Forum: Author Hangout

Anybody know what that approval of tax exemption entails?

check the USA IRS website for the correct info - I doubt it's a rubber stamp job, but I also doubt they try to establish how serious a religion is as they approved Scientology which started as a bet.

My understanding is in the USA anyone can be a preacher and anyone can start a church. However, if you want to collect tax free donations you have to apply to the government for approval, otherwise any money given to you is taxed as an income.

While there are no restrictions on which religions are or aren't valid, there are laws governing activities of churches. Basically, if you're a non-profit, you've got to document how you spend your money, and for churches, you were (until recently) required to limit what you say politically in association with your church (i.e. no telling your congregation to vote for candidate X, or that voting for candidate Y will condemn you to hell for all eternity). Sadly, since that restriction was overturned, churches are now becoming unregulated fund-raising groups for specific far left/right viewpoints.

Most times off-the-wall churches crash, is when they've committed specific crimes (polygamy, child sexual abuse, prostitution, and yes, outright murder on their 'church' grounds). Then, when the government (i.e. either Police or FBI intervene, they 'resist' and most end up dying by their own choice).

Sadly, since that restriction was overturned, churches are now becoming unregulated fund-raising groups for specific far left/right viewpoints.

It was trivially easy to get around this before. When I was involved in church leadership, I had to explain to one of the lay preachers that he could not name any political candidate in his semon, but he could, absolutely, advocate for a position. He could even direct people to vote for 'pro-life' candidates, so long as he didn't name them or their party.

So changing the rule didn't actually change much, because position advocacy was always acceptable.

The business then pays the owner for his services, which becomes taxable income. Since the owner doesn't want to pay taxes, they try to make what they get non-taxable income. A good accountant helps, but many evangelists get in trouble with the IRS.

Having run the finances for a small church, the rules can be very complicated depending on how you structure your payments to your pastor and how you handle a 'rectory' or 'manse' (i.e. owned by the church, or an allowance paid to the pastor).

That said, if you don't try to cheat, the rules aren't onerous and are fairly easy to follow. Our pastor's salary was about 60/40 salary vs. housing allowance (with the housing allowance being non-taxable). We also paid his health insurance and contributed to his retirement fund.

In the fifteen years I did that, I never once heard a word from the IRS and neither did he. But then again, we weren't trying to cheat!

In our case, the biggest issue was ensuring we structured our bookstore such that it qualified as tax exempt (basically, only open before/after services, and mostly selling to the congregation or visitors, with all transactions occurring in the church building).

And making sure we renewed our various tax exemptions as required. Letting those expire can be nightmarish.

When I said evangelists, I was thinking of people like Jim and Tammy Fey Bakker and other televangelist who seem to live very affluent lifestyles that exceed their reported income. From what I understand, the cost of that elevated lifestyle is frequently written off as an expense incurred by their ministry or by outright fraud.

I was thinking of the ministers with the $5,000 suits and travel by private jet. They are the ones who have problems with the IRS.

Yep, those are the ones.

For me Jim Bakker epitomizes that type of person. According to a Wikipedia article, Jim Bakker:
https://en.wikipedia.org/wiki/Jim_Bakker

1. Redirected more than a million dollars from his PTL ministry account to his personal use.

2. Paid Jessica Hahn, the PTL secretary, $279K from the PTL account to silence her regarding her alleged account of being drugged and raped by Jim Bakker and former PTL Club co-host John Wesley Fletcher.

3. Absconded with $3.4M from a mail fraud scheme involve selling life time memberships to his followers.

He was sentenced to 45 years in prison, but the judge made inappropriate remarks during the sentencing and he was resentenced to 8 years and released on parole after 5 years in 1994.

In 2003, he returned to his televangelist career and began broadcasting the The Jim Bakker Show. Any bets on how much money he has redirected since he started his new career.

You may not understand DS.

1. Bakker was not brought up on charges by the IRS. Initially the FCC investigated missing funds that had been raised via his television ministry. He lost his TV station. The Justice department decided to not prosecute. The IRS learn that he had used $1.3M of ministry funds for his personal benefit; evidently he didn't declare the funds as personal income. They didn't act until after the Jessica Hahn scandal. Eventually he was charged with mail fraud, wire fraud, and conspiracy.

2. You are right about Bakker having learned and it will be harder to get a conviction. However, people like Bakker think they are smarter than the system. The system may be slow, but it will eventually catch up to him and whatever he is doing now.

3. The IRS statutes don't apply. Bakker did not form a church. His ministry is within an existing church. The authorities would go after Bakker, not the church.

Of course one could always join the Universal Life Church which is very lax concerning the individual churches theology and dogma and is recognized by the IRS. They also provide all the legal information that you need to stay on the right side of the law. Now, when the congregation gets larger you may need more than the information they provide but for home churches and congregations of say 200 or less. it should be sufficient.

more so the number of clear cults attempting to legitimize themselves through 'official' recognition.

I believe the practice of one's religion is an honest avocation. However, I also believe churches that define how you are to worship and what you are to think are cults. Most churches meet that definition in my opinion.

I always figured Scientology was just a way for L.Ron to sell more books to the rich and stupid. Go figure.

It's both - a tax dodge and a way to fleece the rich. The cost for 'The Bridge' is probably in the $350k range. That'll get you from 'raw meat' off the street to OT VIII.

That cost does include your $3500 e-meter and a backup (which is required).

It is not his writing that is the issue, although I didn't care for his writing style. The issue seems to be about creating a church and using it to avoid income tax. With to me is income tax evasion, but the IRS rules allow it.

I feel that churches need to actually prove their income is not used for personal gain

A few simple law changes would see most of the problems resolved and upset the church hierarchy in many churches.

First - put limitation on the types of accommodation that can be provided to church officials and limit who can get such assistance. Say a basic residence for the preacher only.

Second - all monies donated to the church can only be spent on improving the worship facilities or helping the poor within the parish. Exception can be made for specific earmarked donations noted as such for help projects - say a Disaster Relief Fund or a Missionaries Fund, but they have to be within the limited list of purposes.

Third - no paid support positions within the church management beyond that of a janitor / caretaker role paid at the local award or average rates..

This would ensure most, if not all, of the funds raised are spent on the specified purposes or locally in supporting the community. It would also anger the bigger churches as the great bulk of the money would be spent at the local level and not shunted up the line to support Cardinals, Bishops and professional administrators the way it is now. It would also call a death knell on the tele-evangilist millionaires.

If, because of the first amendment, churches are exempt from taxation

The 1st Amendment states:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; ...

The 1st Amendment has nothing to do with taxation of an existing religion. Nor does it mention taxation of the free press.

There is NO logical reason to justify exemptions for religious organizations other than political pressure.

The logical reason goes back to the founding of the US, where the founders of this country at that time did not want a state religion, and the Church of England was their example. While the Archbishop of Canterbury is the senior cleric, the Supreme Governor of the Church (albeit today mostly symbolic) is the Queen.

Pastafarianism was specifically created to oppose religious discrimination and the preferential status of religious organizations.

Pastafarianism (AKA Church of the Flying Spaghetti Monster)originated as a protest against the Kansas Board of Education's decision to allow the teaching of intelligent design in public schools. Intelligent Design was a means of introducing the teaching of religion into the school system.

http://religion.wikia.com/wiki/Flying_Spaghetti_Monster