russ_watters said:And I see nothing in that wiki link to support the idea that the pastor profits from the church beyond his income. Are you saying he owns it? Can you prove it?
Grammatically, the second sentence is a claim that churches do have owners beyond the members. Are you saying that you didn't intend that there are additional owners, just additional people who could take a profit? That's not what ownership is or what profit is.Jack said:You said that your homeowner's association has no owners that could take a profit if such profits existed. Churches do.
Please provide a quote, because I'm not seeing it.DavidSnider said:That's exactly what MY link showed.
In 2003, Popoff's ministry received over $9.6 million and by 2005 the amount had risen to over $23 million. In that year he and his wife were paid a combined total of nearly $1 million, while two of his children were receiving over $180,000 each.[37] Financial data is not available for Popoff's ministry following 2005 because Peter Popoff Ministries changed from a for-profit business to a religious organization in 2006, making it tax-exempt.[38] Popoff purchased a home in Bradbury, California for $4.5 million in 2007.[39][40] He reportedly drives a Porsche and a Mercedes-Benz.[41] Some reporters are urging those who have donated money to Popoff in hopes of receiving "miracles" to report to the Attorney General in their state.[8]
Clear cut about what? What is your claim, David?DavidSnider said:My example was too sketchy as they closed the inquiry prematurely. Let's go to a more clear cut example.
http://en.wikipedia.org/wiki/Peter_Popoff#Financial_details
russ_watters said:You said: Grammatically, the second sentence is a claim that churches do have owners beyond the members. Are you saying that you didn't intend that there are additional owners, just additional people who could take a profit? That's not what profit is.
Saying that "he's basically in control of it" and could therefor steal money from the church is not a fundamental difference between him and my homeowner's association: My homeowner's association has a President who has a check book and who could write himself checks.
But none of that has anything at all to do with whether churches (mega or otherwise) should pay taxes. Moreover/as such, this has nothing to do with the IRS -- it isn't the IRS's job to look for civil fraud (the pastor in this hypothetical would be stealing from the members, not the IRS). The IRS is not some private accounting firm that audit's peoples' books to look for fraud or skimming. What you are suggesting would make the IRS a government sponsored accounting firm that would -- free of charge, I assume? -- provide financial audits to companies to help them ensure their staff isn't stealing from them. Wow, would companies ever love that! Except for the private accounting firms who currently provide that service, of course! And taxpayers who would have to fund it.
I think, also, you are under the false impression that non-profits file full-fledged tax returns that would provide the sort of information required do do such an audit. I'm pretty sure they don't -- I looked that up and IIRC, non-profits file a little form that states that they are non-profit and that's it. Filing that form to register as a non-profit is what churches are exempt from. I'll have to double-check that/get the link when I get home later, though.
Generally, tax-exempt organizations must file an annual information return ( Form 990 or Form 990-EZ). Tax-exempt organizations that have annual gross receipts not normally in excess of $25,000 ($50,000 for tax years ending on or after December 31, 2010) are not required to file the annual information return; they may be required to file an annual electronic notice, however. In addition, churches and certain church-affiliated organizations are excepted from filing.
DavidSnider said:As others have said the issue isn't merely whether they should pay taxes, but whether it's prudent for them to file. I don't see any reason for legitimate churches to pay taxes.
Churches and religious organizations may
be legally organized in a variety of ways
under state law, such as unincorporated
associations, nonprofit corporations,
corporations sole, and charitable trusts
To qualify for tax-exempt status, such an
organization must meet the following requirements
(covered in greater detail throughout this publication):
■ the organization must be organized and operated
exclusively for religious, educational, scientific, or other
charitable purposes,
■ net earnings may not inure to the benefit of any
private individual or shareholder,
■ no substantial part of its activity may be attempting
to influence legislation,
■ the organization may not intervene in political
campaigns, and
■ the organization’s purposes and activities may not
be illegal or violate fundamental public policy
In general, rents from real property, royalties, capital
gains, and interest and dividends are not subject to the
unrelated business income tax unless financed with
borrowed money.
