Never before -- not in this state or any other -- has a government agency denied Unitarians tax-exempt status because of the group's religious philosophy, church officials say. Strayhorn's ruling clearly infringes upon religious liberties, said Dan Althoff, board president for the Denison congregation that was rejected for tax exemption by the comptroller's office.

\"I was surprised -- surprised and shocked -- because the Unitarian church in the United States has a very long history,\" said Althoff, who notes that father-and-son presidents John Adams and John Quincy Adams were both Unitarians.

But the denials of the Red River Unitarian Universalist Church in Denison and the North Texas Church of Freethought in Carrollton, as well as an earlier denial by [former Comptroller] Sharp for the Ethical Culture Fellowship of Austin, were ordered because the organizations did not mandate belief in a supreme being.

The disputed tax dollars don't amount to much, but the comptroller has taken a stand on principle, Ancira said.

\"The issue as a whole is, do you want to open up a system where there can be abuse or fraud, or where any group can proclaim itself to be a religious organization and take advantage of the exception?\" he said.

Those who oppose the comptroller's \"God, gods or supreme being\" test say that it can discriminate against legitimate faiths. For example, applying that standard could disqualify Buddhism because it does not mandate belief in a supreme being, critics say.

Opponents note that the federal government applies less stringent rules for federal tax exemptions, yet manages to discourage fraud and abuse. They also question whether the comptroller's office has formulated excuses to discriminate against nontraditional groups, such as those that include witches and pagans.

That standard first came up in 1997, when then-Comptroller Sharp ruled against the Ethical Culture Fellowship of Austin. In making that decision, Sharp overturned the recommendation of his staff.

The Ethical Culture Fellowship sued, claiming that Sharp overstepped his authority. Allied with the group in the ongoing lawsuit are pastors from a broad range of faiths, including Baptists, Lutherans and Mennonites.

Both the lower court and the Texas Supreme Court have ruled against the state's decision. In one opinion, an appeals court said the comptroller's test \"fails to include the whole range of belief systems that may, in our diverse and pluralistic society, merit the First Amendment protection.\"

Strayhorn vows to continue the legal fight to the U.S. Supreme Court, if necessary. \"Otherwise, any wannabe cult who dresses up and parades down Sixth Street on Halloween will be applying for an exemption,\" she said in a April 23 news release.

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\"The issue as a whole is, do you want to open up a system where there can be abuse or fraud, or where any group can proclaim itself to be a religious organization and take advantage of the exception?\" he said.