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60 Minutes Australia: "Cooking the Book of Mormon"


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34 minutes ago, Danzo said:

When every court in the nation agrees something is constitutional then it pretty much is, by definition. 

Maybe someday the courts will change their minds and it will become unconstitutional, but until then, it is. 

Or, as one of the lawyers I sometimes follow is prone to say, "Your feelings are not the law."

 

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32 minutes ago, Stormin' Mormon said:

I think we can both agree that the purchase of multi-million dollar mansions for televangelists should not be subsidized by that hard-working taxpaying family of four.  But surely it's not the case that the entirety, or even the majority, or even any sizeable portion of that supposed $71 billion subsidy is being used for that purpose.  To imply otherwise is a bad faith argument.

Surely, your disdain for religion can allow for the fact that much of that religious subsidy goes towards food banks, employment centers, soup kitchens, hospitals, elderly transport, and so much more.  Yes, it goes towards evangelizing and spreading messages not everyone believes in.  But if the tax-free status of religions in America isn't an unmitigated good, neither is it an unmitigated blight. It's worth debating the cost-benefit of the arrangement. That debate would need to examine what good comes out of the supposed subsidy to churches, and compare that to the cost the government would incur if it tried to replicate those benefits on its own. Our family of four may be freed from subsidizing religions to the tune of $860 per year, but how much more in taxes would they then need to pay in order to receive the services that they no longer receive from those faith-based organs of civil society?  

First off, thank you for actually addressing the point. In general, I agree with your approach for evaluating subsidies.

The concept of weighing how much harm and good are done under the banner of religion brings to mind Christopher Hitchens's book god [sic] is not Great, which addresses the question directly. The following passage deals with the ostensible "good" that the Catholic Church has done in providing children with education and orphanage services:

"How shall we reckon the harm done by dirty old men and hysterical spinsters, appointed as clerical guardians to supervise the innocent in orphanages and schools? The Roman Catholic Church in particular is having to answer this question in the most painful of ways, by calculating the monetary value of child abuse in terms of compensation. Billions of dollars have already been awarded, but there is no price to be put on the generations of boys and girls who were introduced to sex in the most alarming and disgusting ways by those whom they and their parents trusted."

Hitchens, Christopher. God Is Not Great (p. 391-392). Grand Central Publishing. Kindle Edition. 

Of course in principle we could say that "good" religions that teach humanistic ideals ought to be subsidized while religions that preach false and harmful things ought not to be subsidized, but that gets back to the Establishment clause that forbids the government from favoring some religious groups over others. 

The obvious answer is that if a religion wants to harness its power for secular, humanistic objectives, it can easily sponsor a separate organization that is unencumbered from the religion itself. For example, while I have a big problem with the LDS Church being subsidized by the government, I have no problem whatsoever with LDS Charities receiving subsidies. 

 

Edited by Analytics
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35 minutes ago, Analytics said:

 

That's an uninteresting point and is designed to avoid dealing with my actual arguments.

Then perhaps you should stop using as part of your argument claims that something is unconstitutional.

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33 minutes ago, Amulek said:

Ensign Peak Advisors is a non-profit corporation which is organized as a Supporting Organization and an Integrated Auxiliary of a Church.

I know that is the intention. However, according to your own link:

In general, the IRS will treat an organization that meets the following three requirements as an integrated auxiliary of a church.  The organization must:

  • Be described both as an Internal Revenue Code section 501(c)(3) organization and be a public charity under Code section 509(a)(1), (2), or (3),
  • Be affiliated with a church or convention or association of churches, and
  • Receive financial support primarily from internal church sources as opposed to public or governmental sources.
Emphasis added.
 
Despite its claims to the contrary, Ensign Peak Advisors does not meet the qualifications of being a public charity, and thus can't be a supporting organization nor an integrated auxiliary. 
 
That is my argument. I know the Church claims otherwise, but this is the heart of the dispute. In the words of Sam Brunson:
 
The weird thing here, as you point out, is that it's a nonprofit, a supporting organization or an integrated auxiliary that is the investment fund. The problem with that, and the weird thing about that is that, generally speaking, to be tax exempt, you have to primarily pursue some particular tax-exempt purpose. A church has religious purposes. That's one of the things that's listed in 501(c)3 as a permissible exempt purpose. My employer is a university. Education is another acceptable tax exempt purpose. There are a handful of others, but tax exempt purposes don't include investing. Like you said, to qualify as exempt, it has to do something different than just be an investment fund.
 
As a supporting organization or as an integrated auxiliary, the IRS has said that an organization like that can also be a tax-exempt purpose if it engages in a business. But it essentially gives money to a tax exempt organization to pursue its tax exempt mission.
 
