Tribune Article and New Details About The 100 Billion Fund

[Analytics]

1 hour ago, Bob Crockett said:

I challenge this.  What law requires a religion to spend money?

The question isn't whether "a religion" is spending money. The question is whether the 501C3 Ensign Peak Advisors is spending enough to pass the commensurate test.

[provoman]

39 minutes ago, Analytics said:

The question isn't whether "a religion" is spending money. The question is whether the 501C3 Ensign Peak Advisors is spending enough to pass the commensurate test.

Does commensurate test even apply to EPA.

From my understanding Lars and David misapplied tax code when bringing up distribution requirements and commensurate test.

Edited December 28, 2019 by provoman

[Bob Crockett]

19 hours ago, Analytics said:

The question isn't whether "a religion" is spending money. The question is whether the 501C3 Ensign Peak Advisors is spending enough to pass the commensurate test.

And where has the IRS said that the commensurate test applies to a religion?  Religions have protection under the First Amendment that charities do not.  Charities must spend money commensurate with their solicitation for funds.  Religions do not.  Otherwise, if Congress said a religion must spend 20% of its assets on charitable endeavors, the Constitution would have something to say about that.

[LoudmouthMormon]

I did a season at H&R Block a few years back.  It might be a nice retirement gig at some point in the future.  I learned lots of interesting things, like a tax person can marry people at the tax desk.

Of relevance to this discussion, is I also learned how the tax code is a sometimes-schizophrenic neverending morass of details that may or may not apply to a certain situation.  I also learned that the IRS has a "tax court", the purpose of which is to figure out how a certain situation should be taxed.  It is common to get first, even second tier advice from the IRS, and then push the matter to tax court, which results in an opposite decision to which everyone must change their practice in order to adhere.   Every season at H&R block, it's normal to receive a few urgent communications on recent tax developments that change how a tax adviser goes about doing their job.  Also, several updates to the tax software that change how things are treated.  

Just please, don't anybody be going around thinking that tax law is based on notions of right or wrong.  It's based on notions of legislative attempts to favor this or that political group, dressed up as right or wrong.  It's an important distinction.   The tax code has no soul, and aligning to it's intent does not make you good or bad.  Aligning to it's law is what keeps you from violating tax law - that's about the only moral implication of paying taxes, whether you're an individual or a church or a government body or a business entity.

Edited December 29, 2019 by LoudmouthMormon

[Analytics]

1 hour ago, Bob Crockett said:

And where has the IRS said that the commensurate test applies to a religion?  Religions have protection under the First Amendment that charities do not.  Charities must spend money commensurate with their solicitation for funds.  Religions do not.  Otherwise, if Congress said a religion must spend 20% of its assets on charitable endeavors, the Constitution would have something to say about that.

Ensign Peak Advisors isn't a religion. It is a charity.

[Sanpitch]

2 hours ago, Analytics said:

Ensign Peak Advisors isn't a religion. It is a charity.

Doing a search for Ensign Peak Advisors, I find, "Ensign Peak Advisors, Inc. operates as an investment management company. The Company serves customers in the State of Utah."

How does that fit into the discussion?  It doesn't sound like a charity.

[Bob Crockett]

2 hours ago, Analytics said:

Ensign Peak Advisors isn't a religion. It is a charity.

It is a non-profit.  It is the investment arm of the Church.  According to an SL Trib article dated Dec. 19:

""Nielsen alleged that the organization has not used the money to give to charity but has instead largely retained it except for bailing out businesses and other ventures."

So, the funds went to bail out a Church asset, Beneficial Life (unsuccessfully so) so that creditors of BL could be paid?  There is no obligation for a religion to fund charities.  None.  It isn't made different because the Church uses 501(c)(3) organizations.  COPB and COFP are 501(c)(3) organizations. 

And the funds are otherwise used to acquire income-producing assets and pay for temples and meetinghouses?  

This is protected.

[Bob Crockett]

4 minutes ago, Sanpitch said:

Doing a search for Ensign Peak Advisors, I find, "Ensign Peak Advisors, Inc. operates as an investment management company. The Company serves customers in the State of Utah."

