## Facts

- A Minnesota nonprofit, Church of the Chosen People (also called Demigod Socko Pantheon (DSP)), filed corporate income tax returns for 1976–1978 and paid small amounts of federal income tax.
- DSP later filed refund claims, asserting it was exempt from taxation under I.R.C. § 501(c)(3) as a religious or charitable organization.
- After the IRS did not formally disallow the claims within six months, DSP sued the United States for a refund under 28 U.S.C. § 1346(a)(1).
- DSP’s leaders (“Archons”) were Richard John Baker and J. Michael McConnell; Baker testified that DSP’s primary purpose was preaching a doctrine called “The Gay Imperative.”
- DSP had no published religious texts or established oral tradition, kept no membership records (despite claiming about 10 members), and held only one formal service during the relevant years.
- DSP’s asserted religious practice largely consisted of adherents achieving a personal “state of consciousness” in daily life rather than participating in organized worship, congregational services, or structured church activities.
- The court found DSP’s limited activities were largely indistinguishable from the private lives and advocacy of its two leaders.

## Issues

1. Whether DSP was “organized and operated exclusively for religious purposes” (or other exempt purposes) under I.R.C. § 501(c)(3).
2. Whether DSP functioned as a bona fide church or religious organization, as shown by objective institutional characteristics and actual operations.
3. Whether DSP’s operations impermissibly served private interests inconsistent with § 501(c)(3).

## Decision

- The court entered judgment for the United States and denied DSP’s requested refunds for 1976–1978.
- DSP failed to prove entitlement to exemption under § 501(c)(3).
- The court did not assess the truth or reasonableness of DSP’s doctrine; it relied on neutral criteria concerning organization and operations.

## Legal Principles

- In tax-exemption cases, courts do not adjudicate the truth, validity, or reasonableness of religious beliefs; they apply objective, generally applicable criteria to determine qualification under § 501(c)(3).
- Section 501(c)(3) requires satisfaction of both the organizational test (governing documents limit purposes to exempt ends) and the operational test (the entity is primarily engaged in furthering exempt purposes).
- Whether an entity is a “church” may be evaluated through objective indicia commonly associated with churches (e.g., recognized creed and form of worship, ecclesiastical governance, regular services, established place of worship, definite congregation and membership, clergy, and religious history or tradition).
- An organization does not qualify under § 501(c)(3) if it is operated for private interests or if its operations are principally intertwined with the personal affairs of its founders rather than serving an independent exempt mission.

## Conclusion

The court denied tax-exempt status and refunds because DSP’s minimal, unstructured activities lacked objective manifestations of a church and did not satisfy § 501(c)(3)’s operational requirements, independent of any judgment about the sincerity or content of its beliefs.


Church of the Chosen People v. United States, 548 F. Supp. 1247 (D. Minn. 1982)