—Since the Church is preaching religious based morality to its members, it qualifies as a tax-exempt religious group. —
I don’t think WHAT the church preaches, or even that it preaches at all, is the point. The point is that the church, as a financial entity, is not set up to make a profit for its owners/shareholders. Like all non-profits, it is set up to serve a mission, and all funds go right back into supporting that mission, not enriching whomever is in control.
—I could see an argument being constructed that taxing churches for their religious activities may be an unconstitutional interference with religion.—
I agree that this is the valid legal rationale (though some founders didn’t think it should go as far as it has), because religion has a special protection.
However, I do think that it is unfair: it privaleges “religious” activities with a protection not granted to other activities that may be just as important to those that are a part of them.