ULC Court Cases: Universal Life Church v. USA (1974)

Please note: this court case pertains to the ULC of Modesto, CA and not the Universal Life Church Monastery of Seattle, WA. The latter’s has never had issues with the IRS or any government agency over taxes.

Case Background

In the case of the Universal Life Church v. The United States of America, the Universal Life Church legal team sought a refund of $10,377.20 for the income taxes appropriated by the IRS for the fiscal year ending on April 30, 1969 in a US District Court. This was the first but not the only time the IRS and the ULC have clashed in court cases over the years regarding the latter’s tax-exempt status.

Case Proceedings

In this court case, the Universal Life Church of Modesto, CA had its tax exempt status upheld, overruling a decision made by the IRS.

According to Harold S. Larsen, who appeared for the IRS (the defendant), the IRS recognized the ULC as an organized and incorporated non-profit institution according to California law. They also recognized that the Church’s activities may be religious in nature. However, they believed that their activities were not all religious activities, meaning that they did not fall under the tax-exempt status as defined by the IRS. The Universal Life Church legal team presented their Articles of Incorporation, which stated that the organization operated solely for non-profit reasons, and whatever money was made was used to pay off church debts. Leftover profits were donated to non-profit funds or charities.

The defense argued that the IRS had two main issues with the ULC, which resulted in the denial of tax-exempt status. The first issue was that the ordination of anyone who wished to be a minister, the issuing of the title of Honorary Doctor of Divinity and the granting of church charters were all activities that did not have a religious purpose. The second issue the IRS had was that the issuance of the titles of Honorary Doctor of Divinity were either illegal or in violation of the California Education Code.

The Universal Life Church legal representatives called Reverend Theodore Mackin for expert testimony. He was an associate professor of religious studies as well as a chairman of the department of religious study at Santa Clara University. According to his testimony, the Honorary Doctor of Divinity title is an honorary religious title that has no academic standing and that the title has nothing to do with completing a field of study at a university. Mackin’s testimony was corroborated by Reverend Lester Kinsolving, who was an ordained minister for the Episcopal church and who wrote on religious subject matters for several newspapers.

The founder of the ULC, reverend Kirby J. Hensley, testified that anyone who wished to be an ordained minister could receive ordination for free and without question through it. On request, the Church would send out lesson plans on how to conduct religious ceremonies along with the Honorary Doctor of Divinity. He also testified on behalf of the church’s non-profit and charitable activities.

Rulings And Outcomes

The court ruled in favor of the Universal Life Church. They stated that the California Education Code only deals with the issuing of academic or honorary degrees and titles that are given after the completion of academic, educational or professional requirements. The California Education Code says nothing about honorary titles given for meritable reasons. The expert testimonies were also enough to convince the court that the Honorary Doctor of Divinity was strictly a religious title and had nothing to do with academic standing.

As for the charge that the ULC did not further religious purposes by activities such as granting church charters, ordaining ministers and issuing the certificates of Honorary Doctor of Divinity titles, the court found that these were all acceptable religious activities.

The court decided on February 27, 1974 that the ULC was entitled to Federal Tax exemption and that they were entitled to a refund for taxes and interest paid to the IRS. There would be many more court cases regarding the legitimacy of the Universal Life Church in the years ahead.

Outcome: the tax-exempt status of the original Universal Life Church of Modesto, CA was upheld