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Subject: When is a church a church, and when is it a business rss

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Jon Badolato
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http://wuwm.com/post/can-television-network-be-church-irs-sa...

The above link is to the NPR article


Investigative Report Criticizes IRS Classifying Televangelists as Churches

NPR yesterday published a lengthy investigative report on the lack of financial transparency of television evangelists because the Internal Revenue Service is willing to categorize many of them as churches rather than non-profit religious organizations. Churches are not required to file Form 990 that provides annual disclosure of finances. The report focuses particularly on Daystar Television, one of the three largest religious television networks. Illustrating financial concerns that might be revealed if televangelists had to file Form 990, the report said in part:
Daystar's primary revenue comes from selling airtime to other religious programmers. Its secondary income is donations.... [B]etween 2005 and 2011, Daystar took in $208 million in tax-deductable contributions from viewers through on-air pitches. Daystar has built a public image as a generous giver to charitable causes. Indeed, the network has contributed millions of dollars to a trauma center and a home for Holocaust survivors in Israel, a hospital in Calcutta, and to ministries that support women in Moldova and children in Uganda....
NPR analyzed six years of Daystar balance sheets. They show the network gave away $9.7 million dollars in direct grants to outside recipients. Not $30 million [which its founder has claimed]. That works out to charitable giving of about 5 percent of donor revenue.
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Junior McSpiffy
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If churches are not required to disclose, how did they get hold of their balance sheets?
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Jon Badolato
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I respect the concept of a church being tax exempt in certain ways, but if you read the NPR article I linked, this just seems like a serious abuse of the concept.
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Damian
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GameCrossing wrote:
If churches are not required to disclose, how did they get hold of their balance sheets?

Public court records from the discovery phase of an old lawsuit.
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Jon Badolato
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GameCrossing wrote:
If churches are not required to disclose, how did they get hold of their balance sheets?


I believe it discusses that in the article. It's a long one but a good one.
 
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Dave G
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Interesting read. This does seem to be a pretty gross abuse of the tax status, but more tellingly an abuse of their donors. Taking money that's supposed to be for charity or missionary work and using it to make donations to your kid's high school or university is the kind of shit that would get you fired from most charities.
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Jon Badolato
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djgutierrez77 wrote:
Interesting read. This does seem to be a pretty gross abuse of the tax status, but more tellingly an abuse of their donors. Taking money that's supposed to be for charity or missionary work and using it to make donations to your kid's high school or university is the kind of shit that would get you fired from most charities.


Agreed. Caveat Emptor I suppose. What I'm more interested in however is the whole church-business overlap. This looks to me to primarily a television broadcasting business that has 237 million dollars of assets EXCEPT a physical location that one would think of as a church. Even former employees saw it more as a business than a church, and yet it is classified as a church and receives tax exemptions as a church.

If Google or some other big company decides to start displaying religious messages and evangelizing through their media, can they then declare themselves a church and receive exemptions ?
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Rich Shipley
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jonb wrote:
If Google or some other big company decides to start displaying religious messages and evangelizing through their media, can they then declare themselves a church and receive exemptions ?


Not in their current configuration as a for-profit corporation with shareholders.
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Jon Badolato
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rshipley wrote:
jonb wrote:
If Google or some other big company decides to start displaying religious messages and evangelizing through their media, can they then declare themselves a church and receive exemptions ?


Not in their current configuration as a for-profit corporation with shareholders.


Then they need to reconfigure ! whistle
 
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Kevin Salch
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Yes this is pretty outrageous and scary to boot.

Tis kind of shenanigans only make it harder on legitimate charitable organizations.

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Junior McSpiffy
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jonb wrote:
djgutierrez77 wrote:
Interesting read. This does seem to be a pretty gross abuse of the tax status, but more tellingly an abuse of their donors. Taking money that's supposed to be for charity or missionary work and using it to make donations to your kid's high school or university is the kind of shit that would get you fired from most charities.


Agreed. Caveat Emptor I suppose. What I'm more interested in however is the whole church-business overlap. This looks to me to primarily a television broadcasting business that has 237 million dollars of assets EXCEPT a physical location that one would think of as a church. Even former employees saw it more as a business than a church, and yet it is classified as a church and receives tax exemptions as a church.

If Google or some other big company decides to start displaying religious messages and evangelizing through their media, can they then declare themselves a church and receive exemptions ?


So, as always, I am gonna bring things back to the LDS church because... well... that's what I do.

This thing is global and for as small a membership it has, it's massive. It owns all sorts of properties and shares in business. It has a fairly impressive holdings portfolio from all accounts, though the entire scope of it doesn't have to be disclosed. That said, they also build a large number of religious structures (temples and churches), send out a massive missionary force, do an enormous amount of welfare work to provide for the needs of its members as well as others, humanitarian and disaster aid, and the list of churchy things they do goes on and on.