How does that fit into the discussion?  It doesn't sound like a charity.

It is a non-profit.  That means it has filed a statement with the Utah Attorney general stating that its assets will be used for charitable or religious purposes.  It is the latter purpose which saves it; there is no legal obligation for a religion to ever spend its money.

[Analytics]

1 hour ago, Bob Crockett said:

It is a non-profit.  It is the investment arm of the Church.  According to an SL Trib article dated Dec. 19:

""Nielsen alleged that the organization has not used the money to give to charity but has instead largely retained it except for bailing out businesses and other ventures."

So, the funds went to bail out a Church asset, Beneficial Life (unsuccessfully so) so that creditors of BL could be paid?  There is no obligation for a religion to fund charities.  None.  It isn't made different because the Church uses 501(c)(3) organizations.  COPB and COFP are 501(c)(3) organizations. 

And the funds are otherwise used to acquire income-producing assets and pay for temples and meetinghouses?  

This is protected.

As I understand the situation, calling it "the investment arm of the church" isn't an accurate description of what Ensign Peak Advisors (EPA) actually is. EPA is its own standalone entity and isn't owned by the Corporation of the President of the Church (COP) or any of its subsidiaries. It was formed 22 years ago, just one month after the TIME magazine "Mormon Inc." cover story. According to the corporate charter, it is a 501(c)3 charity whose sole purpose is to  support the religious, educational, and charitable missions of the Church.

The COP and its subsidiaries have their own investment and treasury operations. About once a year, the COP donates $1 to $2 Billion in surplus to the charity EPA. EPA's assets are not on the Church's balance sheet in any way. The Church doesn't own stock in EPA or have any direct claim on any of EPA's assets through bonds or notes or anything else. This appears to be EPA's purpose of existing--to keep assets owned "by the Church" off of the Church's actual balance sheet.

For 22 years, this stand--alone charity has received tens of billions in donations from the Church, and has earned tens of billions more in investment income. It never donated any money back to the Church or otherwise spent a penny on anything related to the religious, educational, or charitable mission of the Church. The only time money has left the EPA was to bail out an insurance company and cost overruns on the mall project. When Nielsen says EPA hasn't given any money to charity, he is claiming it hasn't given any money to any religious, educational, or charitable purposes. 

[Tacenda]

24 minutes ago, Analytics said:

As I understand the situation, calling it "the investment arm of the church" isn't an accurate description of what Ensign Peak Advisors (EPA) actually is. EPA is its own standalone entity and isn't owned by the Corporation of the President of the Church (COP) or any of its subsidiaries. It was formed 22 years ago, just one month after the TIME magazine "Mormon Inc." cover story. According to the corporate charter, it is a 501(c)3 charity whose sole purpose is to  support the religious, educational, and charitable missions of the Church.

The COP and its subsidiaries have their own investment and treasury operations. About once a year, the COP donates $1 to $2 Billion in surplus to the charity EPA. EPA's assets are not on the Church's balance sheet in any way. The Church doesn't own stock in EPA or have any direct claim on any of EPA's assets through bonds or notes or anything else. This appears to be EPA's purpose of existing--to keep assets owned "by the Church" off of the Church's actual balance sheet.

For 22 years, this stand--alone charity has received tens of billions in donations from the Church, and has earned tens of billions more in investment income. It never donated any money back to the Church or otherwise spent a penny on anything related to the religious, educational, or charitable mission of the Church. The only time money has left the EPA was to bail out an insurance company and cost overruns on the mall project. When Nielsen says EPA hasn't given any money to charity, he is claiming it hasn't given any money to any religious, educational, or charitable purposes. 

That does appear very suspicious to me, that it was used for the profit arm of the church, and possibly hidden from view of the IRS.

[Bob Crockett]

10 hours ago, Analytics said:

As I understand the situation, calling it "the investment arm of the church" isn't an accurate description of what Ensign Peak Advisors (EPA) actually is. EPA is its own standalone entity and isn't owned by the Corporation of the President of the Church (COP) ....

