American Atheists v. Shulman 

How you can help

This case has the potential to undo the discrimination that has been written into our tax code. We have no doubt that this is a case that will go all the way to the Supreme Court. To help ensure that American Atheists has the resources we need to carry this case to the end, we need your help. Please consider making a tax-deductible gift to American Atheists to support our critically important legal work. 

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Introduction

On December 12, 2012, American Atheists and two co-plaintiffs filed a lawsuit in U.S. District Court in the Eastern District of Kentucky demanding that the Internal Revenue Service (IRS) stop giving preferential treatment to churches and religious organizations via the process of receiving non-profit tax-exempt status under the Internal Revue Code (IRC) procedures and definitions.IRS

Groups like American Atheists receive tax-exempt status under Internal Revenue Code 501(c)(3) but, because the organization is not classified as religious, it costs American Atheists and other secular non-profits significantly more money each year to maintain that status. In this lawsuit, American atheists and the other plaintiffs are demanding that all tax-exempt organizations, including those characterized as religious by the IRS, have the same requirements to achieve and maintain tax-exempt status.

In order to qualify for nonprofit tax-exempt status, any religious or secular organization must demonstrate it exists to benefit the public. After that basic element is established, religious non-profits are almost always declared automatically tax-exempt under the current IRC rules and definitions. However, secular non-profits face a lengthy application and a fee, which can be as high as $850. 

Religious organizations and churches are treated differently from secular organizations. The exemptions are applied in a way that discriminates solely on the basis of whether an entity’s members express beliefs and practices accepted as religious. The IRS treats your organization better if you profess belief in a supernatural deity.

The lawsuit also covers discrepancies in how secular and religious organizations are treated in maintaining their tax-exempt statuses. Secular nonprofits complete Form 990 annually, which details information about finances, donors, volunteers, and personnel; the IRS estimates it requires 211 hours to complete the Form 990, which is then public information. Religious nonprofits are exempted from filing the Form 990, so there is no public record about their finances, donors, volunteers, or personnel.

This requirement can put organizations like American Atheists at a fundraising disadvantage compared to religious groups because many people choose not to reveal their atheism for fear of prejudice and discrimination.

American Atheists and its co-plaintiffs are asking the Court to find that such disparity of treatment between religious and secular non-profit organizations is unconstitutional and require the IRS to make the tax-exempt filing process uniform for all nonprofit organizations.

Government Motion to Dismiss

On June 7, 2013, the United States government filed a motion to dismiss our lawsuit. In their filing, the Government, among other things, challenged American Atheists' standing to bring such a suit, alleging that we had suffered no real harm from their preferential treatment of religious groups in tax filings. 

On August 6, 2013, American Atheists filed a response to the Government's motion to dismiss

Oral Arguments

On November 21, 2013, American Atheists' National Legal Director Edwin Kagin argued the case before the United States District Court, Eastern District of Kentucky, in Covington, Kentucky. The case was heard by Senior Judge William O. Bertelsman. The full name of this case is American Atheists, Inc. v. Shulman.

Distrit Court Rules 

On May 19, 2014, the District Court ruled on the government's motion to dismiss. The Court ruled in favor of the government's motion. The full ruling is available here. American Atheists is currently evaluating the decision and will determine the next steps shortly.

American Atheists Center
PO Box 158, Cranford, NJ 07016
Phone: 908.276.7300

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