So where would you personally say they fall on this scale of church/business? And why?
 
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Jon Badolato
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GameCrossing wrote:
jonb wrote:
djgutierrez77 wrote:
Interesting read. This does seem to be a pretty gross abuse of the tax status, but more tellingly an abuse of their donors. Taking money that's supposed to be for charity or missionary work and using it to make donations to your kid's high school or university is the kind of shit that would get you fired from most charities.


Agreed. Caveat Emptor I suppose. What I'm more interested in however is the whole church-business overlap. This looks to me to primarily a television broadcasting business that has 237 million dollars of assets EXCEPT a physical location that one would think of as a church. Even former employees saw it more as a business than a church, and yet it is classified as a church and receives tax exemptions as a church.

If Google or some other big company decides to start displaying religious messages and evangelizing through their media, can they then declare themselves a church and receive exemptions ?


So, as always, I am gonna bring things back to the LDS church because... well... that's what I do.

This thing is global and for as small a membership it has, it's massive. It owns all sorts of properties and shares in business. It has a fairly impressive holdings portfolio from all accounts, though the entire scope of it doesn't have to be disclosed. That said, they also build a large number of religious structures (temples and churches), send out a massive missionary force, do an enormous amount of welfare work to provide for the needs of its members as well as others, humanitarian and disaster aid, and the list of churchy things they do goes on and on.

So where would you personally say they fall on this scale of church/business? And why?


Good questions. Compared to this organization shown, the Mormons at least have actual temples and churches where they gather for worship, and they have religious leaders presumably ordained by the church. This organization cited has neither.
Personally though, I am of the opinion that although churches are allowed tax exemptions, I believe their financial assets and records should be transparent to an entity like the IRS to determine where exactly they are exempt, and where not.
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Jon Badolato
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Interesting follow up read which seems to state that previous cases judged by the courts have held that "church" status is usually tied to a physical congregation, which the above organization cited does not seem to have.

http://www.irs.gov/pub/irs-tege/eotopica94.pdf
 
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Junior McSpiffy
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jonb wrote:
GameCrossing wrote:
jonb wrote:
djgutierrez77 wrote:
Interesting read. This does seem to be a pretty gross abuse of the tax status, but more tellingly an abuse of their donors. Taking money that's supposed to be for charity or missionary work and using it to make donations to your kid's high school or university is the kind of shit that would get you fired from most charities.


Agreed. Caveat Emptor I suppose. What I'm more interested in however is the whole church-business overlap. This looks to me to primarily a television broadcasting business that has 237 million dollars of assets EXCEPT a physical location that one would think of as a church. Even former employees saw it more as a business than a church, and yet it is classified as a church and receives tax exemptions as a church.

If Google or some other big company decides to start displaying religious messages and evangelizing through their media, can they then declare themselves a church and receive exemptions ?


So, as always, I am gonna bring things back to the LDS church because... well... that's what I do.

This thing is global and for as small a membership it has, it's massive. It owns all sorts of properties and shares in business. It has a fairly impressive holdings portfolio from all accounts, though the entire scope of it doesn't have to be disclosed. That said, they also build a large number of religious structures (temples and churches), send out a massive missionary force, do an enormous amount of welfare work to provide for the needs of its members as well as others, humanitarian and disaster aid, and the list of churchy things they do goes on and on.

So where would you personally say they fall on this scale of church/business? And why?


Good questions. Compared to this organization shown, the Mormons at least have actual temples and churches where they gather for worship, and they have religious leaders presumably ordained by the church. This organization cited has neither.
Personally though, I am of the opinion that although churches are allowed tax exemptions, I believe their financial assets and records should be transparent to an entity like the IRS to determine where exactly they are exempt, and where not.


Now, we get into church doctrine. The LDS church preaches self-reliance, emergency preparation, and investing in yourself. So let's say a massive global downturn strikes. What will the church do? Sell off assets. Those investments are their 72-hour preparedness kit, except on a mammoth scale. They could argue that they are simply doing for the church as a whole what they are preaching to their membership that they should do, long-term saving to prepare for economic hardships or disasters.
 
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While I'm sympathetic to the idea that this is abuse, I do wonder what objective test you would apply to any institution that would allow them to prove that they were a church.
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jonb wrote:
Interesting follow up read which seems to state that previous cases judged by the courts have held that "church" status is usually tied to a physical congregation, which the above organization cited does not seem to have.

http://www.irs.gov/pub/irs-tege/eotopica94.pdf


I'll bet that they have one of those somewhere. An "in studio audience" attending such services would probably qualify, wouldn't you say?
 
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Jon Badolato
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perfalbion wrote:
While I'm sympathetic to the idea that this is abuse, I do wonder what objective test you would apply to any institution that would allow them to prove that they were a church.


