible by donors.”
Representing FFRF in the suit was outside litigator Richard L. Bolton, with FFRF Attorneys Patrick Elliott and Sam Grover serving as co-counsel. The lawsuit was filed in the U.S. District Court for the District of Columbia.
Case number 18-CV-2347. The case was assigned to U.S. District Judge Timothy Kelly.
- Initial Press Release
- Exhibit 1
- Exhibit 2
- Press Release: FFRF to continue challenging church tax benefits
- Order on Motion to Dismiss
- Memorandum Opinion
On January 10, 2020, this case was thrown out of court after Judge Timothy J. Kelly dismissed the challenge filed by FFRF. However, the opinion noted that the “decision does not mean that the church exemption is immune from judicial review. NonBelief Relief could claim a refund for the taxes it paid, and sue when the refund was denied, arguing that its 501(c)(3) status was unconstitutionally revoked.” Nonbelief Relief will seek a refund on its taxes and FFRF will refile the suit if this refund is refused.