It's created a standard that it calls the commensurate in scope standard, which is the amount that it gives to the tax-exempt organization to be commensurate in scope with its financial standing. The problem with that standard is the IRS has never really clarified what commensurate in scope means. They also haven't qualified who it applies to. But for the first part on what it means, I mean, we don't know if it means that this type of supporting organization needs to give 50% of its income, 20%, 10%, 5%, 70%. What we do know, or I guess we don't even know this, but it would make sense that 0% is not commensurate in scope. So if the organization has invested this money, has kept this money, has grown this money and has never given any of it back either to the Mormon Church or to any other charitable organization, that probably doesn't, I mean that probably ... I'm an attorney, I can never say anything definitely. But that probably doesn't meet the commensurate in scope requirement.
 
 
Of course the IRS is severely understaffed and it's only been 3 years since the whistleblower complaint. But I would hope the IRS looks at this seriously and that there would be some sort of public response. Maybe it simply won't look at it because they don't have the energy or the stomach to take on such a powerful organization.
 
 
33 minutes ago, Amulek said:

I'm not @JustAnAustralian, but I'm pretty sure he means this: If, rather than creating EPA to handle the church's investments, they simply continued to do all of that investing in-house under the organization of the Corporation of the President (just like they used to), would you still have a problem with that? Or, perhaps put another way, do you think all churches ought to pay taxes on their investments?

My understanding is that if they didn't structure their affairs the way they did, the legal argument made by Lars Nielsen and substantiated by Sam Brunson wouldn't be applicable. My moral misgivings about hoarding and financial opaqueness would remain. In general, if an organization takes in $7 billion in tithing, pays $6 billion in expenses, and takes in another $10 billion in investment income, it is more of a hedge fund than a church. I don't know why a society should give tax subsidies to such an organization.

33 minutes ago, Amulek said:

When you give money to a charity, they ought to be able to use that money to advance the charitable purpose for which they were organized.

Of course. But hoarding money isn't a charitable purpose.

33 minutes ago, Amulek said:

So, if you give money to your church and they don't need it this year - but they've got a really old HVAC system that they know could go out in the next year or two - they may decide to save some of that money for future use. So they put that money into an interest bearing vehicle for the time being in order to preserve the value of the money they have been given. Taxing that money after it accrues interest robs the church of being able to use the full value of the charitable donation. And that's one of the reasons why churches don't pay tax on investment income.

I have a deep understanding of the time-value of money. There is a huge, qualitative difference between a church saving some money for a couple of years to upgrade an old HVAC system and a church making most of its income from for-profit companies and from making sophisticated investments in the stock market, and then using most of its income to make further investments in for-profit companies and sophisticated investments in the stock market. At some point, it really does become primarily a hedge fund with a church attached and not a church saving for an updated HVAC system or saving for a rainy day.

33 minutes ago, Amulek said:

1 - Yes, the tax base includes income tax, and churches are excluded from that because they don't have any net income....

I said the income that individuals make is part of the tax base. Say I make $500,000 a year and am in the 35% tax bracket. If I join a church and start giving them 10% of my income, then poof! My taxable income goes down by $50,000 a year and the taxes I pay the federal government goes down by $17,500 a year. This loss in revenue by the government is a tax expenditure and represents the government subsidizing the church in the amount of $17,500 a year.

33 minutes ago, Amulek said:

If you want to complain about the IRS giving deductions to individual taxpayers for donating to churches you are welcome to do so, but it doesn't have anything to do with taxing churches. Also, please be advised that if you plan on changing the tax law to exclude individual deductions for churches and other religious non-profits, be prepared to treat all of those secular non-profits you like so much exactly the same. Is that what you want?

The government should be free to subsidize secular non-profits that provide real value to the community without somehow being required to subsidize religious organizations. 

33 minutes ago, Amulek said:

2 - I think you are confusing "tax base" with "tax revenue." Churches are exempt from income tax so they aren't part of the tax base to begin with. And it doesn't matter how much money they make because the government doesn't have a "money tax," it has an income tax.

Investment income is a tax base. For example, if I own a stock portfolio that generates $50,000 in dividends a quarter, I pay income taxes on that $50,000 of income. If the tax rate is 20%, then the government is relying on that $50,000 of quarterly for-profit income to generate $10,000 of tax revenue. If I then sell the stock to EPA then poof! The tax base is diminished. Stockholders still gets $50,000 of revenue in the form of dividends, but the government no longer gets that 20% cut. The more investment income is sold from the taxpaying public to churches, the less investment income is around to be taxed.

33 minutes ago, Amulek said:

And again, if you want to start taxing investment income on churches, be prepared to start taxing all other secular non-profits the same. Is that what you want? 

There isn't some law written in the fabric of the universe that secular non-profits and churches must receive identical tax treatment.

33 minutes ago, Amulek said:

3 - Not sure how this one got dragged into the discussion. Property tax is a state / local issue and doesn't have anything to do with the federal tax base at all.

But they are part of the local tax base. If I own some land in Salt Lake City, I pay property taxes on it. If the Church buys it and builds a Church on it, then poof! The city's tax revenue goes down. The city still needs to provide police and fire service for that parcel of land, but the landowner no longer contributes any taxes.