EPA's assets are not on the Church's balance sheet in any way. The Church doesn't own stock in EPA or have any direct claim on any of EPA's assets through bonds or notes or anything else. This appears to be EPA's purpose of existing--to keep assets owned "by the Church" off of the Church's actual balance sheet.

 

You are mistaken. 

There is no such thing as a shareholder in a nonprofit. It exists on its own. If you disagree, name one shareholder of EPA. 

There is no reason for the church to keep a balance sheet.  If so, point me to that balance sheet. Where is it displayed, published or filed?  I'd like to see it.  

Therefore there is no reason to keep things on or off a balance sheet or to hold church assets in any particular way.  If you disagree, point to the law or regulation or FASB standard requiring a church to keep a balance sheet. 

Now, as a libertarian I believe churches should be treated no differently than a Sub C corporation, but that isn't the case. At least in the US.  I know that in the UK the church is treated by like any other corporation but its filings are limited to the UK. 

 

Edited December 30, 2019 by Bob Crockett

[Abulafia]

10 hours ago, Analytics said:

As I understand the situation, calling it "the investment arm of the church" isn't an accurate description of what Ensign Peak Advisors (EPA) actually is. EPA is its own standalone entity and isn't owned by the Corporation of the President of the Church (COP) or any of its subsidiaries. It was formed 22 years ago, just one month after the TIME magazine "Mormon Inc." cover story. According to the corporate charter, it is a 501(c)3 charity whose sole purpose is to  support the religious, educational, and charitable missions of the Church.

The COP and its subsidiaries have their own investment and treasury operations. About once a year, the COP donates $1 to $2 Billion in surplus to the charity EPA. EPA's assets are not on the Church's balance sheet in any way. The Church doesn't own stock in EPA or have any direct claim on any of EPA's assets through bonds or notes or anything else. This appears to be EPA's purpose of existing--to keep assets owned "by the Church" off of the Church's actual balance sheet.

For 22 years, this stand--alone charity has received tens of billions in donations from the Church, and has earned tens of billions more in investment income. It never donated any money back to the Church or otherwise spent a penny on anything related to the religious, educational, or charitable mission of the Church. The only time money has left the EPA was to bail out an insurance company and cost overruns on the mall project. When Nielsen says EPA hasn't given any money to charity, he is claiming it hasn't given any money to any religious, educational, or charitable purposes. 

I found this reference to Endowment Funds.

An interesting read.

https://www.globalphilanthropic.com/blog/2017/05/endowments-why-your-charity-needs-one-and-how-to-get-one/

[Abulafia]

If Ensign Peak is an endowment fund,  then it seems to have a number of options as to how it is set up legally.  

 

The only reference I can find so far (forgive me if this has already been highlighted) is this..

 

NAICS Code: 8132 NAICS Title: 8132-Grantmaking and Giving Services

 

So EPA has been classified as per the  above, which does seem to suggest that it's purpose is to disburse funds as grants and giving? 

 

https://secure.utah.gov/bes/details.html?entity=1376719-0140

 

 

Edited December 30, 2019 by Abulafia

[Calm]

5 minutes ago, Abulafia said:

If Ensign Peak is an endowment fund,  then it seems to have a number of options as to how it is set up legally.  

 

The only reference I can find so far (forgive me if this has already been highlighted) is this...

There is a letter of incorporation included as an exhibit in the exposé that lists three or four sections of relevant IRS code that can help with determining how it is legally defined. 

[Abulafia]

21 minutes ago, Calm said:

There is a letter of incorporation included as an exhibit in the exposé that lists three or four sections of relevant IRS code that can help with determining how it is legally defined. 

Thanks. On page 30, Reference 13, he acknowledges that it is difficult for a whistleblower to know whether EPA is type I, II or III supporting organisation?

[Abulafia]

But, all types come with a legal expectation to do charitable work from time to time?

[Abulafia]

There seems to be mixed opinions among tax specialists as to whether EPA has kept within the law. 

[Analytics]

4 hours ago, Bob Crockett said:

You are mistaken. 

There is no such thing as a shareholder in a nonprofit. It exists on its own. If you disagree, name one shareholder of EPA. 
 

And that means I'm mistaken in asserting the Church is not a shareholder of EPA how, exactly?

