IRS "Whistleblower" David A. Nielsen to Appear on 60 Minutes

[smac97]

Tribune:

Quote

IRS whistleblower to break his silence on LDS Church finances, will speak on ‘60 Minutes’

Accuser will discuss “his role in a federal investigation,” CBS says, “and decision to come forward.”

I wonder if he has anything new to say, or if this is just him trying to stay relevant.

Quote

This Sunday’s edition of “60 Minutes” will lead off with a report about the finances of The Church of Jesus Christ of Latter-day Saints and will feature an on-camera interview with a former senior portfolio manager with faith’s investment wing who turned whistleblower.

David A. Nielsen — who filed a complaint in late 2019 with the IRS accusing the Utah-based faith of amassing a $100 billion reserve fund intended for, but never spent on, charity in potential violation of tax laws — has declined previous interview requests, including with The Salt Lake Tribune.

Breaking his public silence, Nielsen will speak with “60 Minutes” correspondent Sharyn Alfonsi on the newsmagazine show, which airs Sunday at 6 p.m. on CBS/Channel 2 and will also stream on Paramount+.

I likely won't watch the interview, but I will be interested in recaps and a transcript.

Quote

According to CBS, the report on the “$100 billion fortune built by the [church’s] secretive investment arm” — Salt Lake City-based Ensign Peak Advisors — will include Nielsen talking about his “allegation that instead of spending the money on good works, hundreds of millions were used to bail out businesses with church ties.”

"Instead of."

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Nielsen has alleged substantial sums went to commercial ventures, including the development of the City Creek Center shopping mall in downtown Salt Lake City and the rescue of Beneficial Life Insurance Co.

These are not "allegations."  These are established facts.  Nobody disputes that the Church spent money on the City Creek Center, or to bail out Beneficial Life.

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Latter-day Saint leaders rejected the accusations, stating in a news release at the time that the church “complies with all applicable law governing our donations, investments, taxes and reserves.” They also insisted that money for the commercial projects came from “earnings on invested reserve funds,” rather than the tithing donations themselves.

These too seem to be "facts" rather than allegations or unsubstantiated claims.

Quote

In the summer of 2021, Nielsen filed sworn testimony in former Utahn James Huntsman’s lawsuit, which accuses top Latter-day Saint leaders of fraud and seeks to recover millions in refunded tithing.

Notably, the Huntsman lawsuit was dismissed via "summary judgment," which is to say, based on the facts of the case (as opposed to dismissal via procedural grounds).  The federal judge found, among other things, that "no reasonable juror could conclude that Hinckley's statement was false" because "a reasonable juror could only conclude that {the Church} used 'the earnings of invested reserve funds' to fund the City Creek project - i.e., {the Church} did exactly what Hinckley said {the Church} would do."  The judge even specifically addressed Nielsen's claims and explained why his testimony did not preclude summary judgment.

Put another way, Huntsman lost on both the facts and the law.  Nielsen's sworn testimony did not have an impact.  This is significant in two respects.  First, Nielsen's declaration was the sole piece of evidence Huntsman's attorneys presented.  Second, the judge found that his testimony did not "create a genuine issue of material fact."  This is, frankly, a pretty low bar.  That Huntsman's lawsuit could not jump over it is, in my view, pretty significant.

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(Huntsman’s case is on appeal before the 9th U.S. Circuit Court of Appeals.)

I will be curious how the Ninth Circuit - the most frequently reversed federal appellate court in the United States - will treat this case.  If even the Ninth Circuit cannot resuscitate Huntsman's lawsuit, then...

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Earlier this year, Nielsen took his complaints to Congress, urging the Senate Finance Committee to investigate the faith’s financial practices and sharing what he said is “evidence of false statements, systematic accounting fraud” and violations of tax laws and other federal statutes. He asserted, among other things, that his former employer has dodged more than $20 billion in taxes as well as another $2 billion in fines.

The IRS has, to my knowledge, taken no action on his complaint.  And then his sworn statement in the Huntsman suit didn't have any impact at all (in fact, it may have actually bolstered the Church's arguments).  I suspect his effort to take it to Congress will not go anywhere.

The Church did pay a fine in relation to the SEC reporting requirements associated with EPA.  I'm not sure how much, if any, a role Nielsen had in that.

We already know Nielsen is in it for the money.  I wonder if that is all he is after.

Thanks,

-Smac 

[Calm]

So behind

 

Edited May 11, 2023 by Calm

[Hamilton Porter]

I'll watch it.