I don't think you understand what "tax base" means. Tax base is defined as:

The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates.

Individual income is part of the tax base. Property that is subject to property tax is part of the tax base. Investment income is part of the tax base. 

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1 hour ago, Calm said:

Then perhaps you should stop using as part of your argument claims that something is unconstitutional.

You are conflating two different issues. One issue is the legal precedence for something. Another issue is the underlying validity and quality of the legal arguments. Whether or not the Constitution itself really grants you the right to an abortion didn't change on June 24th, even though the Supreme Court changed its mind.

Edited by Analytics
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On 11/15/2022 at 9:12 AM, Analytics said:

Yes.

No, I asked for evidence that the First Presidency told the EPA what their money is to be used for.  We don't have that evidence.  You didn't supply that evidence.  Stop asserting things that don't exist.

On 11/15/2022 at 9:12 AM, Analytics said:

My personal suspicion

We can just stop the entire conversation because that's the entirety of your evidence.
 

Edited by helix
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4 hours ago, Analytics said:

Despite its claims to the contrary, Ensign Peak Advisors does not meet the qualifications of being a public charity, and thus can't be a supporting organization nor an integrated auxiliary.

Where do you get the idea that it doesn't meet the qualifications for being a public charity? According to the IRS, the following organizations are generally classified as public charities (link) - 

  • Are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges and universities,
  • Have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities,
  • Receive income from the conduct of activities in furtherance of the organization’s exempt purposes, or
  • Actively function in a supporting relationship to one or more existing public charities.

Ensign Peak advisors actively functions in a supporting relationship to an existing public charity: namely, the church. So, yes, legally speaking it is a public charity regardless of whether or not that matches up with your personal convictions about what ought to qualify as a public charity.

 

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I know the Church claims otherwise, but this is the heart of the dispute. In the words of Sam Brunson:

How about some additional words (emphasis added):

Quote

As a “supporting organization,” having the money going in but never going out is a problem.

There is this “commensurate in scope” test to be concerned about for a “supporting organization”.

If it is an “integrated auxiliary” though, it is a different story. Brunson wrote:

“There are no judicial or agency pronouncements I’m aware of applying the test to integrated auxiliaries. This is likely the first time this particular question has come up, at least to this degree. And, for what it is worth, under the Internal Revenue Code, integrated auxiliaries of churches are, like churches, treated differently from other tax-exempt organizations”

And, quite frankly, that is likely why the church ended up organizing it as both a Supporting Organization and an Integrated Auxiliary. It's sort of a liability failsafe in case the IRS ultimately ruled against them on one of those classifications. 

 
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Of course the IRS is severely understaffed and it's only been 3 years since the whistleblower complaint. But I would hope the IRS looks at this seriously and that there would be some sort of public response. Maybe it simply won't look at it because they don't have the energy or the stomach to take on such a powerful organization.

Or maybe they won't look at it because (1) it's not at all obvious that the church did anything wrong in the first place; and (2) even if the IRS did decide to pursue it there wouldn't be anything meaningful for them to collect. 

I do, however, really like your suggestion that the US Government won't bother with it because the Mormon church is just sooooo powerful. I mean, there's just something almost anti-Semitic about the sentiment that makes me feel like I'm definitely on the right side of the issue. 

 

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In general, if an organization takes in $7 billion in tithing, pays $6 billion in expenses, and takes in another $10 billion in investment income, it is more of a hedge fund than a church. I don't know why a society should give tax subsidies to such an organization.

So is there some sort of Platonic ideal you have in mind for how much of an endowment a church should be allowed to have before the government ought to be free to raid their coffers? 

 

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Of course. But hoarding money isn't a charitable purpose.

But the advancement of religion is.

 

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I said the income that individuals make is part of the tax base. Say I make $500,000 a year and am in the 35% tax bracket. If I join a church and start giving them 10% of my income, then poof! My taxable income goes down by $50,000 a year and the taxes I pay the federal government goes down by $17,500 a year. This loss in revenue by the government is a tax expenditure and represents the government subsidizing the church in the amount of $17,500 a year.

No, when the government grants you a tax break the government is subsidizing you - just like when the government gives you a tax break for buying a home, having children, etc. Your kids aren't receiving a subsidy: you are. 

 

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The government should be free to subsidize secular non-profits that provide real value to the community without somehow being required to subsidize religious organizations. 

Good luck amending the Constitution to comport with that view. 

 

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Investment income is a tax base.

No, investment income is part of a tax base. For individuals, yes; for for-profit corporations, yes; for churches, no.

I get that you don't like that, but that's how it is. I honestly don't know how else to put it.

 

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There isn't some law written in the fabric of the universe that secular non-profits and churches must receive identical tax treatment.

I understand that you would prefer to live in a country that discriminates against religions. Maybe a society like North Korea would be more to your liking?

