By Brother Stanley Culotta, C.S.C., M.D.
President of Holy Cross of San Antonio
Everyone is familiar with the expression, “the only definite things are death and taxes.” There isn’t much controversy with death but that cannot be said about taxes. Is there anyone who enjoys paying taxes? Do you enjoy paying taxes? Under one guise or another almost everyone pays school taxes. If you are a property owner then you almost certainly do pay school taxes. In principle this might be one of the taxes that is least opposed. Most of the opposition arises in its allocation. That aspect of school taxes has been addressed in previous articles and will be repeated again. But, there is another face of school taxes that needs to be unveiled. So accept the fact that your taxes have been assessed and paid and you have chosen to send your child or children to a Catholic school.
Well, since you have paid your school taxes and your tuition, one would expect to receive some special tax allowance. All Catholic schools are 501(c)(3) non-profit, tax exempt organizations. Qualifying donations to these organizations are deductible expenses. So, when April 15th comes around and you prepare your income tax return, you expect to have a deduction allowance or credit. Not so! You donate to your church and receive a deductible expense. How do you explain the conflict?
How does the IRS explain the conflict? There are two components to the explanation. The first component identifies (really rationalizes) tuition that is deductible by defining “an eligible educational institution” and “an eligible student,” as stated in IRS Publication 970:
An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. The educational institution should be able to tell you if it is an eligible educational institution.
An eligible student is a student who is enrolled in one or more courses at an eligible educational institution. The student must have either a high school diploma or a General Educational Development (GED) credential. http://www.irs.gov/publications/p970/
Does this definition describe your Catholic school? Does this eligibility include your child or children in a Catholic school? The answer to both of these questions is a resounding NO! Publication 970 is much more than these two statements. These eligibility requirements could have been stated in one simple sentence: Tuition paid for Catholic elementary and secondary school education is not a deductible expense. In an attempt to conceal the essence of their definitions, which is anti-Catholicism, a further clarification is presented.
When referring to institutions the IRS Code states, “Generally, you can deduct your contributions of money or property that you make to, or for the use of, a qualified organization”. Among the organizations listed as qualified organizations are “religious” and “educational” organizations. On the other hand, the IRS code states conditions in which you cannot claim a charitable contribution: “The part of a contribution from which you receive or expect to receive a benefit.” http://www.irs.gov/publications/p526/index.html
Those statements seem to follow that if you claim a deduction for the contribution that you make to your church when you attend services, then that is equivalent to stating that you received no benefit from the service! The same could be said about your donation to any qualified institution.
For more than two hundred years the expression “separation of church and state” was used to deny benefits to parents of children in Catholic schools. Supported by this popular battle cry, it was argued that Catholic schools are primarily religious organizations. But even though that expression was debunked by the Supreme Court in 2002 (Zelman v. Simmons-Harris), descendents of laws or statutes that accompanied the expression are still in effect. It is probably very difficult for people who are prejudiced to admit they are prejudiced and they are wrong, even when proven so.
Many parents choose a Catholic school because they want their children to receive the values that are compatible with their religious beliefs. But when these parents make that choice, they are forced to accept that the education entitlement is available only at a public school. They are forced to accept that the Catholic school they chose is not an eligible educational institution. They are forced to accept that the Catholic school is a religious organization but it is not a religious organization like the one in the IRS tax code. It used to be a religious organization when “separation of church and state” was popular. But finally, there is something true. Parents are forced to accept that they have received something of value for their tuition, a Catholic education. And therefore the tuition is not deductible. Yes, parents of children in Catholic schools incur double taxation: school taxes based on property ownership and taxable income that is used to pay for tuition.
When it comes to tax credits or deductions, Catholic parents who send their children to Catholic schools do not fall through the cracks. The IRS Tax Codes force these parents into the cracks.
To enact these tax laws that are anti-Catholic without saying anti-Catholic requires more literary dancing. This is the IRS Jitterbug!