60 Minutes, David Nielson, and Ensign Peak Advisors

May 17, 2023 by 48 Comments

Sunday night, 60 Minutes aired a 13-minute segment on Ensign Peak Advisors. And honestly, if you’ve been following the story closely (I have!), there’s not a lot of new information here.

But not a lot isn’t no new information. And, in any event, the piece featured David Nielson, the whistleblower from 2019, speaking publicly for the first time, as well as Bishop Waddell, First Counselor in the Presiding Bishopric representing the church’s point of view. (It also featured an interview with Phil Hackney, a law professor at Pitt and, full disclosure, a friend, colleague, and coauthor of mine.)

I’m not going to give a full rundown of the piece. I’ve written about the tax and securities issues previously. And anyway, at 13 minutes (half that if you watch it at 2x speed!), watching it isn’t a heavy lift. Instead, I’m going to highlight a couple things that I found interesting and important.

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Filed Under: Current Events, Economics, Mormon, Society & Culture Tagged With: , , , , , , , , , , , ,

The Significant Moral Consequences of Trump

May 12, 2023 by 41 Comments

Next year will mark the 70th anniversary of the so-called Johnson Amendment, the provision in section 501(c)(3) that prohibits tax-exempt organizations from endorsing or opposing candidates for office. We really don’t know much about the purpose or motivation of the provision: it was introduced by the-Senator Johnson and approved, without debate, by voice vote, so there’s no legislative history explaining its purpose.

The substance of the prohibition is pretty clear, though: to qualify for tax exemption, an organization must do a handful of things and refrain from doing a handful of others. Under the Johnson Amendment, a tax-exempt organization cannot “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”

And that’s it: a blanket prohibition on endorsing or opposing candidates. And what are the consequences for an organization that violates the prohibition?

[Read more…]
Filed Under: Current Events, Politics, Society & Culture Tagged With: , , , , , , ,

Church Tax Exemption: An Explainer

March 3, 2023 by

It seems like every time there’s a church scandal—and especially one that concerns money—people start arguing that the scandal-ridden church (or even churches in general) should lose their tax exemptions. (If you want to see an example, search “mormon tax exemption” on Twitter.)

So how does tax exemption relate to churches, and especially churches that make a lot of money? I thought it might be worth a quick Explainer.

Why Are Churches Exempt, Anyway?

Fair questions. One reason is history—religious exemptions from taxation go back at least to the Bible. When Joseph imposed a 20% tax on Egyptian land, he exempted the priests from the tax.

Jump forward to the United States: while it hasn’t been a straight line, the exemption of at least some religious property from the property tax goes all the way back to Colonial days. And churches have been exempt from income taxation since the introduction of the modern federal income tax.

[Read more…]
Filed Under: Current Events, Society & Culture Tagged With: , , ,

Church Finances in Canada and Australia

November 4, 2022 by

Over the last week or so, a number of people have pointed me to investigative journalism regarding the church’s finances in Canada and Australia and asked my opinion on them. Which is flattering but, unfortunately, right now I don’t have a ton of spare time. So rather than go through in detail, I’m going to try to contextualize a little bit of what I think is going on.

And what I think is going on is two things. First, the church thinks of itself and, to the extent it legally can, operates as a single economic entity. Over the last several decades or so, it has consolidated its finances in Salt Lake (which significantly diverges from most religious organizations I’m familiar with, including other hierarchical religions like the Catholic church).

Second, the church is obsessed with being financially opaque. It values its financial privacy to a degree that it can be harmful to the public’s perception. (I’m sure I’ve blogged about this, but I’ve also written about the history of the church’s varying levels of financial transparency/opacity for Dialogue.)

And these two things, I believe, underlie the stories coming out of Canada and Australia. And frankly, my quick blog post (written between getting kids up for school, getting them breakfast, and getting ready for work) may or may not be satisfying. It’s not meant to convict or exonerate the church. And pretty much everything I know about this comes from two articles. And I believe that the church should be more financially transparent, and that such transparency would be good for it in both the short and the long run.