[The Nehor]

I had heard “60 Minutes” had gone downhill.

His role in a federal investigation? LOL!

[JustAnAustralian]

3 hours ago, The Nehor said:

His role in a federal investigation? LOL!

Someone had to hit the send button on the web form.

[Doug the Hutt]

Is the $100,000,000,000 hoard separate from the ~$34,000,000,000 that was hidden in the 13 shell companies or does the former contain the latter?

I haven't watched 60 Minutes since about 1994.  Maybe I'll watch.

 

Edited May 12, 2023 by Doug the Hutt

[bluebell]

9 hours ago, JustAnAustralian said:

Someone had to hit the send button on the web form.

Not all heroes wear capes. 

[Analytics]

10 minutes ago, Doug the Hutt said:

Is the $100,000,000,000 hoard separate from the ~$34,000,000,000 that was hidden in the 13 shell companies or does the former contain the latter?

I haven't watched 60 Minutes since about 1994.  Maybe I'll watch.

 

The $100,000,000,000 has probably grown to something over $130,000,000,000 by now. In any case, the $34,000,000,000 is the portion of the hoard that is in traded securities that need to be reported to the SEC. The rest of it doesn't need to be reported and can remain safely secret.

[Analytics]

15 hours ago, smac97 said:

We already know Nielsen is in it for the money. 

Keep in mind that the only way there is any money is if the IRS determines that Ensign Peak Advisors really isn't a public charity and really does have a tax bill due.

As a taxpayer, I have no problem with whistleblowers being compensated for bringing tax cheats to the attention of the IRS.

[CA Steve]

4 minutes ago, Analytics said:

Keep in mind that the only way there is any money is if the IRS determines that Ensign Peak Advisors really isn't a public charity and really does have a tax bill due.

As a taxpayer, I have no problem with whistleblowers being compensated for bringing tax cheats to the attention of the IRS.

It is more than a bit ironic that Nielsen is being criticized for being in it "for the money" in a whistleblower case dealing with investment funds. But, I suppose, when all else fails, attack the person with inuendo and aspersions.

[smac97]

3 hours ago, Analytics said:

Quote

We already know Nielsen is in it for the money. 

Keep in mind that the only way there is any money is if the IRS determines that Ensign Peak Advisors really isn't a public charity and really does have a tax bill due.

Yes.  "If" being the key word there.

David Nielsen filed his "whistleblower" complaint in late 2019, or about 3.5 years ago.  I acknowledge the generalized incompetence and bureaucratic bloat of the vast administrative and regulatory organs of the U.S. federal government, but the passage of 40+ months with no particularized action or announcement from the IRS might start being an indication that Mr. Nielsen's complaint isn't going to go far.  That he took his show on the road to Congress might also be evidence that he does not expect the IRS to do anything with his complaint.

And now he's going on 60 Minutes to peddle his argument.  His complaint is taking on a certain "circling the drain" aura.

2019 Forbes Article (Peter J Reilly): $100 Billion In Mormon Till Does Not Merit IRS Attention:

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I don’t think David Nielsen will be able to retire on the reward from this case. That’s because there is not much of a case. The argument is that a private foundation is supposed to distribute 5% of its assets. Ensign is not a private foundation. It is an integrated auxiliary of a church. And there is nothing in the tax law that prevents churches from accumulating wealth.
...

Paul Streckfus of the EO Tax Journal agrees that this matter does not merit IRS attention.

“The IRS does not attempt to question the beliefs or purposes of churches unless extreme (law violations, for example). In the case of the Mormon Church, if they honestly believe they should be saving for the `second coming of Christ,’ why should the IRS question that? Just because there is $100 billion involved? If so, how much is too much? While church leaders have not been forthcoming about this pot of gold, church members can always withdraw their support if they object to this extreme saving or seek to remove the leadership.”
...
Professor Edward Zelinsky, author of Taxing The Church wrote me that taxing church endowments would not risk the entanglement issues that other forms of taxation might create. He agrees with me that there do not seem to be any current laws being violated.

2019 Salt Lake Tribune Op-Ed: LDS Church fund unlikely to face IRS backlash, experts say

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The Mormon world was rocked Monday when news broke that a whistleblower had accused The Church of Jesus Christ of Latter-day Saints of misleading members regarding more than $100 billion retained in accounts accumulated from tithing.

