Tuesday, March 7, 2017

Religious Organizations, Refuge for Undocumented Immigrants, and Tax Exemption

By Professor Ellen P. Aprill

This op-ed originally appeared in the Los Angeles Daily Journal.

For many houses of worship, the Biblical injunction, “You should not wrong a stranger or oppress him, for you were strangers in the land of Egypt” (Exodus 22:21, JPS), constitutes an important religious doctrine. The Trump administration has announced plans for aggressive enforcement of immigration laws, plans that are expected to expand massively the number of people detained and deported. This new policy has forced many houses of worship and other religious organizations to consider whether their beliefs call upon them to grant refuge or so-called sanctuary to undocumented immigrants.

Under long-standing immigration laws, harboring undocumented immigrants carries the potential for both fines and imprisonment. An organization can lose its exempt status if its purpose is illegal. Moreover, illegal activity is deemed not to further an exempt purpose, and an organization can also lose its exempt status if a substantial part of its activities are not in furtherance of its exempt purpose. Houses of worship and religious organizations face some risk, at least in theory, of losing exemption for such activity. As a practical matter, loss of exemption is unlikely, but the organization needs to document the religious basis for its actions and the criteria it will use.

One piece of official IRS guidance offers important guidance. It involved an organization formed to educate the public on the principles of pacifism and nonviolent action, including civil disobedience. This 1975 “Revenue Ruling” explains that no Section 501(c)(3) organization can have an illegal purpose. The ruling’s analysis, however, emphasized the group’s primary activities of undertaking protest demonstrations and other nonviolent actions, including deliberately blocking traffic, disrupting the work of government, and preventing the movement of supplies, all breaches of the peace in violation of local ordinances. The ruling concluded that the organization’s activities “demonstrate an illegal purpose which is inconsistent with charitable ends.” The Tax Court in Church of Scientology of California v. Commissioner similarly concluded that pervasive illegal activities, including a number of felony convictions, constituted an illegal purpose and that the organization’s claimed status as a church did not protect it from application of the illegality doctrine.