Action Alert

Please take action to help protect state/church separation and close this tax loophole

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The Internal Revenue Service is seeking public comments on a proposed rule that, among other things, puts a stop to a widespread practice of taxpayers legally profiting from donating to private religious schools. Pro-voucher activists are opposing this change by flooding the IRS with comments asking them to leave this loophole open. We need your help to fight back and convince the IRS to follow through with this common-sense proposed rule.

Here’s how this tax loophole works: First, some states provide dollar-for-dollar tax credits for donations to educational scholarship programs, which keep some of the funds for themselves and pass the rest onto private schools, most of which are religious. If you donate $100,000, the state takes $100,000 off of your state tax bill. Second, the federal government gives a deduction on federal taxes on the same donation. After donating $100,000 and having the state pay you back in full, you also get to deduct $100,000 from your federal taxes.

For more details about the proposed rule and how this loophole advances religion, you can read FFRF’s formal comment

Please take action today and tell the IRS that taxpayers should not be financially incentivized to donate to private religious schools. You can use or adapt our sample language below, or come up with your own. Comments are due soon, so please take action today!

To submit a comment, follow this link and click on the green button that says “SUBMIT A FORMAL COMMENT.” Public comments are due TOMORROW, so please take action right away.

TALKING POINTS

I support the proposed rule change to stop the tax loophole that allows donors to educational scholarship programs to double dip on state and federal tax exemptions. Under current rules, taxpayers who donate to educational scholarship programs may deduct the donation from federal income tax in addition to a dollar-for dollar state tax credit.
 
Educational scholarship programs divert funds that should go to public schools into the coffers of private schools, the vast majority of which are religious, and into the pockets of scholarship program administrators. This system, like private school voucher systems, invites fraud due to a lack of accountability and devastates public schools.
 
There is no legitimate reason for the federal government to encourage taxpayers to donate to educational scholarship programs. The government should be focused on promoting secular public education and should never incentivize taxpayers to fund religion. Allowing taxpayers to profit from a donation to an educational scholarship program directly encourages taxpayers to support religion. It also stretches the credulity of the term “donation.” This is inappropriate and violates our country’s core principle of keeping church and state separate.

It is improper and imprudent to incentivize taxpayers to divert their funds from public schools to private religious schools, much less to profit from such a “donation.” Therefore, I urge the Internal Revenue Service to put into place this proposed regulation that closes this outrageous tax loophole.

FFRF is a non-profit, educational organization. All dues and donations are deductible for income-tax purposes.

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