 

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But they are part of the local tax base.

I know. But, as I said before, heretofore we have strictly been talking about the federal tax base. 

If you want to have a separate discussion about state and local taxes, we can certainly get into that as well, but it doesn't have anything to do with the federal tax base. 

 

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I don't think you understand what "tax base" means

Trust me, I'm perfectly aware of what "tax base" means. I am not exactly out of my depth here. 

You, on the other hand, seem to not fully grasp everything you are waxing authoritative about. Here's a perfect example from the (attempted) condescending part of the rest of your post:

 

Quote

Tax base is defined as:

The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates.

Individual income is part of the tax base. Property that is subject to property tax is part of the tax base. Investment income is part of the tax base. 

You keep saying "the" tax base in each of these sentences as though they are the same thing. Each of the subjects you mention here are, indeed, part of "a" tax base but not the same one.

Individual income is part of the federal tax base; and, depending on where you live, possibly part of the state tax base; and, in even fewer locals, possibly even part of the city/county/municipality tax base.

Property taxes, on the other hand, almost always within the purview of your local (read: city / county) government's tax base.

And I'm not really sure why you have investment income listed as a separate item. Which tax base it belongs to depends on who it is that's receiving the money, not on what kind of money it is. Because, as your own quote explains, "[t]he tax base is the total amount of...economic activity subject to taxation by a tax authority" (emphasis added). As such, it might be part of the federal, state, or local tax base; or it could even be all of the above; or, as in the case of churches, none of the above. 

 

Edited by Amulek
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9 hours ago, Amulek said:

Where do you get the idea that it doesn't meet the qualifications for being a public charity? According to the IRS, the following organizations are generally classified as public charities (link) - 

  • Are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges and universities,
  • Have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities,
  • Receive income from the conduct of activities in furtherance of the organization’s exempt purposes, or
  • Actively function in a supporting relationship to one or more existing public charities.

Ensign Peak advisors actively functions in a supporting relationship to an existing public charity: namely, the church. So, yes, legally speaking it is a public charity regardless of whether or not that matches up with your personal convictions about what ought to qualify as a public charity.

According to the whistleblower report, Ensign Peak advisors does not actively function in a supporting relationship to the Chruch because it never gives the Church any money. Repeating the Sam Brunson quote you ignored:

So if the organization has invested this money, has kept this money, has grown this money and has never given any of it back either to the Mormon Church or to any other charitable organization...that probably doesn't meet the commensurate in scope requirement.

9 hours ago, Amulek said:

So is there some sort of Platonic ideal you have in mind for how much of an endowment a church should be allowed to have before the government ought to be free to raid their coffers? 

That is the wrong question. The question you should ask "is there a bare minimum of principle and/or interest income a 501(c)(3) must donate to charitable purposes for it to correctly be considered a public charity rather than a private foundation?" 

In the context of a purported integrated auxiliary, The IRS's answer that question is the "commensurate in scope requirement." And the issue you assiduously avoid is whether EPA meets that requirement. 

9 hours ago, Amulek said:

Good luck amending the Constitution to comport with that view. 

Given the level of expertise on Constitutional law you've displayed here, I'll give your comments on this point all the consideration they deserve.

9 hours ago, Amulek said:

Trust me, I'm perfectly aware of what "tax base" means. I am not exactly out of my depth here.... 

Let's take a step back here. The reason we are talking about the definition of "tax base" is because we're talking about how the U.S. tax code subsidizes religion (and also about how the laws in Australia have removed at least some of those subsidies, and about how the Church claims it uses Australian tithing for different purposes than it uses tithing everywhere else in order to justify receiving that subsidy).

Some posters here deny the fact that tax subsidies are in fact a type of subsidy and are economically indistinguishable from direct cash subsidies. I think you concede that general point, but are using the semantics of the phrase "tax base" to argue that the tax subsidies churches receive aren't really tax subsidies because churches were never part of the tax base to begin with. If that's your point, I'll simply respond that that is special pleading and we can agree to disagree.

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22 minutes ago, Analytics said:

According to the whistleblower report, Ensign Peak advisors does not actively function in a supporting relationship to the Chruch because it never gives the Church any money. Repeating the Sam Brunson quote you ignored:

So if the organization has invested this money, has kept this money, has grown this money and has never given any of it back either to the Mormon Church or to any other charitable organization...that probably doesn't meet the commensurate in scope requirement.

I'm not ignoring anything other than the fact that you continue to harp on a point that is largely moot. The "commensurate in scope" requirement has (1) never been defined by the IRS and (2) only applies to Supporting Organizations, not to Integrated Auxiliaries. EPA is organized as both a Supporting Organization and an Integrated Auxiliary, so even if it fails to qualify as a Supporting Organization - due to its having never made a distribution to the Church or any other qualifying charity - it would still be considered a public charity due to the fact that it functions as an Integrated Auxiliary of a Church.

