Psychedelic Sacrament Bars Church Tax Exemption, D.C. Cir. Rules

The IRS properly denied tax exempt status to an Iowa church whose members used a hallucinogenic drug in their religious practice because the church failed to show that it had an exemption to use the substance, the D.C. Circuit affirmed Friday.

The nonprofit Iowaska Church of Healing sued the government in 2021 for denying it tax-exempt status on the grounds that ICH’s Sacrament of Ayahuasca—a tea containing the Schedule I psychedelic dimethyltryptamine—violated the 1970 Controlled Substances Act. ICH appealed after the federal court agreed with the government’s position that the IRS had no authority to grant the church its tax …