Does the church own the house or did they buy it it and deed it to the man? That would be a violation and fraud charges could be filed against the church and the man.In 2003, Popoff's ministry received over $9.6 million and by 2005 the amount had risen to over $23 million. In that year he and his wife were paid a combined total of nearly $1 million, while two of his children were receiving over $180,000 each.[37] Financial data is not available for Popoff's ministry following 2005 because Peter Popoff Ministries changed from a for-profit business to a religious organization in 2006, making it tax-exempt.[38] Popoff purchased a home in Bradbury, California for $4.5 million in 2007.[39][40] He reportedly drives a Porsche and a Mercedes-Benz.[41] Some reporters are urging those who have donated money to Popoff in hopes of receiving "miracles" to report to the Attorney General in their state.
Oltz said:Does the Church own the property and allows him to use it as part of his station? That would be allowed as long as it was actually approved by the church.
He has full control over it.the Committee reports that the bylaws of Copeland's church state: "Kenneth Copeland, as Co-founder and ex officio member of the Board of Directors, shall in his sole discretion be empowered to veto any resolution of the Board which he the President shall determine is not in the best financial or operational interests of the Church."
So here, the "church" is just a rubber stamp for the founder to approve whatever he wants for himself.A former staff member of Whites' church told the Committee that the church did conduct regular board meetings; however, all decisions concerning the church were made by the Whites and their CFO. The board members typically found out "after the fact."
Oltz said:If his followers do not complain there is no legal wrongdoing
I stand corrected -- I remembered my research.Jack21222 said:Non-profits DO file full-fledged tax returns. Here's the 990-ez form, which small non-profits have to file: http://www.irs.gov/pub/irs-pdf/f990ez.pdf
So they have power because of their unofficial stature that puts them in a position to be able to steal from the church? Official or unofficial, such people exist in most organizations. They are not unique to churches.You're nitpicking. I am saying that churches have founders and presidents who are de facto owners. They have boards which do whatever the president tells them to do, and the president often has "emergency powers" to overrule the board.
Both parts of that are ridiculous. If someone is stealing from a non-profit, it has nothing whatsoever to do with the non-profit's tax exempt status.All of this is incorrect. It absolutely IS the IRS's job to look for abuses of non-profit status. If the president of a non-profit is having his non-profit organization buy him million dollar vacation homes and a private jet for personal use, that would jeopardize the non-profit status of the church, AND THEN THE NON-PROFIT WOULD HAVE TO BE TAXED.
I'd quibble with it being an establishment clause issue, but otherwise have no objection to the reporting as an issue of fairness.I'll state it once again: I believe such exemptions for religious 501c3 organizations is a violation of the establishment clause.
According to your link, Popoff had a for-profit business and filed taxes, but still committed fraud. He's now converted that business to a church and your assumption appears to be that he's probably still committing fraud. I think that's a reasonable assumption. But we're getting further and further away from the subject of the thread. Popoff is not a typical church. If the law is so loose that it enables a fraudster like him to easily conceal fraud and evade taxes, fine -- I give. Make churches file that form.DavidSnider said:But do you think that guys like Popoff shouldn't have to file simply because they call themselves a church?
For clarity, here are the top 25 paid CEOs of non-profits:russ_watters said:*Where I think you are going with this is that it sounds like you and David don't think it should be possible to get rich legally by being a pastor. Is that what this is about?
russ_watters said:I stand corrected -- I remembered my research.
And if all you care about is equality in reporting that's fine, but what you are saying is still suggesting more: So they have power because of their unofficial stature that puts them in a position to be able to steal from the church? Official or unofficial, such people exist in most organizations. They are not unique to churches.
If all you intended from your first post this morning is that there are some people in churches who are in a position to steal from those churches, then we have no disagreement and you misread the post you were responding to if you thought we did. Both parts of that are ridiculous. If someone is stealing from a non-profit, it has nothing whatsoever to do with the non-profit's tax exempt status.