 

22 minutes ago, Analytics said:

That is the wrong question. The question you should ask "is there a bare minimum of principle and/or interest income a 501(c)(3) must donate to charitable purposes for it to correctly be considered a public charity rather than a private foundation?" 

In the context of a purported integrated auxiliary, The IRS's answer that question is the "commensurate in scope requirement." And the issue you assiduously avoid is whether EPA meets that requirement. 

This is getting tiresome, so I'm just going to CFR you on this.

Please provide a reference for your claim that the "commensurate in scope requirement" applies to nonprofit corporations which have been organized as an Integrated Auxiliary of a Church.

 

22 minutes ago, Analytics said:

Given the level of expertise on Constitutional law you've displayed here, I'll give your comments on this point all the consideration they deserve.

If you think my comments about what the Constitution prohibits government from doing with respect to churches is off base you are welcome to provide evidence or argument to the contrary. I think what you will find, however, is that what I've been saying is very much within the mainstream (if not the majority) view.

 

22 minutes ago, Analytics said:

The reason we are talking about the definition of "tax base" is because we're talking about how the U.S. tax code subsidizes religion (and also about how the laws in Australia have removed at least some of those subsidies, and about how the Church claims it uses Australian tithing for different purposes than it uses tithing everywhere else in order to justify receiving that subsidy).

Again, you appear to be confusing two separate things: (1) tax exemption for religious organizations and (2) tax exemptions for religionists.

Despite how economists might conceptualize the issue, the exemption of nonprofit organizations from federal income taxation is neither a special privilege nor a hidden subsidy. Rather, it reflects the application of established principles of income taxation to organizations which, unlike the typical business corporation, do not seek profit.

Are there exceptions to this rule? I would say yes. Such exceptions might arise, for example, when there are material benefits being transferred back to constituent members (and no, I'm not talking about the church here; I'm thinking specifically of exempt organizations like mutual benefit nonprofits). And there are other specific situations which I can think of where I believe the subsidy characterization makes sense when we are talking about tax exemption for nonprofits, but as a general rule I don't think that's normally going to be the case. And it's never the case when it comes to churches.

Now, with respect to (2), the status of the charitable contribution deduction as a subsidy is a totally separate issue. The ability for donors to to claim a charitable contribution deduction is a tax expenditure, so it is generally considered to constitute (and has consistently been treated as) a subsidy. But again, it's not a subsidy for religions - it's a subsidy for religionists. And I think it's dishonest to try and elide them together as though they were the same thing.

 

22 minutes ago, Analytics said:

Some posters here deny the fact that tax subsidies are in fact a type of subsidy and are economically indistinguishable from direct cash subsidies. I think you concede that general point, but are using the semantics of the phrase "tax base" to argue that the tax subsidies churches receive aren't really tax subsidies because churches were never part of the tax base to begin with. If that's your point, I'll simply respond that that is special pleading and we can agree to disagree.

As you like. For the record though, an argument isn't special pleading just because the person on the other end of the conversation doesn't have enough knowledge about the subject to recognize that what's being said is, in fact, justified.

 

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2 hours ago, Amulek said:

I'm not ignoring anything other than the fact that you continue to harp on a point that is largely moot. The "commensurate in scope" requirement has (1) never been defined by the IRS and (2) only applies to Supporting Organizations, not to Integrated Auxiliaries. EPA is organized as both a Supporting Organization and an Integrated Auxiliary, so even if it fails to qualify as a Supporting Organization - due to its having never made a distribution to the Church or any other qualifying charity - it would still be considered a public charity due to the fact that it functions as an Integrated Auxiliary of a Church.

This is getting tiresome, so I'm just going to CFR you on this.

Please provide a reference for your claim that the "commensurate in scope requirement" applies to nonprofit corporations which have been organized as an Integrated Auxiliary of a Church.

According to Loyola University Law Professor Sam Brunson, the commensurate in scope requirement applies both to Supporting Organizations and to Integrated Auxiliaries.

Please read the following link:

Loyola University Law Professor Sam Brunson On Transparency And Mormon Church (religionunplugged.com)

 

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1 hour ago, Analytics said:

According to Loyola University Law Professor Sam Brunson, the commensurate in scope requirement applies both to Supporting Organizations and to Integrated Auxiliaries.

Please read the following link:

Loyola University Law Professor Sam Brunson On Transparency And Mormon Church (religionunplugged.com) 

I've read the article; it doesn't say what you think it does. Here is the part I believe you are referring to (emphasis added):

Quote

Brunson: As a supporting organization or as an integrated auxiliary, the IRS has said that an organization like that can also be a tax-exempt purpose if it engages in a business. But it essentially gives money to a tax exempt organization to pursue its tax exempt mission.

Glader: Right.

