After the SEC, the IRS. Make your predictions.

[Nofear]

So, after/with the brouhaha of the SEC filing, is this just a presage of things to come?

As per the site below it mos certainly is.
https://religionunplugged.com/news/2023/2/8/former-employee-of-ensign-peak-advisors-submits-document-to-senate-finance-committee

Predictions? Let us all make a stand. 😜


Nofear's prediction: The IRS will find something to fine the Church about, but it will be tantamount to a slap on the wrist on par with the SEC or less but that it will begin another frothy frenzy.

[Pyreaux]

Well, as a result of this settlement, I expect the IRS to do... nothing. They should be auditing the EPA regardless of this happening, as the cold bean counters they are, I wouldn't expect them to wait multiple years for the SEC to finally reach a settlement, which didn't require the church admit to any wrongdoing. If it somehow offset taxes owed, I'd think the EPA would settle that before the IRS needed to get involved. Why react now? Are they a political organization that obeys the mob or the news telling them how to do their job and when. Or do they wait to smell blood?

[blackstrap]

The IRS can find problems whether they exist or not. My neighbor, who has a large family ,was questioned about his garden because he must be selling off his produce for cash income. 

[pogi]

"New accusations" in the memo:

Quote

Foreign accounts: “EPA now admits having foreign accounts, after denying it under oath for 10+ years: Mr. Nielsen’s prior submissions demonstrated that EPA has falsely denied under oath each year since at least 2007 that EPA has long had foreign bank and investment accounts, estimated to exceed $9 billion — and thus EPA is liable for FBAR (Report of Foreign Bank and Financial Accounts) penalties of more than $2 billion. Now, EPA has finally admitted in a recently published Form 990-T filing in November 2020 (for 2019) that EPA does have foreign bank and investment accounts.” Nielsen’s document argues that EPA should be liable for more than $2 billion in penalties. 

Deceptive statements: Nielsen’s document states that EPA was deceptive in describing its assets to regulators even after the stories broke in 2019 and the firm came under national scrutiny. “EPA has always had billions in assets since its formation in 1997. The deception began in 2007 with the false statement of EPA’s having only ‘$1,000,000’ in assets,” says Nielsen’s document. “In the 2019 filing, EPA continued to withhold that required information from the IRS, and to repeat the annual, false and deceptive statement, ‘OVER 1,000,000.’“

Fraudulent SEC filings: Nielsen’s document says EPA disguised its massive investment business by making filings with the SEC of Form 13F in the names of various LLCs more than 260 times over 10+ years, rather than in EPA’s own name. “Upon learning of Mr. Nielsen’s IRS submission in December 2019, EPA abruptly began filing in its own name as required. EPA’s change in approach is an admission by conduct that its more than 260 fraudulent SEC filings were improper and were acts in furtherance of a Klein conspiracy to defraud the IRS, by concealing its massive securities investment business,” the document reads.

Tax avoidance: Nielsen’s document claims EPA has not disputed his original allegations that 1) EPA engaged in no “religious, charitable or … educational” activities in the entire relevant period, 1997-2019, and 2) “EPA’s only distributions over 22 years were for the for-profit operations of an insurance company and a luxury shopping mall. This was approximately $2 billion to fund classic ‘private’ interests.” 

Can it be verified that the EPA denied under oath that they had foreign accounts?

The "Fraudulent SEC fillings" accusations are outlined in the SEC order.  However, the church's explanation as to why the EPA began filing in its own name in 2019 is different than the account above.  The Nielsens may not have been aware of the SEC interactions going on with the church at the time.  Here is what the church states:

Quote

In June 2019, the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements.

Is there any way to verify when the EPA first started investigating the church?   Would it be normal for the EPA to express its specific concerns with the church about their fillings before completing the investigation, or did the church pre-emptively change their practices after finding out they were going to be investigated?   
 

Edited February 27, 2023 by pogi

[smac97]

From the whistleblower thing:

Quote

The new document alleges several new violations by EPA and its leaders.

• Foreign accounts: “EPA now admits having foreign accounts, after denying it under oath for 10+ years: Mr. Nielsen’s prior submissions demonstrated that EPA has falsely denied under oath each year since at least 2007 that EPA has long had foreign bank and investment accounts, estimated to exceed $9 billion — and thus EPA is liable for FBAR (Report of Foreign Bank and Financial Accounts) penalties of more than $2 billion. Now, EPA has finally admitted in a recently published Form 990-T filing in November 2020 (for 2019) that EPA does have foreign bank and investment accounts.” Nielsen’s document argues that EPA should be liable for more than $2 billion in penalties.