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Filed Under: Current Events, Economics, Modern Era, Society & Culture Tagged With: , , , , , , ,

A Quick Note re: the Church and Gun Safety Legislation

June 4, 2022 by

I was reading the WBEZ website yesterday, and came across a story about Cardinal Cupich, the Archbishop of the Archdiocese of Chicago. Cardinal Cupich called on legislators to pass legislation to curb gun violence.

“The Second Amendment, unlike the second commandment, did not come down from Sinai,” Cupich told NPR. “There is an understanding that we all have in our hearts, engraved in our hearts, a natural law about the value of human life. And there is no amendment that can trump that.”

So can he do that? Can he speak out about political issues? Is he, the leader of the 3rd largest archdiocese in the United States, with more than 2 million Catholics, risking the Catholic Church’s tax exemption?

[Read more…]
Filed Under: Current Events, Politics, Society & Culture Tagged With: , , , ,

It’s Not Taxes

April 2, 2022 by

A popular legal Twitter personality has an evergreen tweet: “It’s not RICO.” See, RICO (the Racketeer Influenced and Corrupt Organizations Act) has become a super-popular rhetorical crime. Trump violated RICO; antifa violated RICO; I’m probably violating RICO just by posting this!

The thing is, RICO is a very narrowly-tailored law. There are specific criteria a crime has to meet to violate RICO and basically, if you hear someone say that somebody else violated RICO, you can be about 99% sure not only that they’re wrong, but that they have absolutely no idea what they’re talking about.

I thought about that the other day when a friend pointed me to a clip from a popular Mormon-themed podcast.[fn1] In the clip, the podcaster makes a blockbuster announcement: the podcaster has just discovered why the church builds so many temples. Specifically, the podcaster was told by an “inside source”:

It turns out that for the church to maintain its tax-exempt status, for the Mormon church to maintain its tax-exempt status as a charity or as a church, it has to do something with its money. And so building temples is one of the major ways the church can spend a boatload of money with all this cash that it keeps collecting and stay in business and be perceived as a charitable institution.

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Filed Under: Current Events, Internet & Social Media, Modern Era, Mormon, Rants, Society & Culture Tagged With: , , , , , , , ,

The Salt Lake Tribune is Officially a Public Charity!

November 4, 2019 by

Photo by Cool Hand Luke [CC BY-SA 3.0], via Wikimedia Commons

This morning, the Salt Lake Tribune announced that the IRS had granted it tax-exempt status as a 501(c)(3) public charity.[fn1] And, while it’s not the first tax-exempt news organization, it says that it’s the first legacy newsroom that’s transformed from for-profit to nonprofit.[fn2]

This doesn’t come entirely as a surprise: six months ago, it announced its intention to become a nonprofit/tax-exempt organization, and I wrote an Explainer about it. So now that it’s real, what does that mean for the Tribune?

I don’t think we know yet. The paper hasn’t announced what changes it plans to make, if any. I stand by everything I wrote last time I wrote about this, but I’ll add a couple things now that it’s real. [Read more…]

Filed Under: Current Events, Society & Culture Tagged With: , , , , , , , , , , , , , ,

The Tax Roots of OD2(?)

July 15, 2019 by

It’s become an article of faith in some circles that the end of the racial temple and priesthood ban was motivated, at least in part, by the specter of the church losing its tax-exempt status. And that’s not just the bloggernacle, and it’s not just ex-Mormon reddit (though you can certainly find the assertion—repeatedly—on various internet fora). The same claim is made in academically rigorous places.

For example, in The Mormon Church and Blacks: A Documentary History, Harris and Bringhurst write,

Specifically, the Mormon hierarchy became concerned about potential lawsuits over their tax exemption status, particularly in light of the student protests against BYU in the late 1960s and early 1970s. They had watched very closely the Bob Jones University case, in which the IRS revoked its tax exemption status in an important 1975 ruling.