Brunson: It's created a standard that it calls the commensurate in scope standard, which is the amount that it gives to the tax-exempt organization to be commensurate in scope with its financial standing. The problem with that standard is the IRS has never really clarified what commensurate in scope means. They also haven't qualified who it applies to. But for the first part on what it means, I mean, we don't know if it means that this type of supporting organization needs to give 50% of its income, 20%, 10%, 5%, 70%. What we do know, or I guess we don't even know this, but it would make sense that 0% is not commensurate in scope. So if the organization has invested this money, has kept this money, has grown this money and has never given any of it back either to the Mormon Church or to any other charitable organization, that probably doesn't, I mean that probably ... I'm an attorney, I can never say anything definitely. But that probably doesn't meet the commensurate in scope requirement.

He's talking about the commensurate in scope requirement in relation to it being a Supporting Organization. He isn't saying that it applies to Integrated Auxiliaries.  

But, hey, you don't have to take my word for it. See, here (emphasis added): 

Quote

I also heard from Professor Samuel Brunson. He wrote a piece for By Common Consent. He notes that there are two bases for Ensign’s exemption. As a “supporting organization,” having the money going in but never going out is a problem.

There is this “commensurate in scopetest to be concerned about for a supporting organization."

If it is an “integrated auxiliary” though, it is a different story. Brunson wrote:

There are no judicial or agency pronouncements I’m aware of applying the test to integrated auxiliaries. This is likely the first time this particular question has come up, at least to this degree. And, for what it is worth, under the Internal Revenue Code, integrated auxiliaries of churches are, like churches, treated differently from other tax-exempt organizations.

Hopefully, by color coding things for you this time it will help make it easier for you to understand what Professor Brunson is saying about the commensurate in scope test - namely, that it's a factor with respect to supporting organizations but not for integrated auxiliaries - a fact that you apparently weren't able to grasp when I provided this exact same quote previously.

 

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10 hours ago, Amulek said:

I've read the article; it doesn't say what you think it does.

Apparently, you didn't read the paragraphs leading up to what you highlighted ,and thus don't know what Brunson was referring to. In context:

The Mormon Church could just have as employees a handful of investment managers and do it in-house. If they did that, it would be from a tax perspective completely uncontroversial. Similarly, if they went to an ordinary for-profit investment advisor, hedge fund and invested the money there, again it would be uncontroversial. They could do that. They wouldn't have to get the money sent back to them. The weird thing here, as you point out, is that it's a nonprofit, a supporting organization or an integrated auxiliary that is the investment fund. The problem with that, and the weird thing about that is that, generally speaking, to be tax exempt, you have to primarily pursue some particular tax-exempt purpose. A church has religious purposes. That's one of the things that's listed in 501(c)3 as a permissible exempt purpose. My employer is a university. Education is another acceptable tax exempt purpose. There are a handful of others, but tax exempt purposes don't include investing. Like you said, to qualify as exempt, it has to do something different than just be an investment fund.

Glader: Right.

Brunson: As a supporting organization or as an integrated auxiliary, the IRS has said that an organization like that can also be a tax-exempt purpose if it engages in a business. But it essentially gives money to a tax exempt organization to pursue its tax exempt mission.

Glader: Right.

Brunson: It's created a standard that it calls the commensurate in scope standard...

A couple of points:

1- Whether EPA legally qualifies as an integrated auxiliary is in dispute. Although you think you know the answer to that, Brunson says he doesn't know and for my part, I personally doubt it. After all, only public charities can be integrated auxiliaries. 

2- Just because there haven't been any judicial or agency pronouncements on whether the commensurate in scope standard applies to integrated auxiliaries doesn't mean similar underlying principles don't apply. Brunson isn't contradicting himself here.

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I’m currently in LAX waiting for my connecting flight back to SLC from 3 weeks in Australia.  I’m good friends with both Simon Southerton,  the original whistle blower & Neville Rochow, Kings Barrister and the primary interviewee in the Australia 60 minutes story. In fact I had dinner with both of them just a week ago while in Sydney. While I know neither are popular here, both are good, decent, brilliant men.  

Background:

Only donated funds to humanitarian charities managed and directed within Australia qualify for tax deductibility. Because of this, tithing to any church used in the maintenance, salaries,  funds to build chapels etc is not considered charity nor tax deductible in Australia.

To resolve this problem the church set up several humanitarian charities and instructed members to make their tithing donations to these charities instead of paying their tithing as tithing. This allows members to claim a tax deduction on their tithing and avoided millions in taxes potentially due the Australian government 
 

The problem  

1. the law requires humanitarian funds be directed and allocated within Australia and none of the funds show any employees or directors. 

