Religious Tax Exemption and The Religious Freedom Restoration Act

An interesting controversy is brewing in Iowa.  The Iowaska Church of Healing, pictured above and the edifice of which also doubles as a personal residence, is challenging the denial of its application for tax exempt status, citing the Religious Freedom Restoration Act.  Here are allegations from the complaint describing the gist of a familiar dispute (whether the use of controlled substances in religious ceremonies preclude church tax exemption) that seems reinvigorated by the RFRA.

7. The Defendant’s denial of tax-exemption to Plaintiff directly contradicts the United States Supreme Court’s ruling in Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006), which is controlling in this case . . . 

14. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006) involved a church whose members received communion by drinking Ayahuasca in the form of a tea brewed from plants found in the Amazonian Rainforest. The tea contained DMT, a Schedule I controlled substance. After U.S. Customs seized a shipment of Ayahuasca that was destined for the church and threatened prosecution under the CSA, the church filed suit for declaratory and injunctive relief arguing that application of the CSA to the church’s use of Ayahuasca violated the RFRA. Of central importance to Plaintiff’s instant case, the government conceded that the sacramental use of Ayahuasca is a sincere exercise of religion. O Centro 546 U.S. at 1. Nevertheless, the government argued that its sacramental use by the church was prohibited under the CSA. The Supreme Court ruled that the government’s actions violated the RFRA and affirmed the lower court’s preliminary injunction in favor of the church.

This article provides more background.  The Church’s website contains this summary:

Iowaska Church of Healing has applied for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, and is working with the U.S. Department of Justice, Drug Enforcement Administration, as well as state authorities to ensure compliance with all laws affecting sacramental use of Ayahuasca.

The United States Supreme Court has expressly recognized the sacramental use of Ayahuasca in religious ceremonies. In its 2006 decision styled Gonzales v. O Centro Espirita Beneficente uniao do Vegetal (UDV), the Supreme Court addressed the use of Ayahuasca during religious ceremonies and held that the government had impermissibly burdened the church members’ exercise of their religion when it confiscated an Ayahuasca shipment being delivered to the church. The members of UDV received the sacrament of Ayahuasca in the form of tea containing Dimethyltryptamine (DMT). The government argued that because DMT is a Schedule I drug under the federal Controlled Substances Act, its religious use was under that statute. The government conceded that the sacramental use of Ayahuasca by the UDV church members was a sincere exercise of religion but argued that the Controlled Substances Act provided no exception for its usage.

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