Congress shall make no law respecting an establishment of religion, or (...blah blah blah...)
--Amendment I, The Constitution of the United States of America

(d) Religious and apostolic organizations -
The following organizations are referred to in subsection (a): Religious or apostolic associations or corporations, if such associations or corporations have a common treasury or community treasury, even if such associations or corporations engage in business (...blah blah blah...)

--United States Internal Revenue Code - 26 USC Sec. 501(c)(3)

I am not a Supreme Court justice, but it seems obvious on the face of it that the Internal Revenue exemption for religious organizations is unconstitutional.

Even if one adopts a somewhat tortured interpretation of "an establishment of religion" to mean "a State-sponsored Religion", Section 501(c)(3) fails the test. Congress has vested the power to decide what is, and is not a "religion", in an agency of the Federal Government - the IRS. Federally recognized religions are not only made "official" by this act, they are subsidized, in the form of a tax exemption.

The aim of the tax code, which is to encourage charitable activities, may be worthy, but the methodology is flawed. It provides a shelter for organizations whose goals are remote from philanthropy (or, for that matter, salvation), and forces religions to justify their activities to the state in a way that other businesses do not.

Churches share their "charitable" tax-exempt status with non-religious entities, so there is nothing sacred about Church Charity, as distinct from any other kind. The Religious Exemption is a gratuitous flaunting of the Bill of Rights.

This is Number 1 in a proposed series of nodes about Glaring Inconsistencies in US Civil Culture and Law.
-- PROPOSAL REJECTED June 8, 2001 --