Academic journal article Brigham Young University Law Review

Mormon Profit: Brigham Young, Tithing, and the Bureau of Internal Revenue

Academic journal article Brigham Young University Law Review

Mormon Profit: Brigham Young, Tithing, and the Bureau of Internal Revenue

Article excerpt


A little more than a century after the enactment of the modern income tax, the idea that churches are exempt from taxation seems inevitable. After all, "[c]hurches have been wholly or partially exempt from secular taxes since the time of Constantine at least."1 And, some assert, "[e]ver since our founding fathers, it's hands-off for federal income taxes, property taxes and more."2

In recent years, churches' exemptions have grown more politically polarizing. Critics of certain church actions have demanded that the churches' exemptions be revoked.3 Churches' defenders have demanded even more protection for church tax exemptions.4 But debates over the appropriate tax treatment of churches are stymied by the apparent inevitability of their exempt status.

This apparent inevitability of exempting churches from taxation elides the deliberate choices lawmakers and executive agencies have made, however. In fact, at the end of the 1860s and the beginning of the 1870s, a dispute arose over whether the government could tax the Mormon church.5 This dispute, largely forgotten today, made headlines in American papers when it happened.6 It demonstrates that there was no firm agreement that churches were inherently exempt from income taxation. The tax dispute between Mormon Prophet Brigham Young and the Bureau of Internal Revenue may provide a bridge underscoring both the power of religious tax exemptions and the fact that their status was a political choice, rather than a legal requirement.

On January 3, 1871, Brigham Young, president and trustee-in-trust7 of the Mormon church, sent a telegram to Daniel H. Wells,8 telling Wells that it would be "wisdom for the Latter Day Saints to omit paying tithing."9 That telegram must have come as a shock, reversing a three-decade-old practice that both provided a sizeable portion of the Church's revenue and represented an important religious obligation of church members.10 What would induce Young to take such a drastic step? According to Young, tithing was no longer sustainable because some federal officers wanted to "rob us of our hard earnings which are donated to sustain the poor and other charitable purposes."11

The robbery Young saw was not surreptitious. Rather, Young saw the government using the law itself to accomplish this robbery. Specifically, it planned on using the relatively young federal income tax. And the first salvo in this robbery was a letter-dated August 18, 1869-from John P. Taggart, Internal Revenue Assessor for the Territory of Utah, to Francis M. Lyman, an assistant assessor. In the letter, Taggart told Lyman to "make an annual return" of the profits, gains, and incomes that had accrued to the Mormon church in 1868 and 1869.12 That letter launched a battle between Taggart and Young that would encompass the next year and a half, as Taggart pursued Young for taxes on tithing members had paid to the church, while Young argued that tithing was not taxable income.

Neither the tax assessment nor Young's reaction to the assessment happened in a context-free vacuum. Young's suspicion of the government's motives was compounded by the general level of distrust between the Mormons in Utah and the federal government in the East. After winning the Civil War and ending slavery, the Republican Party turned its eye toward slavery's twin relic of barbarism: Mormon polygamy.13 Young believed that Taggart's attempt to tax Mormon tithing was part of the larger assault the federal government had been waging against the Mormon church. In January 1871, at the tail end of the dispute, Young wrote to Horace S. Eldredge, the president of the church's European Mission,14 and said:

Never were the emissaries of and agents of the Evil one more thoroughly awake and restlessly active than now. They can scarcely eat, sleep or do any thing except plan and plot for the overthrow of the kingdom of God . . . .

Amongst other despicable attempts to rob us of our means has been that made by Dr Taggart, Assessor of Internal Revenue, to compel the Church to pay an enormous tax on the tithing donated by the saints. …

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