•  Deceptive statements: Nielsen’s document states that EPA was deceptive in describing its assets to regulators even after the stories broke in 2019 and the firm came under national scrutiny. “EPA has always had billions in assets since its formation in 1997. The deception began in 2007 with the false statement of EPA’s having only ‘$1,000,000’ in assets,” says Nielsen’s document. “In the 2019 filing, EPA continued to withhold that required information from the IRS, and to repeat the annual, false and deceptive statement, ‘OVER 1,000,000.’“

• Fraudulent SEC filings: Nielsen’s document says EPA disguised its massive investment business by making filings with the SEC of Form 13F in the names of various LLCs more than 260 times over 10+ years, rather than in EPA’s own name. “Upon learning of Mr. Nielsen’s IRS submission in December 2019, EPA abruptly began filing in its own name as required. EPA’s change in approach is an admission by conduct that its more than 260 fraudulent SEC filings were improper and were acts in furtherance of a Klein conspiracy to defraud the IRS, by concealing its massive securities investment business,” the document reads.

• Tax avoidance: Nielsen’s document claims EPA has not disputed his original allegations that 1) EPA engaged in no “religious, charitable or … educational” activities in the entire relevant period, 1997-2019, and 2) “EPA’s only distributions over 22 years were for the for-profit operations of an insurance company and a luxury shopping mall. This was approximately $2 billion to fund classic ‘private’ interests.”

I am curious as to how much of this really is "new."

Nielsen has been trying now for some years to get a whistleblower's payday.  Peter Reilly's December 2019 assessment published in Forbes on this story seems to be still be relevant.

We'll see, I suppose.

Thanks,

-Smac

[jkwilliams]

1 minute ago, smac97 said:

From the whistleblower thing:

I am curious as to how much of this really is "new."

Nielsen has been trying now for some years to get a whistleblower's payday.  Peter Reilly's December 2019 assessment published in Forbes on this story seems to be still be relevant.

We'll see, I suppose.

Thanks,

-Smac

It will be interesting. After all, Nielsen only gets a “whistleblower’s payday” if the allegations are true. 

[smac97]

8 minutes ago, pogi said:

"New accusations" in the memo:

Can it be verified that the EPA denied under oath that they had foreign accounts?

I think he has in mind Form 990-T.  

8 minutes ago, pogi said:

The "Fraudulent SEC fillings" accusations are outlined in the SEC order. 

Strange that the word "fraud" or "fraudulent" is entirely absent from the SEC Order.

8 minutes ago, pogi said:

However, the church's explanation as to why the EPA began filing in its own name in 2019 is different than the account above.  The Nielsens may not have been aware of the SEC interactions going on with the church at the time.  Here is what the church states:

Quote

In June 2019, the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements.

If June 2019 (the last month of Q2 of 2019) was when the SEC "first expressed concern," and assuming it took the Church and EPA a few weeks/months (perhaps most of Q3 2019) to tort out its "reporting approach," then the "single aggregated report" approach has been in place for 13 quarters, which I think would go from starting in Q4 2019 and going through Q4 2022, that is, "13 quarterly reports."

8 minutes ago, pogi said:

Is there any way to verify when the EPA first started investigating the church?   

I assume you mean "when the SEC first started investigating the Church."

8 minutes ago, pogi said:

Would it be normal for the EPA to express its specific concerns with the church about their fillings before completing the investigation, or did the church pre-emptively change their practices after finding out they were going to be investigated?

I think it would be odd for the Church to publicly lie about something as testable as when "the SEC first expressed concern."

Thanks,

-Smac

[smac97]

7 minutes ago, jkwilliams said:

It will be interesting. After all, Nielsen only gets a “whistleblower’s payday” if the allegations are true. 

And if the allegations are true, the Church and EPA will need to pay the piper.

I suspect, though, that this is a pretty big "if."

Thanks,

-Smac

[jkwilliams]

Just now, smac97 said:

And if the allegations are true, the Church and EPA will need to pay the piper.

I suspect, though, that this is a pretty big "if."

Thanks,

-Smac

Who knows? Honestly, it wouldn't surprise me if the church were squeaky clean in their finances or if the Nielsen allegations were true or anything in between. I've had too much experience with the institution to rule anything out. 

[ttribe]

I am still of the opinion that the IRS is extremely hesitant to take on large religious groups after their experience with Scientology. I don't know if there is any real appetite to put significant resources into a thorough investigation.