4 hours ago, Bob Crockett said:

There is no reason for the church to keep a balance sheet.  If so, point me to that balance sheet. Where is it displayed, published or filed?  I'd like to see it.  
 

I can't tell if you are being facetious, are hair-splitting over whether it should be called a "balance sheet" or a "statement of financial position", or are just really ignorant about accounting.

The Church's lack of financial transparency isn't evidence that it doesn't create financial statements. 

4 hours ago, Bob Crockett said:

Therefore there is no reason to keep things on or off a balance sheet or to hold church assets in any particular way.  If you disagree, point to the law or regulation or FASB standard requiring a church to keep a balance sheet. 
 

A balance sheet is an intrinsic part of accounting. The plain truth of the matter is that the Church does hold assets in a particular way. Surely you aren't seriously suggesting it holds assets the way it does without a reason or motivation.

4 hours ago, Bob Crockett said:

Now, as a libertarian I believe churches should be treated no differently than a Sub C corporation, but that isn't the case. At least in the US.  I know that in the UK the church is treated by like any other corporation but its filings are limited to the UK. 

On that point we agree.

[Bob Crockett]

3 hours ago, Analytics said:

And that means I'm mistaken in asserting the Church is not a shareholder of EPA how, exactly?

I can't tell if you are being facetious, are hair-splitting over whether it should be called a "balance sheet" or a "statement of financial position", or are just really ignorant about accounting.

The Church's lack of financial transparency isn't evidence that it doesn't create financial statements. 

A balance sheet is an intrinsic part of accounting. The plain truth of the matter is that the Church does hold assets in a particular way. Surely you aren't seriously suggesting it holds assets the way it does without a reason or motivation.

On that point we agree.

Nobody is a shareholder of a nonprofit. Non-profit 101.  Surely you are aware of such fact. 

You don't seem to get the balance sheet issue.  If the Church is not required by to have a balance sheet then why would it be motivated to get things off the balance sheet. 

[Bob Crockett]

4 hours ago, Abulafia said:

There seems to be mixed opinions among tax specialists as to whether EPA has kept within the law. 

The easy answer is cite the law EPA has violated. 

[smac97]

4 hours ago, Abulafia said:

But, all types come with a legal expectation to do charitable work from time to time?

There is no legitimate argument that the Church does not "do charitable work from time to time."

Thanks,

-Smac

[Bob Crockett]

4 minutes ago, smac97 said:

There is no legitimate argument that the Church does not "do charitable work from time to time."

Thanks,

-Smac

Nor does any law compel the church to engage in any charitable work. 

[Abulafia]

38 minutes ago, smac97 said:

There is no legitimate argument that the Church does not "do charitable work from time to time."

Thanks,

-Smac

Smac, EPA, not the church.

[Analytics]

33 minutes ago, Bob Crockett said:

Nobody is a shareholder of a nonprofit. Non-profit 101.  Surely you are aware of such fact. 

Of course. This just proves my point.

33 minutes ago, Bob Crockett said:

You don't seem to get the balance sheet issue.  If the Church is not required by to have a balance sheet then why would it be motivated to get things off the balance sheet. 

I clearly don't. By way of analogy, from my perspective the conversation is like this:

A: Bob started exercising and eating less junk food. I think it is because he is trying to lose weight.

B: No way! Show me where he is required by law to have a weight! If you can't show me a law that says he is required to have a weight, that proves he doesn't have one. So if he isn't required to have weight, why we he try to lose it?

[Analytics]

45 minutes ago, Bob Crockett said:

The easy answer is cite the law EPA has violated. 

1.501(c)(3)-1(e)(1). See the IRS's Rev. Rul. 64-182, 1964-1 C.B. 186. (https://www.irs.gov/pub/irs-tege/rr64-182.pdf)

A corporation organized exclusively for charitable purposes (such as EPA) must perform "a charitable program commensurate in scope with its financial resources." 

Ultimately the concerns raised by Sam Brunson and Phil Hackney (law professors who specialize in this stuff) might prove to be unnecessary, but it isn't becoming to pretend their concerns have no basis in the law.