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James huntsman (jon's brother) sues church for 'fraud'


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5 hours ago, Fair Dinkum said:

No where has the church ever stated that it would build a massive reserve fund and invest in for profit real estate and bail out its insurance affiliates.

It is a good thing they do have a big reserve fund.  Any organization that spend everything that they take in will have a hard time surviving when hard times come.   That is true for business, churches, and families.  We should all build as much wealth as possible while helping others.  That is just good sound financial planning.  Perhaps the Church does not need a 100 billion reserve fund, but a reserve fund in the billions is good given the size of the church and what God has mandated what the Church needs to do.  Overall no individual is has benefit from the fund size. No evidence of any GA or anyone else buying 500 million dollar yachts or paying 25 million for homes with these funds.  Since no individual benefits based on the size of the fund, does it really matter how large the fund is? 

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3 minutes ago, JLHPROF said:


We may have separation of Church and State today but that is a temporary situation.  At some point they will be combined.  And that society that is prepared for the Savior's return we refer to as Zion.

Not only temporary but different.  People in the US make a big deal about democracy.  The kingdom of God is not a democracy.  Its a kingdom run by a KING.

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1 hour ago, Analytics said:

I'd guess that about 45% of its income, including both tithing income and investment income/profit, goes towards its actual non-profit work. The remaining 55% goes to growing its investment portfolio. The numbers might be different than that, but in either case, I think it is safe to say that "most," meaning greater than 50%, of its total income goes towards growing the investment portfolio.

It also included some serious arguments about the tax law. Whatever extraneous things it includes for various audiences doesn't have any bearing on the serious elements of the complaint.

I doubt that your conclusion is correct but maybe.

There were one or two attempts at diving into tax law. I am not an expert but I have been peripherally connected to several tax-privileged organizations and their accounting and learned a little for my own protection and just out of curiosity. It read like “baby’s first attempt at a lawsuit” to me. I suppose I could be wrong. I have been wrong before. Once. A long time ago.

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2 minutes ago, carbon dioxide said:

Not only temporary but different.  People in the US make a big deal about democracy.  The kingdom of God is not a democracy.  Its a kingdom run by a KING.

This too. At the risk of ticking off our resident C.S. Lewis hater:

Quote

“I am a democrat because I believe in the Fall of Man.

I think most people are democrats for the opposite reason. A great deal of democratic enthusiasm descends from the ideas of people like Rousseau, who believed in democracy because they thought mankind so wise and good that every one deserved a share in the government.

The danger of defending democracy on those grounds is that they’re not true. . . . I find that they’re not true without looking further than myself. I don’t deserve a share in governing a hen-roost. Much less a nation. . . .

The real reason for democracy is just the reverse. Mankind is so fallen that no man can be trusted with unchecked power over his fellows. Aristotle said that some people were only fit to be slaves. I do not contradict him. But I reject slavery because I see no men fit to be masters.”

Note that when he says he is a democrat he means a believer in democracy and not an adherent to a particular political party.

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I pay tithing not because it will be used for charity.  There are plenty of non-LDS charities out there if that was the case.  I pay tithing simply to fulfill the command by God that is required of me. It is not for the tith giver to make demands on how the tith is used.  Tithing does not come with strings attached.  Once the tithing paid, our job is done.  The Lord accepts our action.  What the Church does with the funds is not our concern and those controlling it are accountable to God to see that is used properly.  If there is fraud, that is between those overseeing the fund in the Church and God.  Fraud does not exist between the tith payer and the church.  God has never made a promise to the tith payer of exactly how those tiths would be used.   If a tith payer demands strings attached, they are modifying the law of tithing to their own wishes.  If am sure the Lord might have a thing to say to those people at judgement. 

Edited by carbon dioxide
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8 minutes ago, The Nehor said:

This too. At the risk of ticking off our resident C.S. Lewis hater:

Note that when he says he is a democrat he means a believer in democracy and not an adherent to a particular political party.

Yes.  The Book of Mormon also teaches us that the best system of government is run by a king but only if the king is righteous.  A wicked king however can really screw things up.  So in our current world, kings don't make good governments.  A righteous king like Heavenly Father and Jesus however make perfect government.  No need for elections. 

