First Church of Cannabis receives I.R.S. approval

According to the Indianapolis Star, the First Church of Cannabis has received approval as a 501(c)(3) organization. This raises a few thoughts.



First, I wonder whether the First Church of Cannabis filled out the year-old 1023EZ, which is essentially an automatic grant for groups who can fill out the right boxes and verify that they expect less than $50,000 in operating expenses. If not, this was a pretty quick turnaround for the regular 1023 process.

Second, the filing actually does little to help the "church's" case that it is indeed a religion. Section 501(c) of the tax code has several categories of nonprofit entities, from public charities (these are most of the 501(c)(3) entities we hear about so often), which receive most of their funding from a broad group of donors, to private charities, business groups, government entities, and labor unions. All of these groups are exempt from paying taxes, but only a few receive the added benefit of tax benefits to their donors as well.

While it certainly is acceptable for a church to ask the I.R.S. to determine that it qualifies as a public charity, many churches do not do this. That's because they don't have to. Section 508(c)(1)(A) of the tax code specifically exempts "churches, their integrated auxiliaries, and conventions or associations of churches" from giving notice to the I.R.S. when they are formed. Similarly, churches are not required to provide annual financial reports like other nonprofits, though the I.R.S. can technically audit them to investigate whether they are in fact churches. (By the way, there are practical reasons that many churches get recognized by the I.R.S., but that is not the purpose of this post.)

Additionally, it is still possible that the I.R.S. could investigation the group further and then revoke the tax exemption based on its purpose or insincerity.

If the First Church of Cannabis was not a church, it would certainly have to apply for 501(c)(3) status. But if it were, it would not have to obtain that recognition, but it could.

Third, and related to the second thought, recognition by the I.R.S. or Indiana's Secretary of State as a nonprofit does not mean a new religion can meet the definition of "religion" under Indiana's or the federal Religious Freedom Restoration acts. There have been similar groups that courts have found not to be legitimate religions but shams to avoid laws against marijuana possession and use.

Finally, this group could present a case to test Indiana's new law, but it could benefit from law enforcement looking the other way to avoid controversy early in the law's effectiveness. The question of whether police will arrest any "church" members is just as intriguing as whether a court will see the group as a legitimate religion.

Check out the story from MSNBC on the First Church of Cannabis here.



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