But despite ample hand-wringing, legal experts are skeptical the news will trigger a backlash from the IRS, and they note that the LDS Church’s tradition of aggressive saving dates back decades.
...
Philip Hackney, a law professor at the University of Pittsburgh and a former IRS official, said the report may evoke debate over whether religious groups should be allowed to retain massive endowments without disclosing them.

However, even if the IRS came down on the group, Brunson downplayed the potential repercussions of the complaint. He said Ensign Peak Advisors likely accrued most of its money in time periods that fall beyond the statute of limitations for such cases, limiting the impact were it to be stripped of its tax-exempt status.

"Even if there is something there, there's not a lot of revenue for potentially a lot of work," he said. "This probably isn't something that's going to be on their plate."

 2023 Blog Post by Sam Brunson: The Church, the Investment Advisor, and the SEC

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I’ve spent a lot of time explaining why the Sturm und Drang over the EPA’s taxes is overblown. And I stand by that. With what has been brought to light by the whistleblower and by other investigators, EPA and the church are perfectly compliant with federal tax law.

Brunson goes on to argue that the Church violates federal securities laws.  We've been over that a lot, so I won't rehash it here.  But Nielsen's complaint was to the IRS, and was about compliance with tax laws.  Regulation of securities laws being the province of the SEC, and the SEC having done its thing, and the IRS having gone 40+ months without doing anything in response to Nielsen's complaint, and various experts seeming to have reached a consensus that the Church is unlikely to run into IRS issues, your "if the IRS determines that Ensign Peak Advisors really isn't a public charity" hypothetical is becoming less and less likely to come to pass.

3 hours ago, Analytics said:

As a taxpayer, I have no problem with whistleblowers being compensated for bringing tax cheats to the attention of the IRS.

Oh, same here.  I have repeatedly noted that I have no objection to the Church being subject to the laws of the land, including taking its legal lumps if and when it errs or does something wrong (see, e.g., here, here, here, here, here).  I do so again here.

But I think we're not having this discussion in our capacity as taxpayers.

Thanks,

-Smac

Edited May 12, 2023 by smac97

[Teancum]

17 hours ago, smac97 said:

The IRS has, to my knowledge, taken no action on his complaint.  And then his sworn statement in the Huntsman suit didn't have any impact at all (in fact, it may have actually bolstered the Church's arguments).  I suspect his effort to take it to Congress will not go anywhere.

I would be curious to know what specific tax law Nielsen thinks were violated. I have muddles this around in my mind and based on what I know and the Church, EPA, and the rules tax rules for tax exempt entities I cannot see that they violated any tax law.

 

17 hours ago, smac97 said:

The Church did pay a fine in relation to the SEC reporting requirements associated with EPA.  I'm not sure how much, if any, a role Nielsen had in that.

A very small penalty considering....

17 hours ago, smac97 said:

We already know Nielsen is in it for the money.  I wonder if that is all he is after.

 I think most whstle blowers are motivated in part by money and in part by wanting to see the organization they are blowing in held accountable.

[Teancum]

1 hour ago, smac97 said:

Brunson goes on to argue that the Church violates federal securities laws.  We've been over that a lot, so I won't rehash it here.  But Nielsen's complaint was to the IRS, and was about compliance with tax laws.  Regulation of tax laws being the province of the SEC, and the SEC having done its thing, and the IRS having gone 40+ months without doing anything in response to Nielsen's complaint, and various experts seeming to have reached a consensus that the Church is unlikely to run into IRS issues, your "if the IRS determines that Ensign Peak Advisors really isn't a public charity" hypothetical is becoming less and less likely to come to pass.

Just and FYI the SEC has nothing to do with tax law.  As you know the actual tax law comes from congress. Then the Treasure Department, of which IRS is part of, issues regulations that interpreted the law as well as Revenue Rulings, Revenue Procedures, Private Letter Rulings and Tax Notices.

[smac97]

1 hour ago, Teancum said:

Quote

Brunson goes on to argue that the Church violates federal securities laws.  We've been over that a lot, so I won't rehash it here.  But Nielsen's complaint was to the IRS, and was about compliance with tax laws.  Regulation of tax laws being the province of the SEC, and the SEC having done its thing, and the IRS having gone 40+ months without doing anything in response to Nielsen's complaint, and various experts seeming to have reached a consensus that the Church is unlikely to run into IRS issues, your "if the IRS determines that Ensign Peak Advisors really isn't a public charity" hypothetical is becoming less and less likely to come to pass.

Just and FYI the SEC has nothing to do with tax law. 