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4 hours ago, JLHPROF said:

Except tithing is NOT donated for charitable services.  That's not its purpose.

Thanks for making my point. The Corporation of the President of the Church....is a 5013C entity.  As a non-profit entity all donations received can only be used for charitable reasons (ie. Cannot be used for bailing out an insurance company) and the entity must show that it is actually using those funds for charitable reasons (ie. Not hoarding the money and blessings of the members)

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6 hours ago, Analytics said:

Accountants don't talk this way. They consider money to be "fungible." Maybe there is a solid accounting basis behind what they are claiming here (e.g. that the money that was distributed from Ensign Peaks was less than the inception-to-date investment income), but the claim is so vague it's impossible to know what they mean.

have you ever heard of funds based accounting?

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5 hours ago, The Nehor said:

He is not wrong.

When you pay your electric bill did that money come from your wages? Your income tax refund? The money you pulled out of your portfolio? Was it from your current job or the job before it? Money is fungible and one dollar is the same as another so once you throw them into the pot it doesn’t much matter where it came from.

Now you can (and to an extent the church does) earmark some money to specific purposes. The money that goes into Fast Offerings goes into the same account with tithing and the Ward Mission Fund but the ward tracks how much they ‘own’ and the balances come out right.

The danger is best represented by a lot of state lotteries that champion that all the money made goes to schools or veterans or whatever. While technically true the question is to ask whether that means the schools and veterans get more money because you play the lottery or do they get a fixed amount that just happens to be equal to or greater than what the lottery brings in? Spoilers: It is the latter and you playing the lottery doesn’t help kids or veterans.

I personally suspect the Church has a good idea of the proportion of the various funds in investments that come into their care and that their statement about the money coming from businesses is correct but whether the church is innocent or not (and I suspect they are honest here) these kinds of claims are inherently dubious because of the nature of how money works. When something looks like a slush fund it is normal to look at it carefully.

I don't think you have much of an idea of funds based accounting.  In funds based accounting (the accounting used by governments and non profits)  money is not fungible.  The government can't used the street maintainence funds to pay for the library.  The funds are segregated and restricted to specific uses, based on their source. 

Gas tax can only be used for highway improvements, for example.  

Most non profits use a funds based accounting system, rather than a profit and loss based accounting system.

 

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3 minutes ago, Danzo said:

have you ever heard of funds based accounting?

If they use fund accounting, that would at least provide a starting point for analysis of expenditures by program.  It would also be a starting point for tracing back to the source of funds in terms of bank accounts, etc.  It is not a panacea to the controversy, however.

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1 minute ago, Danzo said:

I don't think you have much of an idea of funds based accounting.  In funds based accounting (the accounting used by governments and non profits)  money is not fungible.  The government can't used the street maintainence funds to pay for the library.  The funds are segregated and restricted to specific uses, based on their source. 

Gas tax can only be used for highway improvements, for example.  

Most non profits use a funds based accounting system, rather than a profit and loss based accounting system.

 

Well, having audited a couple of General Funds in my day, I think you are overstating the degree to which this segregation is actually performed in practice.

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4 minutes ago, Danzo said:

I don't think you have much of an idea of funds based accounting.  In funds based accounting (the accounting used by governments and non profits)  money is not fungible.  The government can't used the street maintainence funds to pay for the library.  The funds are segregated and restricted to specific uses, based on their source. 

Gas tax can only be used for highway improvements, for example.  

Most non profits use a funds based accounting system, rather than a profit and loss based accounting system.

 

I actually described it briefly at one point without using the name.

Edited by The Nehor
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5 minutes ago, ttribe said:

If they use fund accounting, that would at least provide a starting point for analysis of expenditures by program.  It would also be a starting point for tracing back to the source of funds in terms of bank accounts, etc.  It is not a panacea to the controversy, however.

I can't see how they wouldn't use a funds based accounting. Its pretty much the standard for non profits of that size.

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Is it interesting that it's been many months (almost two years?  Or maybe just over a year, I can't remember) since the whistleblowing incident that Huntsman is saying lead to his suit for fraud, and the IRS isn't doing anything about it?  If the whistleblowing information was scandalous as some people are saying, why isn't the IRS investigating?