With a quick google, you can find thousands of examples of people stealing from non-profits. Here's two:
http://www.wsbtv.com/news/news/local/woman-steals-thousands-dollars-autism-nonprofit/nHXGz/
http://smallbusinessbandits.com/archives/389
In the first case, the theft was found by the home office of the national non-profit. In the second, the theft was found by the IRS looking into the thief's personal tax return. In neither case did the IRS find the fraud by looking into the non-profit's finances nor does either article suggest that the non-profit's tax exempt status would be in jeopardy as a result. The idea that it would be just does not follow logically. But hey -- it's your claim and since there are thousands of examples of people stealing from non-profits, you should be able to substantiate it if it is true.
I think I know where you're going with that (more later*) and it is wrong-headed thinking.
The second link, by the way is an organization that tracks such stories and they have hundreds, so if such examples exist, I would think you will find them there.
I'd quibble with it being an establishment clause issue, but otherwise have no objection to the reporting as an issue of fairness.
*Where I think you are going with this is that it sounds like you and David don't think it should be possible to get rich legally by being a pastor. Is that what this is about?
Private inurement is prohibited in all nonprofits. It happens when an insider — an individual who has significant influence over the organization — enters into an arrangement with the nonprofit and receives benefits greater than she or he provides in return.
The most common example is excessive compensation, which the IRS condemns through intermediate sanctions (significant excise taxes). Insiders — referred to in IRS parlance as "disqualified persons" — can be high-level managers, board members, founders, major donors, highest paid employees, family members of any of the above, and a business where the listed persons own more than 35 percent of an interest.
Also:It also pays to be the friend or family member of a televangelist. For example, during the Committee investigation, Randy and Paula White divorced. An insider told the Committee that Randy placed his new girlfriend and her parents on payroll and gave them retroactive back pay. According to the Committee, Paula's son, and Randy's son, daughter, and father are also on the payroll. The four of them were paid a total of $420,000, $560,000, $700,000 and $1,075,000 in 2004, 2005, 2006, and 2007, respectively.
The Committee reported that some churches allegedly ordain friends, family members, and employees solely for the purpose of getting them the income tax exclusion.
russ_watters said:For clarity, here are the top 25 paid CEOs of non-profits:
http://www.charitywatch.org/hottopics/Top25.html
So it is possible to become rich legally by running a non-profit.
A third-party informant provided the Committee with financials from Bishop Eddie Long Ministries, a nonprofit related to Long's church, from the years 1997-2000. They show for those years, 62% to 89% of the nonprofit's total expenses were spent on items the Committee deemed "questionable," such as clothing, housing, cars, and even compensation payments for a person who did not work any hours at the organization.
The CEOs on your list don't get this tax-freeAn insider told the Committee that Randy and Paula White enjoy a $3.5 million condo in Trump Tower in New York City, in addition to their $2.6 million home in Tampa, Florida. Their church allegedly pays a "housing allowance" for both residences.
Bolding mine.The number and types of entities, including private airports and aircraft leasing companies, raises concerns about the use of the church‘s tax-exempt status to avoid taxation. However, given the four churches‘ refusal to provide tax information, we are unable to determine whether and the extent to which they are reporting and paying taxes on income earned in those entities.
Oltz said:The point is Jack that if a group of people decided to worship me as a God and establish a religion whose main tenant was attempting to make me the richest man in the world who owns 50 of everything I could ever want. That would and could be a valid religion that the government could make no effort to suppress the free exercise thereof.
The Constitution does not require the government to exempt churches from federal income taxation or from filing tax and information returns.
We are of the opinion that there is not a constitutional prohibition on requiring churches to file Form 990 information returns. For instance, currently religious organizations that are not churches are required to file Form 990, and churches, as well as other religious organizations are subject to detailed examinations of their books and records. We believe that both of these current law requirements are constitutional and, with respect to examinations of books and records, can be considered more intrusive than the filing of Form 990.