2. No other church in Australia is following this tax avoidance system for its members. it’s a PR disaster in OZ 

3. The history of donations went from a 15 year history of $35k in donations per year to now over $95 million per year due to this instruction  

3. estimated annual Australian tithing receipts are about $35- $50 million while $95 million is being funneled into the humanitarian charities  

4. while the legality of this program is yet to be determined and it might very well be found legal, on the surface it comes off as best a manipulation of and breaking the spirit of the law and worst as a money laundering and tax avoidance scheme to benefit tithe paying members 
 

Time will tell if it was all worth it  

https://www.smh.com.au/national/mormon-church-invests-billions-of-dollars-while-grossly-overstating-its-charitable-giving-20220927-p5blbc.html

 

Edited by Craig Speechly
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On 11/16/2022 at 3:54 PM, Analytics said:

According to Loyola University Law Professor Sam Brunson, the commensurate in scope requirement applies both to Supporting Organizations and to Integrated Auxiliaries.

Please read the following link:

Loyola University Law Professor Sam Brunson On Transparency And Mormon Church (religionunplugged.com)

 

He was a guest on the Radiowest podcast. I think he mentioned that everything the church did is legal, but not quite the spirit of the law, or he said the church needs to change the tithing requirement and be transparent like before the changes in the sixties (?). I would say the church needs to actually adhere to the beginnings of tithing being on increase. That's one way to help the situation. I understand why the church is funneling funds differently, they want to help out the members that can't deduct their tithing and give them another way. I would agree with Sam, the church needs to change tithing or at least put it the way it was intended or revealed to someone in the beginning. https://radiowest.kuer.org/show/radiowest/2022-11-17/the-moral-obligation-of-managing-lds-church-money

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4 hours ago, Tacenda said:

He was a guest on the Radiowest podcast. I think he mentioned that everything the church did is legal, but not quite the spirit of the law, or he said the church needs to change the tithing requirement and be transparent like before the changes in the sixties (?). I would say the church needs to actually adhere to the beginnings of tithing being on increase. That's one way to help the situation. I understand why the church is funneling funds differently, they want to help out the members that can't deduct their tithing and give them another way. I would agree with Sam, the church needs to change tithing or at least put it the way it was intended or revealed to someone in the beginning. https://radiowest.kuer.org/show/radiowest/2022-11-17/the-moral-obligation-of-managing-lds-church-money

Direct quotes would be nice. :) 

;) 

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7 hours ago, Craig Speechly said:

I’m good friends with both Simon Southerton,  the original whistle blower & Neville Rochow, Kings Barrister and the primary interviewee in the Australia 60 minutes story. In fact I had dinner with both of them just a week ago while in Sydney. While I know neither are popular here, both are good, decent, brilliant men.

@Craig Speechly, it's good that you've maintained friendships with Mssrs Southerton and Rochow, but as many posts on this thread demonstrate, including some directly after yours, many of their claims are false and/or misleading.

It's sad, but as Simon's participation on other forums over many years makes quite clear, his goal is to harm the Church. It would appear that Neville has joined that crusade.

Edited by Hamba Tuhan
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8 hours ago, Craig Speechly said:

The problem  

1. the law requires humanitarian funds be directed and allocated within Australia

"{D}irected  . . . within Australia," yes.  And as it turns out, that is precisely what is happening.

"{A}llocated within Australia" (meaning distributed only to humanitarian/philanthropic efforts within Australia, and not overseas at all), no.  See, e.g., here and here.

8 hours ago, Craig Speechly said:

and none of the funds show any employees or directors. 

I invite you to give this matter a little more thought and research.  You could start here.

8 hours ago, Craig Speechly said:

2. No other church in Australia is following this tax avoidance system for its members.

Well, this is apparently a fairly new system.  I suspect other charitable/religious organizations will catch on sooner or later.

But even if they don't, how is this a problem?

8 hours ago, Craig Speechly said:

it’s a PR disaster in OZ 

It is?  In what way?

8 hours ago, Craig Speechly said:

3. The history of donations went from a 15 year history of $35k in donations per year to now over $95 million per year due to this instruction  

Sorry, but I have no idea what you are saying here.

8 hours ago, Craig Speechly said:

3. estimated annual Australian tithing receipts are about $35- $50 million while $95 million is being funneled into the humanitarian charities  

What is the scandal here?

8 hours ago, Craig Speechly said:

4. while the legality of this program is yet to be determined and it might very well be found legal, on the surface it comes off as best a manipulation of and breaking the spirit of the law and worst as a money laundering and tax avoidance scheme to benefit tithe paying members 

Meh.

8 hours ago, Craig Speechly said:

The legality seems almost a distraction, does it not?  Better to focus on histrionics.

Thanks,

-Smac

Edited by smac97
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8 hours ago, JustAnAustralian said:

False. Our tithing goes into either the envelope handed to the bishopric, or to the tithing donation page on the church's website (which is just looks like an electronic version of the paper slip).

There is no manual selection of a specific charitable organisation involved. In fact we don't even have the ability to direct our church tithing to specific legal organisations.

 

It was out of the news cycle in less than a week. It was pretty much irrelevant PR wise.

So do you take a 100% tax write off of your tithing donation?
 