(p. 106) [Read more…]

Filed Under: Mormon, Post-Manifesto Era, Society & Culture Tagged With: , , , , , , , , ,

Civic Process Specialists: Some Thoughts

May 29, 2019 by

A couple weeks ago, the Salt Lake Tribune reported that the church told Utah stake presidents to start calling “specialists who can assist church members to better understand and participate in the civic process.” Over the weekend, I listened to Ep. 82 of the Trib‘s “Mormon Land” podcast, which discussed this calling with the Hinckley Institute’s Morgan Lyon Cotti. That discussion was an excellent and substantive discussion of why the church might be interested in doing this, and the benefits of additional civic engagement.

At this point, it’s not clear precisely what being a civic process specialist will entail, though, among other things, they might help people figure out how to register to vote, figure out how, when, and where to vote, and, apparently, given them some guidance with Utah’s caucus system. The church has been clear that it will continue to be neutral with respect to candidates and parties. Still, there are people who worry that the specialists will be less nonpartisan than the church. Which brings up the question: can the church do this, or is it going to lose its tax exemption?

Spoiler alert: it’s not going to lose its exemption. [Read more…]

Filed Under: Current Events, Mormon, Politics, Society & Culture Tagged With: , , , , , , , , , , , , , , , ,

Explainer: Tax-Exempt Salt Lake Tribune

May 8, 2019 by

Yesterday, the Salt Lake Tribune reported that the Salt Lake Tribune has been in serious discussions about becoming a tax-exempt newspaper.[fn1]

This is kind of a big deal. I mean, it wouldn’t be the first tax-exempt newsroom, of course. NPR, for example, has been delivering news as a tax-exempt organization since 1971. And it’s not even the first newspaper (-like organization): ProPublica, a tax-exempt investigative newsroom, has been tax-exempt for more than a decade, and Voice of San Diego, which does the same type of investigative journalism in the San Diego region, has been exempt since 2005.[fn2] WNYC’s On the Media was talking about the potential of newspapers become tax-exempt around that same time, too.[fn3]

But if this happens, the Trib would become the first legacy newspaper to switch from a for-profit model to a tax-exempt, not-for-profit model. Which raises at least two significant questions: why and how. So let’s do an Explainer! [Read more…]

Filed Under: Current Events, Society & Culture Tagged With: , , , , , , , ,

The Church Is Going to Pay More In Taxes

January 28, 2019 by

In 1972, the church opened its new Church Office Building at 50 East North Temple Street. The 28-story building, built by Christiansen and Clyde Construction Company for $31.3 million, allowed scattered church employees to all work under one roof. Initially, about 1,500 employees, who had been at 16 different locations, moved into the building. It was originally slated to provide office space to over 2,000 employees. And so that those employees could make it, the Church Office Building had 1,250-spot underground parking garage.

And the existence of that 1,250-spot underground parking garage means that the church owes federal income taxes for 2018.

Because yes, the church owes taxes for last year. And, perhaps to church members’ surprise, those taxes aren’t the result of secular liberals who hate Mormons/religion/God. Those taxes are the result of the Tax Cuts and Jobs Act, the GOP’s late-2017 tax reform that was both conceived of and passed without any input or votes from Democrats.  [Read more…]

Filed Under: Current Events, Economics, Mormon, Politics, Society & Culture Tagged With: , , , , , , , ,

The Loveloud Foundation

July 31, 2018 by

According to my Facebook feed, Saturday was the Loveloud Festival in Salt Lake. Now in its second year, Loveloud is meant to provide love and acceptance for LGBTQ+ kids. If you’ve followed my #MutualNight posts, you can probably guess that, even if I lived in Utah, I wouldn’t have gone. I’m 100% behind the festival’s message and its goals, but I’m not a big fan of its music.