Agreed, which makes these types of cases difficult.
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Michael Tagge
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jonb wrote:
Personally though, I am of the opinion that although churches are allowed tax exemptions, I believe their financial assets and records should be transparent to an entity like the IRS to determine where exactly they are exempt, and where not.
I like it. What is wrong with this idea? I would even extend it to the membership. I am not aware of any reason why finances of religious institutions should be opaque. And who better to judge if donations are being used properly that those who donate.
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jonb wrote:
http://wuwm.com/post/can-television-network-be-church-irs-sa...

The above link is to the NPR article


Investigative Report Criticizes IRS Classifying Televangelists as Churches

NPR yesterday published a lengthy investigative report on the lack of financial transparency of television evangelists because the Internal Revenue Service is willing to categorize many of them as churches rather than non-profit religious organizations. Churches are not required to file Form 990 that provides annual disclosure of finances. The report focuses particularly on Daystar Television, one of the three largest religious television networks. Illustrating financial concerns that might be revealed if televangelists had to file Form 990, the report said in part:
Daystar's primary revenue comes from selling airtime to other religious programmers. Its secondary income is donations.... [B]etween 2005 and 2011, Daystar took in $208 million in tax-deductable contributions from viewers through on-air pitches. Daystar has built a public image as a generous giver to charitable causes. Indeed, the network has contributed millions of dollars to a trauma center and a home for Holocaust survivors in Israel, a hospital in Calcutta, and to ministries that support women in Moldova and children in Uganda....
NPR analyzed six years of Daystar balance sheets. They show the network gave away $9.7 million dollars in direct grants to outside recipients. Not $30 million [which its founder has claimed]. That works out to charitable giving of about 5 percent of donor revenue.


Is this a trick question?

 
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Junior McSpiffy
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mtagge wrote:
jonb wrote:
Personally though, I am of the opinion that although churches are allowed tax exemptions, I believe their financial assets and records should be transparent to an entity like the IRS to determine where exactly they are exempt, and where not.
I like it. What is wrong with this idea? I would even extend it to the membership. I am not aware of any reason why finances of religious institutions should be opaque. And who better to judge if donations are being used properly that those who donate.


There's primarily the issue of separation of church and state. Though I suppose if the state gets to decide who is or isn't a church, there isn't a problem at all, is there?
 
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Why would a church have a separate tax exempt status, rather then being classified as non-profit?
 
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It could be argued that churches are buisneses, just none profit ones. After all they charge for many services (and often a hefty charges at that), they have paid staff, they have portfolios. Nor is this new, in fact if anything the situation is not as bad, at least they no longer buy works of art.

Maybe it is time to have a far sticker definition of what is a church (I.E. a place of worship, and that alone), allow spending on that to be tax deductible (as would charitable operations), but actually tax they money they make.

To simplify it, remove tax free status but grant a wider range of tax deductible activity to them.
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slatersteven wrote:
It could be argued that churches are buisneses, just none profit ones. After all they charge for many services (and often a hefty charges at that), they have paid staff, they have portfolios. Nor is this new, in fact if anything the situation is not as bad, at least they no longer buy works of art.

Maybe it is time to have a far sticker definition of what is a church (I.E. a place of worship, and that alone), allow spending on that to be tax deductible (as would charitable operations), but actually tax they money they make.

To simplify it, remove tax free status but grant a wider range of tax deductible activity to them.
Even simpler: churches are charities. The end. What reason is there nowadays for a special status?
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Venga2 wrote:
slatersteven wrote:
It could be argued that churches are buisneses, just none profit ones. After all they charge for many services (and often a hefty charges at that), they have paid staff, they have portfolios. Nor is this new, in fact if anything the situation is not as bad, at least they no longer buy works of art.

Maybe it is time to have a far sticker definition of what is a church (I.E. a place of worship, and that alone), allow spending on that to be tax deductible (as would charitable operations), but actually tax they money they make.

To simplify it, remove tax free status but grant a wider range of tax deductible activity to them.
Even simpler: churches are charities. The end. What reason is there nowadays for a special status?
Fair point, but given the abuse of charitable status I am not sure that would make a lot of difference to abuses.

It may be time to make charitable spending deductible rather then earning tax free (and not just for churches).
 
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Koldfoot wrote:
Venga2 wrote:
slatersteven wrote:
It could be argued that churches are buisneses, just none profit ones. After all they charge for many services (and often a hefty charges at that), they have paid staff, they have portfolios. Nor is this new, in fact if anything the situation is not as bad, at least they no longer buy works of art.

Maybe it is time to have a far sticker definition of what is a church (I.E. a place of worship, and that alone), allow spending on that to be tax deductible (as would charitable operations), but actually tax they money they make.

To simplify it, remove tax free status but grant a wider range of tax deductible activity to them.
Even simpler: churches are charities. The end. What reason is there nowadays for a special status?


In the US churches are (theoretically) addressed in the Constitution, which (here) does make it a special status.
Ah, I see. Thanks for the info.
 
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