If not diverted tithing funds into the Humanitarian fund charity how do you account for the nearly 3000% increase in donations to the humanitarian fund?  From $35,000 to $95,000,000? You surely can’t be suggesting Australian Members pay a full tithe plus pay an additional 10-15% charitable donation on top of their tithing. 

Edited by Craig Speechly
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32 minutes ago, Craig Speechly said:

So do you take a 100% tax write off of your tithing donation?

Yes. But the church does not direct me to donate it to any specifically organised legally recognised organisation. The church is the one that determines which legal organisation's bank account the donations go in to. I have no say in that. My money either goes into the envelope as cash, or taken from my bank account if I use the church online donation system.

 

32 minutes ago, Craig Speechly said:

From $35,000 to $95,000,000? You surely can’t be suggesting Australian Members pay a full tithe plus pay an additional 10-15% charitable donation on top of their tithing. 

Again, the 35M number makes zero sense based on the number of self declared members and Australian incomes.

Do the maths yourself. Look at the 2021 Australian census for self declared numbers of church members. Pick a percentage of full tithe payers and work out how much that would mean each person pays. Then compare that to Australian incomes.

Edited by JustAnAustralian
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51 minutes ago, JustAnAustralian said:

Do the maths yourself. Look at the 2021 Australian census for self declared numbers of church members. Pick a percentage of full tithe payers and work out how much that would mean each person pays. Then compare that to Australian incomes.

In case it helps, here's my earlier post on this exact point:

Quote

Mr Rochow in his television interview:

Quote

The numbers that they're talking about could not possibly, on any view of the world, come from the Australian Saints. That level of donation is just not possible of the, say, 30-to-50,000 tithe payers that there are. And so, clearly, the money that is being claimed in that documentation is coming from the local church -- just is not coming from the local church [he clarifies] -- and so any tax deduction that is claimed on the basis that local Mormons are that generous has a big question mark over it, and the question mark attached to a question is: where did the money really come from? It cannot have come from Australian Latter-day Saints. It just cannot have done.

The documentation referred to is shown in the video a few seconds earlier and indicates donations of $93 million last financial year.

I'm starting to wonder if these people are functionally innumerate (or just blinded by their bitterness?). $93 million divided by an average of Mr Rochow's own '30-to-50,000 tithe payers' is $2,325 per tithe payer, suggesting an average income of only $23,250 per year. I agree that's not possible, especially since the median income in Australia is $41,860 per year!

In fact, assuming that all Aussie tithe payers earn a median wage and calculate tithing based on gross, it would require donations from only 22,217 of them to reach $93,000,000. ($4,186 x 22,217 = $93,000,362.)

This is painfully embarrassing for a man who apparently works as a barrister ...

And even more embarrassing for any 'journalist' who has taken these kinds of claims seriously! Seriously, just do the maths.

As well as an earlier post regarding impacts on revenue:

Quote

Deductions in Australia merely reduce taxable income. The ATO has a 'simple tax calculator' that deals only with income tax (and not the fixed Medicare levy). Median personal income in Australia is currently $805/week or $41,860/year. That allows us to do a real world example:

A Saint who earns $41,860/year, tithes on gross, and has no other deductions (including fast offerings, etc.) would have a taxable income of $37,674 under the current arrangement of 100 per cent deductibility, resulting in an estimated tax of $3,700.06. This is a total tax rate of 8.84 per cent.

In a scenario where only 75 per cent of tithing is deductible (as was the case for a few years before the Church fixed this), a Saint who earns $41,860/year, tithes on gross, and has no other deductions (including fast offerings, etc.) would have a taxable income of $38,721, resulting in an estimated tax of $3,898.99. This is a total tax rate of 9.31 per cent.

In other words, for a person on a median income, being able to deduct 100 per cent of tithing (vs just 75 per cent) reduces her/his income tax contribution by $198.93 per year, reducing the person's tax burden by 0.47 per cent of gross income.

Consequently, if every person in your $1 billion scenario earnt a median income, it would amount to 23,889 people, each paying $198.93 less per year. That's a total difference in government revenue of $4,752,239 per year. (Total government revenue with 100 per cent tithing deductible = $88,390,733. Total government revenue with 75 per cent tithing deductible = $93,142,972.) Over seven years, this would amount to $33,265,671 in 'lost' government revenue.

To put this into context, a government report states that 'average road project costs were around $5.1 million per lane kilometre in 2017'. This means that if tithing in Australia were to return to its 75 per cent deductibility (under your $100,000,000 in tithes scenario), the additional revenue would be enough to build 466 metres (1,529 feet) of a two-lane road each year.

Also, I just a did Google news search by date using 'Australia', 'Mormon', and 'tithing'. Literally nothing shows up in Australia after the weekend of the 60 Minutes broadcast. Mssrs Southerton and Rochow's 'PR disaster' is happening only in their only fevered imaginations.

Edited by Hamba Tuhan
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