Letter to Steven Mnuchin, Secretary of the Treasury, and Jovita Carranza, Administrator of the Small Business Administration, and Eugene Scalia, Sec. of Labor - Johnson, Richmond, Scalise, Clyburn, Agencies: Do Not Impose Arbitrary Condition on Churches' Eligibility for Coronavirus Relief Funds

Letter

Dear Secretary Mnuchin, Administrator Carranza, and Secretary Scalia,

We write to you today to convey Congress's intent with respect to provisions of the newly passed Coronavirus Aid, Relief and Economic Security (CARES) Act, H.R. 748, and request your confirmation that the statute will be implemented consistent with such intent. Failure to do so would arbitrarily harm many houses of worship across the nation.

While this bipartisan legislation is designed to provide immediate relief to all American businesses and non-profits that are experiencing unprecedented challenges as a result of the current pandemic, it has come to our attention that certain non-profits--the many churches, synagogues, mosques, temples, and other organizations that are not required to file Form 1023 for recognition of exemption under Internal Revenue Code section 501(c)(3)--may not be afforded equal access to the bill's relief measures. The sections of the CARES Act for which non-profit organizations are eligible are Section 1102 -- Paycheck protection program; Section 1110 -- Emergency Economic Injury Disaster Loan (EIDL) grants; Section 2103 -- Emergency unemployment relief for government entities and non-profit organizations; and Section 4003 -- Emergency relief and taxpayer protections. In the midst of this crisis, Congress did not intend for a non-profit organization's eligibility for this assistance to hinge on whether it previously submitted a form it was not legally required to submit.

As you know, for federal income tax purposes, churches and other places of worship are treated as organizations described in section 501(c)(3) of the Internal Revenue Code without applying for a formal exemption determination letter. Because of this, many smaller and independent houses of worship have never formally applied for and paid the fee to receive an exemption determination letter. Although some houses of worship are included in group exemptions if a house of worship is part of a larger denominational organization, many smaller congregations do not have such an affiliation. Section 1102 of the CARES Act defines non-profit organization as "an organization that is described in 501(c)(3) of the Internal Revenue Code of 1986 and that is exempt from taxation under section 501(a) of such Code." This definition clearly requires that non-profits which meet the delineated criteria be deemed eligible; possession of a formal IRS exemption determination letter is not an additional criterion, and adding it administratively would be contrary to the plain meaning of the text of the statute.

While the definition of non-profit organization in Section 1102 explicitly applies only to the paycheck protection program under Section 7(a) of the Small Business Act established by that section, we can assure you that Congress did not intend to require non-profits to possess an exemption determination letter to be eligible for assistance through any other section of the CARES Act either. We respectfully urge you to take the necessary administrative action to ensure congressional intent is effectuated.

Just as any other business or non-profit, a local religious institution typically has several staff members on its payroll and operates on a thin margin. In so many places, these houses of worship are also the heart and soul of their respective communities, providing leadership, spiritual guidance and a sense of belonging for countless Americans. In times of disaster, our faith communities are the primary providers of charitable giving, emotional support and volunteer efforts. Houses of worship lacking an exemption determination letter must not be treated differently than other 501(c)(3) organizations under the CARES Act merely because they do not possess paperwork that the IRS does not require for tax-exempt status and Congress did not include as an eligibility requirement.

Many houses of worship and their congregations would suffer great harm if they are not eligible to receive the assistance Congress intended for them to receive. We respectfully ask that assurance be provided to our offices that lack of an exemption determination letter will not be an obstacle to eligibility for assistance under the provisions of the CARES Act administered by your departments and agencies. We are asking that this assurance be provided immediately as to not delay any critical resources to these faith communities. As our great nation heals from the profound effects of coronavirus, churches, synagogues, mosques, temples, and all other venues for worship and solace will be needed more than ever.

We thank you in advance for your time and prompt attention to this matter.

Sincerely,