HR-9722-119
Placed on the Union Calendar, Calendar No. 680.
Sponsored by Blake Moore (R-UT)
What it does
This bill would amend the Internal Revenue Code so the IRS cannot treat a religious belief or practice about marriage, sexuality, or gender identity as "inconsistent with law or public policy" when deciding whether an organization qualifies for tax-exempt status under Section 501. It would also specify that a belief does not lose its status as "religious" merely because it is not required by or central to an organized religious system. The change would apply to tax years beginning after December 31, 2025.
Who benefits
Religious organizations, schools, and charities that hold traditional beliefs about marriage, sexuality, or gender identity (e.g., opposing same-sex marriage or restricting roles based on sex) and that might otherwise face IRS scrutiny or exempt-status challenges similar to the reasoning used in Bob Jones University v. United States. Faith-based nonprofits, religious colleges, and adoption or social-service agencies with such doctrinal positions would gain clearer legal protection for their tax-exempt status.
Who is hurt
LGBTQ individuals and advocacy groups who argue this could shield organizations that discriminate in employment, housing, adoption, or services from IRS accountability. Employees, students, or clients of affected organizations who may face differential treatment based on sexual orientation or gender identity, and who would have one fewer avenue (loss of tax-exempt status) to challenge such treatment. The federal government would also see reduced discretion to condition tax exemption on nondiscrimination policies in this area.
Supporters argue
Supporters argue the bill protects religious organizations from having their tax-exempt status challenged or revoked simply because their doctrinal beliefs about marriage, sexuality, or gender differ from current government policy, preventing a repeat of situations like Bob Jones University where the IRS revoked exemption based on a policy judgment about the organization's practices. They contend the bill also protects sincerely held beliefs even when they are not mandated by a formal religious hierarchy, aligning tax law with First Amendment free-exercise protections.
Opponents argue
Opponents argue the bill would insulate organizations that discriminate against LGBTQ people from a key enforcement tool the IRS has historically used, following the precedent of Bob Jones University v. United States, where the Supreme Court upheld denying tax exemption to institutions whose practices violate fundamental public policy. They contend this could allow taxpayer-subsidized organizations to deny employment, services, or benefits based on sexual orientation or gender identity while retaining exempt status, effectively using the tax code to shield discriminatory conduct.
Constitutional context
This bill implicates the Free Exercise Clause of the First Amendment and Congress's taxing power under Article I, Section 8, with Bob Jones University v. United States (1983) as the controlling precedent — that case held the IRS may deny tax-exempt status to institutions whose practices contravene fundamental public policy, and this bill would legislatively limit that authority as applied to beliefs about marriage, sexuality, and gender identity.
Checks and balances
Congress would use its taxing and legislative power to constrain IRS administrative discretion in interpreting "public policy" limitations on tax exemption, with courts retaining the ability to review disputes over the statute's application under the Free Exercise Clause and equal protection principles.
Historical precedent
This bill responds directly to the framework established in Bob Jones University v. United States (1983), in which the IRS revoked a university's tax-exempt status over racially discriminatory policies deemed contrary to public policy, a precedent later invoked in disputes over LGBTQ-related exemption questions.