Or is that timeline pretty normal for this kind of stuff?  I have no idea how fast the IRS works.

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10 minutes ago, bluebell said:

Is it interesting that it's been many months (almost two years?  Or maybe just over a year, I can't remember) since the whistleblowing incident that Huntsman is saying lead to his suit for fraud, and the IRS isn't doing anything about it?  If the whistleblowing information was scandalous as some people are saying, why isn't the IRS investigating?

I think what's more interesting is that his lawsuit said he stopped paying tithing in 2017 (https://www.scribd.com/document/500016697/Huntsman-Lawsuit page 5, point 16). So 2 years before the whistleblowing incident.

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31 minutes ago, Danzo said:

I can't see how they wouldn't use a funds based accounting. Its pretty much the standard for non profits of that size.

Actually, the more I think about it, the less likely it seems to me that they would be using fund accounting.  Fund accounting is typically only used when there are statutory or contractual (e.g. grants) restrictions. Otherwise, a non-profit that simply receives donations just issues a typical Balance Sheet and P&L with a slightly different "equity" roll-forward.  Yeah, I audited a few of those back in the day, too.

Edited by ttribe
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5 hours ago, smac97 said:

I will re-state: Then "fraud" doesn't really enter into the picture as regarding this lawsuit, I think.

I think the Church keeps pretty good records, and follows "generally accepted accounting principles."

Nielsen filed his complaint against the Church 15 months ago.  It appears that the IRS either A) never investigated or else B) investigated and found no wrongdoing.  Either way there is no investigation by the IRS of Nielsen's allegations.  I think that merits some attention.

Thanks,

-Smac

I have it on good authority that the IRS laughed at the complaint. The IRS has gotten burned when challenging churches. There’s no way they want to take on the Church based on the publicized facts. It’s not even close. 

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20 minutes ago, ttribe said:

Also, simply because we haven't heard anything it doesn't mean they aren't doing anything. 

True. I was thinking of the statement by Eric Hawkins:

“Hawkins also told the Post that the Church is not in talks with the IRS about the complaint and nothing has changed with the use of funds from Ensign Peak Advisors, the church’s investment division, since the complaint.”

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4 hours ago, ttribe said:

Yes, intent is a critical element.  As to teaching those limitations - that would be an issue of fact for evaluation by the court or a trier-of-

4 hours ago, ttribe said:

Yes, intent is a critical element.  As to teaching those limitations - that would be an issue of fact for evaluation by the court or a trier-of-fact.

The tort of deceit or fraud requires: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.

You can’t argue fraud when it comes to tithing because it’s an act of faith—not reliance. Huntsman’s complaint should be dead in the water. The fact that the church has asked for tithes many decades before any of these representations were reportedly made renders this case completely frivolous.

The church should move for summary judgment on (a), (d), and (e) and make Huntsman pony up his evidence. Just for fun. 

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As this thread has once again made abundantly clear:

People who don't like the Church when they learn that, through sound fiscal management principles, it may have a US$100 billion reserve: :shok:

Me when I learn the same thing: :yahoo:

Also me when I think about how my tithes will help this purported reserve grow even larger as well as all the things the Church can do with it: :wub:

People who don't like the Church when they can't convince me that my response is the wrong one: :fool:

Edited by Hamba Tuhan
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7 minutes ago, PacMan said:

The tort of deceit or fraud requires: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.

You can’t argue fraud when it comes to tithing because it’s an act of faith—not reliance. Huntsman’s complaint should be dead in the water. The fact that the church has asked for tithes many decades before any of these representations were reportedly made renders this case completely frivolous.

The church should move for summary judgment on (a), (d), and (e) and make Huntsman pony up his evidence. Just for fun. 

I'm well aware of the requirements to prove fraud.  The "act of faith" element is clearly believed by the Plaintiff to be something other than that.  

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Since there is no allegation that anyone enriched themselves, the benefits of tithing reside within the giver. 
 

They can take mine and burn it for all I care. I’ve already had the blessings. 

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