[pogi]

1 hour ago, smac97 said:

I think he has in mind Form 990-T.  

Is that something they do "under oath"?

It doesn't seem like a tough question to get right?  Do you have foreign accounts, or not?

1 hour ago, smac97 said:

I assume you mean "when the SEC first started investigating the Church."

Yes.

1 hour ago, smac97 said:

I think it would be odd for the Church to publicly lie about something as testable as when "the SEC first expressed concern."

That is not what I am suggesting.  I am wondering what "first expressed concern" means.   Was it a general statement that they would be conducting an investigation after whistleblower concerns with nothing specific mentioned?  Did they preemptively change their practices based of their own suspicions of what the SEC would find?  The SEC did not order them to change practices or state any specific violations at the time - just "concerns" (which may have been general and not specific).  The preemptive change seems to show a significant lack of confidence, as if they suspected that the SEC would conclude that what they were doing violated the code.   Funny thing, the CAD expressed concerns long before June 2019 and nothing changed after those internal audits and warnings. 

True "commitment to abide by the law" doesn't ignore "concerns" from internal audits and only respond to "concerns" by the SEC.  It seems that the commitment only applies when they know that they are being watched/investigated.  It's not a good look.

 

 

Edited February 27, 2023 by pogi

[Calm]

24 minutes ago, ttribe said:

I am still of the opinion that the IRS is extremely hesitant to take on large religious groups after their experience with Scientology. I don't know if there is any real appetite to put significant resources into a thorough investigation.

I agree.

I doubt the Senate Finance Committee will hold a hearing on a church as well, especially after the SEC found a relatively minor (legally speaking from the viewpoint of outsiders) violation.  They have limited resources, an apparently quite crowded schedule from what I could tell and I don’t see much PR benefit in it.

Did the SEC give any credit to Nielsen in their investigation?  I can’t remember and don’t want to take the time to refresh my memory.  Since he was not the one that drew attention to the clone LLCs, unless he did something else that caught the SEC’s attention, there is not a lot of motivation to spend time on Nielsen’s whistleblower account.

Edited February 27, 2023 by Calm

[pogi]

5 minutes ago, Calm said:

Did the SEC give any credit to Nielsen in their investigation?  I can’t remember and don’t want to take the time to refresh my memory.  Since he was not the one that drew attention to the clone LLCs, unless he did something else that caught the SEC’s attention, there is not a lot of motivation to spend time on Nielsen’s whistleblower account.

It did say this:

Quote

In May 2018, a public website reported that various entities that appeared to have
ties to the Church had filed Forms 13F revealing holdings of approximately $32 billion. The
website referenced evidence indicating that these entities’ domain names were all registered to an
entity tasked with overseeing and protecting the intellectual property of the Church, and that each
of the LLCs identified listed a Business Manager whose name matched that of a Church employee. 

I am assuming that is speaking about Nielsen going public with info. 

Their investigation started one year after that. 
 

[Rain]

2 hours ago, blackstrap said:

The IRS can find problems whether they exist or not. My neighbor, who has a large family ,was questioned about his garden because he must be selling off his produce for cash income. 

How did they even know he had a garden?    

[ttribe]

9 minutes ago, Calm said:

I agree.

I doubt the Senate Finance Committee will hold a hearing on a church as well, especially after the SEC found a relatively minor (legally speaking from the viewpoint of outsiders) violation.  They have limited resources, an apparently quite crowded schedule from what I could tell and I don’t see much PR benefit in it.

Did the SEC give any credit to Nielsen in their investigation?  I can’t remember and don’t want to take the time to refresh my memory.  Since he was not the one that drew attention to the clone LLCs, unless he did something else that caught the SEC’s attention, there is not a lot of motivation to spend time on Nielsen’s whistleblower account.

I think Mormonleaks was the principal impetus for the investigation, but I could be wrong. 

[The Nehor]

The IRS reviews single digit numbers of religious organizations each year. Odds are low they will jump on this.

Congress might bite but I doubt it. Congress gets lots of stuff sent to them and I doubt picking a fight with the Church would appeal to either party.

[pogi]

42 minutes ago, ttribe said:

I am still of the opinion that the IRS is extremely hesitant to take on large religious groups after their experience with Scientology. I don't know if there is any real appetite to put significant resources into a thorough investigation.

Of course this will be taken as proof that they did nothing illegal or fraudulent - because "there were no claims" etc., just like the settlement is being used.  But we all know that there are other reasons why the SEC might settle instead of charge them.  Same with the IRS.   