You are quite correct.  I intended to say that "securities laws" are "the province of the SEC."  I have edited the post accordingly.

1 hour ago, Teancum said:

As you know the actual tax law comes from congress.

The regulation/administration of it has been, in the main, delegated to the IRS (the same goes for Congress delegating administration/regulation of securities laws to the SEC).

Thanks,

-Smac

[Teancum]

2 hours ago, smac97 said:

You are quite correct.  I intended to say that "securities laws" are "the province of the SEC."  I have edited the post accordingly.

The regulation/administration of it has been, in the main, delegated to the IRS (the same goes for Congress delegating administration/regulation of securities laws to the SEC).

Thanks,

-Smac

Yes.  Congress passes the tax law which goes into the Internal Revenue Code.  The law is drafted by the Joint Committee on Taxation which is an arm of congress. Then from there the rest is delegated to IRS. Same with SEC rules as you note.

[provoman]

It is difficult for me to think there is sincerity in his complaint!; that is, I question whether he really cares about alleged tax violations, but cares more about 'being the one that destroyed the LDS Church'.

 

[provoman]

On 5/12/2023 at 8:48 AM, Analytics said:

Keep in mind that the only way there is any money is if the IRS determines that Ensign Peak Advisors really isn't a public charity and really does have a tax bill due.

As a taxpayer, I have no problem with whistleblowers being compensated for bringing tax cheats to the attention of the IRS.

Jokes on the US tax payer; the IRS is a willing accomplice in billions dollar tax scam.

https://www.statesman.com/story/news/2013/06/30/austin-irs-whistle-blower-draws-attention-to-multibillion-dollar-fraud/10056138007/

https://www.oversight.gov/sites/default/files/oig-reports/202040064fr.pdf

 

I worked in the Austin Office, the Director of the ITIN program in 2008 told us to use our own pens to change ITIN forms so they could be approved.

I reported to my Supervisor, that two brothers were claiming the same 10 children as dependents. My Supervisor, and the Deputy Director told me "that is none of your business".

I also was given a negative employee appraisal because I denied an ITIN application because the applicant did not qualify based on their response on the ITIN form. When asked about rejecting the application I said "they selected x response, and the tax law section on the back of the form clearly indicates the person does not qualify. I was told "we [the IRS] do not enforce that tax law".

Edited May 14, 2023 by provoman

[mbh26]

21 hours ago, provoman said:

Jokes on the US tax payer; the IRS is a willing accomplice in billions dollar tax scam.

https://www.statesman.com/story/news/2013/06/30/austin-irs-whistle-blower-draws-attention-to-multibillion-dollar-fraud/10056138007/

https://www.oversight.gov/sites/default/files/oig-reports/202040064fr.pdf

 

I worked in the Austin Office, the Director of the ITIN program in 2008 told us to use our own pens to change ITIN forms so they could be approved.

I reported to my Supervisor, that two brothers were claiming the same 10 children as dependents. My Supervisor, and the Deputy Director told me "that is none of your business".

I also was given a negative employee appraisal because I denied an ITIN application because the applicant did not qualify based on their response on the ITIN form. When asked about rejecting the application I said "they selected x response, and the tax law section on the back of the form clearly indicates the person does not qualify. I was told "we [the IRS] do not enforce that tax law".

Do you mean tax laws are selectively enforced in a partisan political manner?  Who could have ever predicted that might happen?

[JustAnAustralian]

Well it looks like it's been and gone. Based on my reading of the Salt Lake Tribune article on it, there is nothing new, and like most of us thought, it's just him trying to have another crack.

[Calm]

https://www.cbsnews.com/news/whistleblower-david-nielsen-speaks-out-after-reporting-mormon-church-to-irs-in-2019-60-minutes-2023-05-14/
 

Quote

When asked if the confidential nature of this fund could erode trust between the church and its members, Waddell said "no." He believes that total resources at Ensign Peak don't need to be disclosed, and that whistleblower Nielsen didn't have a full grasp on the situation.

"We do announce missionary work. We do share what we're doing with humanitarian work. I think part of the lack of trust or lack of confidence comes from statements or comments from a whistleblower who doesn't have all the information, who doesn't understand…" 

Here’s an article that covers more of the content:

https://www.cbsnews.com/news/whistleblower-david-nielsen-speaks-out-after-reporting-mormon-church-to-irs-in-2019-60-minutes-2023-05-14/

This is the only new info to me.