I am, however, a big fan of charitable organizations. And guess what? The sponsoring organization of the festival is the Loveloud Foundation, a tax-exempt public charity.[fn1]

Now I don’t know a lot of details about the Loveloud Foundation; it received its tax exemption last year, and hasn’t filed a Form 990 yet. (Next year it will file the form, which is a public document.) But there are a couple broad things that we know about it just by virtue of its being tax-exempt. So let’s have a Q&A explainer! [Read more…]

Filed Under: Current Events, Gender & Sexuality, Media, Music, Politics, Pop Culture, Society & Culture Tagged With: , , , , , , , , , ,

On Fred Karger, Tax Exemptions, and the Mormon Church

December 16, 2016 by

Today, Fred Karger asked a provocative question: should the Mormon church lose its tax exemption? To answer that question, he’s asking for certain (anonymous) tips about the church’s use of its money, though implicit in the way he frames the question is that yes, it should. In short, his argument the the church should lose its tax exemption seems to follow these contours:

  • The church has, and earns, lots of money.
  • The church engages in for-profit businesses and investments with that money, and doesn’t pay taxes on its for-profit earnings.
  • The church uses tax-deductible tithing money for lobbying, in contravention of the tax law.

He wants to collect information to ultimately file “the biggest, loudest and most comprehensive IRS challenge to a Church’s tax-exempt status in history.”  [Read more…]

Filed Under: Current Events, Society & Culture Tagged With: , , , , , , ,

LDS Inc.

June 2, 2016 by

mormons incSo the first thing to do is admit that I don’t always get internet-speak. That said, is there any way that “LDS Inc.,” written in implicit (or explicit) disparagement of the church isn’t stupid?[fn]

I mean, I see it occasionally. And I kind of assume that its provenance is the Aug. 4, 1997, Time magazine cover.

The thing is that while contextually, the use of “LDS Inc.” is clearly meant as a criticism, I can’t figure out what is being critiqued. Saying “LDS Inc.” may make a (vaguely) factual assertion, but it makes no substantive moral or ethical assertion.  [Read more…]

Filed Under: Mormon Tagged With: , , , , , , ,

Mormonism in the Internal Revenue Code

April 15, 2015 by

taxWhenever possible on April 15, I like to put together a quick post about some Mormon-related trivia from the tax world. This year’s edition: church financial disclosure.

In brief: tax-exempt organizations by definition don’t pay taxes. Prior to 1943, they also didn’t file any tax returns—they were pretty much entirely outside of the tax regime. That changed with the Revenue Act of 1943, which required tax-exempt organizations to file annual information returns. Broadly speaking, those returns lay out the sources of the organization’s income and where it spends that money.[fn1]

The return-filing requirement continues today, in largely (though not entirely) the same form. And, in marked contrast with most tax returns, the law requires tax-exempt organizations’ returns to be made available for public inspection. (If you want to inspect some, sign up for a free account here and have at it.)  [Read more…]

Filed Under: Holiday, Mormon, Politics, Society & Culture Tagged With: , , , , , , ,

Does Open Stories Foundation Qualify As Tax-Exempt?

February 9, 2015 by

Last week, Peggy Fletcher Stack wrote an article about John Delhin’s finances. A couple things leaped out at me, particularly salient, perhaps, because of research I’ve been doing recently, and because they raise difficult-to-see red flags, both for the Open Stories Foundation (“OSF”) and for other Mormons (or, more generally, Americans) who want to start a tax-exempt organization.[fn1]

Tl;dr: OSF looks like it is violating the prohibition against private inurement, which would compromise its tax-exempt status; it should at the very least get a tax practitioner with experience in the tax-exempt area to look closely. Also, anybody who wants to operate a tax-exempt entity needs to get competent legal advice upfront: the tax-exempt area is a minefield of compliance traps. [Read more…]

Filed Under: Current Events, Internet & Social Media, Media, Mormon, Society & Culture Tagged With: , , , ,

Merging Religious and Secular News(papers)

April 4, 2014 by

deseret_news_private_collecThe Church News is moving. It has just announced that stories from the Church News will be posted on DeseretNews.com, that LDSChurchNews.com will redirect to the DN site, and that eventually the archives will be moved as well.

Which is fine and good, I suppose. Apparently, the Church News was hosted on a platform that couldn’t be supported or upgraded.[fn1] So the consolidation seems to make sense from a technical point of view.  [Read more…]

Filed Under: Current Events, Internet & Social Media, Media, Mormon Tagged With: , , , , ,