[Amulek]

I didn't pick one of the options above, but here's what I believe will come of this with respect to both the Senate Finance Committee and the IRS: Nothing! Absolutely Nothing!

Also, @Calm hunted this down and posted it in one of the other threads back when this was first published (so all I did was remember seeing it), but Sam Brunson did a live tweet about the tax stuff in this complaint that you can read all about here:

        https://twitter.com/smbrnsn/status/1623697204748713984

Spoiler alert: Doesn't sound like there's much 'there' there.

 

[Nofear]

41 minutes ago, Amulek said:

I didn't pick one of the options above, but here's what I believe will come of this with respect to both the Senate Finance Committee and the IRS: Nothing! Absolutely Nothing!

I should have indeed added that option. Sorry.

[blackstrap]

1 hour ago, Rain said:

How did they even know he had a garden?    

He ran his business from a building on his home property. They came by on another matter. 

[Tacenda]

I predict the SEC will hold back after partially reading over this article. https://gephardtdaily.com/local/utah-d-a-s-office-files-lawsuit-against-sec-days-after-commissions-announced-settlement-with-lds-church/?fbclid=IwAR21hRGqIIeijMtoE9Pq16sU-viIZmE2bBCk48hXf1Ra8te70rDyTWKuJzA

Edited February 28, 2023 by Tacenda

[Calm]

21 minutes ago, Tacenda said:

I predict the SEC will hold back after partially reading over this article. https://gephardtdaily.com/local/utah-d-a-s-office-files-lawsuit-against-sec-days-after-commissions-announced-settlement-with-lds-church/

Can you explain what you mean by hold back?  In regards to what?

Edited February 28, 2023 by Calm

[Tacenda]

1 minute ago, Calm said:

Can you explain what you mean by hold back?  In regards to what?

I'm embarrassed, I realize now it's not a prediction that the SEC might go after the church with more things, it's a prediction if the IRS will. So my comment makes no sense. Thanks for asking me to explain, that sure saves me from looking so clueless, which I was, lol. 

[The Nehor]

2 hours ago, Tacenda said:

I predict the SEC will hold back after partially reading over this article. https://gephardtdaily.com/local/utah-d-a-s-office-files-lawsuit-against-sec-days-after-commissions-announced-settlement-with-lds-church/?fbclid=IwAR21hRGqIIeijMtoE9Pq16sU-viIZmE2bBCk48hXf1Ra8te70rDyTWKuJzA

I am 99% sure this is unrelated to what is going on with the church. It is basically arguing that managed investment companies shouldn’t have to comply with a new rule on reporting a company’s proxy votes..

Somehow increased reporting on proxy voting is going to let all the “woke” political activists in the *checks notes* investment banking organizations (what?) use these new rules to advance environmental policies over their client’s financial interests in some way that is never adequately explained.

Edited February 28, 2023 by The Nehor

[Amulek]

19 hours ago, pogi said:

Is that something they do "under oath"?

This may seem pedantic but technically no, it isn't something that is done "under oath" - it's something that is affirmed under penalty of perjury.

You do the same thing whenever you file your own tax forms. Here's the language from the 2022 1040, "Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge."

You aren't "under oath" whenever you file your taxes with the IRS - though you do affirm under penalty of perjury that what you're filing is true, correct, and complete.

 

19 hours ago, pogi said:

It doesn't seem like a tough question to get right?  Do you have foreign accounts, or not?

But "Do you have a foreign account?" isn't the same as "Do you have a reportable foreign account?" And that's an important distinction.

Is it possible that EPA had reportable foreign financial accounts and lied about it in previous years? I mean, sure, anything is possible. But it's also possible that EPA only opened a reportable foreign account in 2019. You know, kind of like how people usually don't start filing "married filing jointly" until they are actually married.

Also, it's possible that the definition of "foreign financial account" has changed in the last 15 years. And, as Sam Brunson points out, "whether they failed to file FBARs depends not on whether they had foreign investments (they did!) but whether they exercised control over certain foreign financial accounts (I don't know!)"

And the complaint isn't much help with that. There's no actual evidence of wrongdoing presented in the complaint itself - it's all just inference and logical leaps. They want the government to go on a fishing trip and justify their accusations for them.

For multiple reasons, I don't think that will happen, so I predict that these complaints - insofar as they manage to stick around for a while - will end up being more of a Rorschach test for what people think about the Church than anything else.

 

Edited February 28, 2023 by Amulek