An independent Baptist church near Philadelphia has fired the first salvo against a law requiring nonprofit organizations to pay social security taxes for their employees. Bethel Baptist Church of Sellersville, Pennsylvania, filed suit in U.S. District Court to recover tax revenues paid under protest last year and to challenge the constitutionality of the law. Renowned constitutional lawyer William Bentley Ball is representing the church.
Required participation in the social security system by churches and other voluntary groups was part of a massive reform passed by Congress in 1983 to keep the government insurance program afloat. It took effect at the beginning of 1984. Washington representatives of a number of religious organizations protested the law and devised a compromise that satisfied many church groups.
The law allows churches to make a one-time decision to opt out of social security participation. If a church goes that route, its employees are taxed as self-employed persons. The financial burden this presents is considerable: social security deductions total 11.3 percent of a self-employed person’s paycheck. A church that participates in social security, like any other employer, withholds 6.7 percent of each employee’s wages for social security taxes and contributes an additional 7 percent.
The complaint filed by Bethel Baptist Church asserts that there is no valid distinction between a tax on churches and a tax on its employees. Either way, its attorneys say, government is compelling churches to divert funds away from the religious purposes for which they were donated “into secular purposes determined by government.”
“This is really the first time religious exercise has been taxed,” said Richard A. Harris, pastor ...1
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