Oltz said:Jack,
For clarity do you want religion taxed on profits or do you just want informative paper work filed?
Do you want all "non-profits" taxed or just the churches (they all make profit as we have gone over before)?
I think trying to revoke tax exemption from churches would prove unconstitutional unless it was a flat and low percent ~10% or less and you would need to apply it to all non profit organizations. Any ability to change the rate could easily become discriminatory which is why its safest to simply not have one.
Meanwhile, you have provided nothing to support your claims.I would also like to point out that your document is a memo and although some sections are well supported with court precedent it still contains a lot of opinion and conjecture none of which can be considered official.
If you read the report, you'd see that many religious schools and "other entities" (including airports and plane leasing companies) are being considered "church affiliated" and are therefore not filing 990s.Your document makes it clear that informative paperwork is already required of religious schools and other entities other then the church itself.
In addition churches are already subject to detailed reviews of financials. If all you want is a 990 I am fine with that... on page 20 it states
Audits are IRS‘s primary method for enforcement of the tax laws. In determining which organizations to examine (and in determining whether the organizations selected for examination are complying with the tax laws), the IRS relies heavily on the information supplied in the Form 990. But because the Code exempts churches both from applying to the IRS for recognition of exemption and from filing annual returns, it is difficult for the IRS to discover and investigate abuses of section 501(c)(3) status by churches that do not choose to seek recognition of tax-exempt status or to file annual returns.
Right, and I'm saying that churches that do not meet the qualifications to be a non-profit should be taxed. This is clearly about taxing churches. There are some churches that need to be taxed as for-profit, but without a requirement to file 990s, the IRS has no leads to go on to determine which ones.but the thread is about taxing churches.
russ_watters said:Business income doesn't get taxed: only profit.
Cinitiator said:What's your point? This is a false equivalence fallacy.
To qualify for tax-exempt status, such an
organization must meet the following requirements
(covered in greater detail throughout this publication):
■ the organization must be organized and operated
exclusively for religious, educational, scientific, or other
charitable purposes,
■ net earnings may not inure to the benefit of any
private individual or shareholder,
■ no substantial part of its activity may be attempting
to influence legislation,
■ the organization may not intervene in political
campaigns, and
■ the organization’s purposes and activities may not
be illegal or violate fundamental public policy
Oltz said:As long as the assets are not transferred to an individual other then salary its not a violation.
You do not get to decide what is appropriate for a religion to spend its money on or how much they are allowed to play the clergy or elders or whatever.
This is exactly correct.So you want the IRS/Police to be more proactive in investigating fraud and revoking Tax exempt status and you want organizations to provide more information to make the abuses easier to spot.
Jack21222 said:This is exactly correct.
I don't know what the girl scouts are, but scout groups are given charity status automatically. http://scouts.org.uk/supportresources/1578/registering-as-a-charity?cat=262&moduleID=10russ_watters said:There is a good reason why you would treat a church differently from, say, the Girl Scouts: Churches are mostly self funded while the Girl Scouts operates much more like a business, drawing substantial income from selling products.
Charities that are members of particular national organisations or movements (such as Scouts, Guides and some Christian denominations) are 'excepted' from registration
I agree that church income and property should be taxed. I think that all so called nonprofit organizations' incomes and real estate holdings should be taxed. The ideal of equality requires it.Cinitiator said:In my opinion, the church shouldn't be subject to any tax exemptions at all. It should be taxed, and the taxes should be reinvested on noble causes, such as health care, education, scientific and technological development, resource and environmental protection, housing security and food security, etc.
Several problems, most of which have already been pointed out as others have made similar mistakes:nanosiborg said:I agree that church income and property should be taxed. I think that all so called nonprofit organizations' incomes and real estate holdings should be taxed. The ideal of equality requires it.
By not taxing them in these ways we are giving them a preference which is at odds with our avowed egalitarian ideals and the doctrine of separation of church and state.
Religious organizations simply cannot be given any special consideration or respect in a society that, supposedly, values freedom of thought, expression, and action.