The frontal assault on the freedom of religion that the new mandatory health insurance coverage rules from HHS represent is serious enough, but religious institutions find themselves in danger of a potential flanking attack as well. Churches and their subsidiary institutions are right and justified in their opposition to the new rules which require violation of deeply held convictions regarding abortion and birth control. Ironically, publicly expressing that opposition, normally considered a first amendment right to free speech, could place these institutions in further jeopardy from the government.
Most religious institutions are by nature non-profit and thereby tax exempt under Section 501(c)(3) of the IRS code. One of the requirements to maintain this tax exempt status is to refrain from engaging in substantial political activity and attempting to influence legislation. Churches and religious leaders must at least consider the effects of their words and actions in the political arena. Sometimes the line is blurry and a decision must be made about whether the religious and moral principles involved justify the risks associated with public statements on legislation or the actions of politicians.
What is unique in the current imbroglio is that the policy in question is not a broad cultural issue, but rather is aimed directly at the religious institutions themselves. In order to fight back, these institutions will have to devote more time, energy and resources to be effective. This will inevitably invite more attention from the IRS, especially since the "substantial" standard is undefined even by the courts. The more vocal and persistent an organization is in opposition to the new HHS rules, the more it jeopardizing its tax exempt status, or at the very least is inviting increased scrutiny.
In a perverse way, the Obama administration has every incentive to prolong the controversy, as the "accommodation" being announced today seems destined to do, because opposition groups will be in effect handing the IRS the rope on which to hang them by continuing their efforts to "influence legislation." Religious institutions are finding themselves increasingly faced with a dilemma: acquiesce to the administration or endanger their tax exempt status. This is an affront to the "free exercise" promised by the First Amendment, and should be an embarrassment to the President who swore to uphold and defend the Constitution.