Quote

The status of the IRS investigation into the Mormon church and Ensign Peak isn't clear. The IRS does not comment on whistleblower complaints, which can take an average of 11 years to be resolved.

I wonder about the average number of years for those that are resolved with a penalty as opposed to those that end up being dismissed.  Are they more likely to dismiss sooner or are the ones that don’t seem likely to be violations get pushed to the back burners.

Edited May 15, 2023 by Calm

[Calm]

Quote

That process may take up to 10 years or more to complete. The IRS notifies whistleblowers when a case for which they provided information has been referred for audit or examination. In addition, the IRS notifies them when the taxpayer they identified makes a payment which is attributable to information they supplied.

If they haven’t notified Nielsen yet, it would appear they are not yet examining it or even considering examining it, but it also hasn’t been closed

https://www.irs.gov/about-irs/the-irs-whistleblower-office

more info here

https://www.irs.gov/pub/irs-pdf/p5251.pdf

According to this (look at the very end for the timeline), it being 3 years and they haven’t contacted him is an unusual case.  I wonder if he chose to go on 60 Minutes to put pressure on them to do something.

 

Edited May 15, 2023 by Calm

[provoman]

1 hour ago, mbh26 said:

Do you mean tax laws are selectively enforced in a partisan political manner?  Who could have ever predicted that might happen?

I think it was more, the Austin Office was /is the only IRS Office that processes ITINs. Hundreds of employees, that are seasonal. My guess is that someones bonus was contingent on how soon the seasonal employees could be sent home for the season.

[Kenngo1969]

I haven't seen this posted yet.  If I missed it, apologies for any duplication.  Just chalk it up to "great minds thinking alike"!  

https://www.deseret.com/faith/2023/5/14/23649253/cbs-60-minutes-mormon-lds-church-finance-story-what-it-missed

[Calm]

5 hours ago, Kenngo1969 said:

I haven't seen this posted yet.  If I missed it, apologies for any duplication.  Just chalk it up to "great minds thinking alike"!  

https://www.deseret.com/faith/2023/5/14/23649253/cbs-60-minutes-mormon-lds-church-finance-story-what-it-missed

Good find, Ken.

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If the church did have $150 billion, a figure the church did not confirm during the “60 Minutes” interview, then the $6 billion it is said to spend annually on its mission would represent 4% in annual charitable spending, above what a retired IRS executive told “60 Minutes” would be necessary for a non-church 501c3 to maintain its non-profit status. Unlike other charitable 501c3 entities, churches are not required by the IRS to make minimum disbursements. 

The church provides more than $1 billion in charitable contributions to an extensive multi-campus worldwide educational system (including its flagship university, BYU) and another $1 billion a year in humanitarian offerings. Meanwhile, it funds 30,000 congregations, a global missionary effort, as well as thousands of meetinghouses, hundreds of temples and extensive free genealogical services — all part of the church’s religious mission to invite people to follow Jesus Christ.

Quote

And the unprecedented reserve funds that are a first in the church’s history could shape its increasingly global growth trajectory. Oman proposed that the church’s compilation of assets may be increasingly important during a time when most of its membership expansion is centered in Africa and Latin America.

“The per capita wealth of Latter-day Saints today is likely higher than the per capita wealth of Latter-day Saints in the future,” he said. “What savings does is move money from the high per-capita wealth of Latter-day Saints now and transfers it to the lower per-capita wealth of future Latter-day Saints.”

 

Edited May 15, 2023 by Calm

[Calm]

Quote

The Church of Jesus Christ filled community needs, then over time donated or sold off assets when it no longer made sense for the church or the need could be met by others, historians say. In some cases, keeping businesses would have benefited the church’s bottom line. For example:

• In the 1930s, as public education disrupted church schools, the Latter-day Saints gave to Utah and Arizona what today are Weber State University, Utah Tech University, Snow College and Eastern Arizona College.
• The church’s three banks merged in 1957, but in 1960, it got out of the banking business, too, selling its controlling interest in Zions Bank for $9.8 million. In 2021, Zions reported a net income of $1.1 billion.
• In 1975, it donated its 15 “vigorous and financially viable” hospitals to a nonprofit organization because they were not “central to the mission of the church.” Intermountain Healthcare since has expanded to 33 hospitals in seven states with $13.9 billion in total revenue last year.

What remains central to the mission of the church is welfare and humanitarian aid, education, missionary work, genealogical work, meetinghouses, and temples for weekly worship and religious ordinances.