I’ve been vindicated, church caught with hands in cookie jar

[Craig Speechly]

15 minutes ago, Calm said:

Where has the Church avoided paying taxes?

are you up to date on what is taking place in Canada and Australia?

15 minutes ago, Calm said:

In Australia, it has helped members avoid paying taxes.  This may have a minor effect of members paying the Church more in fast offerings or other donations then they would have, perhaps the extra money in their pocket gets sent to the Church somehow, but since tithing is a fixed amount of 10%, doesn’t seem like it would increase that at least beyond the full tithe payer amount.

the scheme was designed to allow member to avoid taxes. So yes taxes were not paid that otherwise would have been due. Estimated at somewhere north of $20 million Aus

15 minutes ago, Calm said:

In the US, with the SEC complaint, while the shell companies hid ownership, they didn’t change the tax amount.

did you read the SEC complaint?  The church admitted guilt

15 minutes ago, Calm said:

And my understanding of the incorrect amount of church assets listed on the IRS form (909?) did not change taxes at all, it was again not providing info on assets only.

churches do not pay taxes in USA 

15 minutes ago, Calm said:

The assumption the Church would only change their methods based on legality reminds me of an anecdote I heard eons ago where originally the Church purchased high end cars for the Church car fleet due to maintenance costs being so much lower for them, in the long run it was cheaper to buy those more expensive cars than less expensive ones.  However, they changed to buying less expensive upfront, but more expensive long term due to the blowback they got from people seeing the expensive cars driving around Salt Lake City.  Sometimes going with optics rather than a more prudent financial decision is necessary for a highly visible organization that does depend on in part the good will of the public.

Really it all comes to the church being forced to abandon an illegal tax avoidance scheme 

Edited July 14, 2023 by Craig Speechly

[webbles]

1 minute ago, Craig Speechly said:

did you read the SEC complaint?  The church admitted guilt

The complaint was about hiding ownership.  It had absolutely nothing to do with taxes.

[Craig Speechly]

5 minutes ago, webbles said:

The only thing we know is that the amount of money going into one of the church's organizations has gone down.  But the end goal for all of that was to allow Australian members to deduct tithing.  Has that been changed?  Are Australian members now paying taxes on their tithing?  If they are, then yes, the church has abandoned it.  If they aren't, then they haven't abandoned it.  They just changed tactics.
 

None of the articles you linked to give any indication on whether this change in money has an affect on Australian members.  I'd rather see that and then we can say whether it worked or not.

It’s true that this is a developing story. Can you give another explanation for why the church would abandon the scheme if it was deemed legal?

[Craig Speechly]

10 minutes ago, webbles said:

The complaint was about hiding ownership.  It had absolutely nothing to do with taxes.

The complaint was about none compliance with the law thus the fine. The church admitted guilt. 

[webbles]

3 minutes ago, Craig Speechly said:

It’s true that this is a developing story. Can you give another explanation for why the church would abandon the scheme if it was deemed legal?

I don't see them abandoning a scheme yet.  In your previous thread, I pointed out a bunch of different church owned organizations in Australia and how they all seem to share money between them.  It is very possible that this organization just didn't need the extra money or that another organization needed more.

If Australian members do start paying taxes because of this change, then yes, I will agree with you that the church had a scheme and abandoned it.  But at this point, I don't think we can say anything except that an organization is receiving less money.

I'd love to be notified when the tax details are figured out.  How do Australian members know if they can deduct all or part of their tithing?  Is it announced by the church?  Or some other organization?  Or does the government figure it all out when it sends the tax bill?

[webbles]

3 minutes ago, Craig Speechly said:

The complaint was about none compliance with the law thus the fine. The church admitted guilt. 

I think I might have misread your statement:

Quote

Am I the only one that sees a pattern of the church using shell companies to skirt the law and avoid paying taxes

You are saying that the church uses shell companies to skirt the law or avoid paying taxes or do both at the same time.  I originally read you to say that the church was doing both at the same time.  With the SEC complaint, it was only about skirting the law, not taxes.

[Craig Speechly]

6 minutes ago, webbles said:

I don't see them abandoning a scheme yet.  In your previous thread, I pointed out a bunch of different church owned organizations in Australia and how they all seem to share money between them.  It is very possible that this organization just didn't need the extra money or that another organization needed more.

If Australian members do start paying taxes because of this change, then yes, I will agree with you that the church had a scheme and abandoned it.  But at this point, I don't think we can say anything except that an organization is receiving less money.

time will tell. 

6 minutes ago, webbles said:

I'd love to be notified when the tax details are figured out.  How do Australian members know if they can deduct all or part of their tithing?  Is it announced by the church?  Or some other organization?  Or does the government figure it all out when it sends the tax bill?

Tithing donations are non deductible. Donations to a humanitarian charity are fully deductible IF it benefits Australia. The church devised a scheme to make it appear on paper that the tithes were meeting this standard. They were in fact not. I suspect back taxes and penalties will be forthcoming 

[bluebell]

19 minutes ago, Craig Speechly said:

The complaint was about none compliance with the law thus the fine. The church admitted guilt. 

For accuracy's sake, the church did not admit guilt.  As a part of paying the fine they neither admitted nor denied any guilt.  That's why the SEC refers to allegations of wrongdoing in their findings.

[webbles]

5 minutes ago, Craig Speechly said:

time will tell. 

Tithing donations are non deductible. Donations to a humanitarian charity are fully deductible IF it benefits Australia. The church devised a scheme to make it appear on paper that the tithes were meeting this standard. They were in fact not. I suspect back taxes and penalties will be forthcoming 

Any idea how Australian members will know this?  For example, in the US, when I fill out taxes, I just put my tithing amount in the deduction section.  The IRS may decide to audit me and if they do, I then show the report from the church with how much I donated.  Do the Australian members receive a document from the church that says X% of the donations is deductible?  How will we know that it actually was a scheme?

I doubt the church will get back taxes.  Something similar happened in the US when it was decided that payments for missionaries wasn't a tax deductible.  Any member who was audited at that time would have back taxes because they had misreported their deductions.  The church didn't pay any penalty or back taxes.  The church, though, did create a "scheme" to allow members to continue to deduct missionary payments shortly afterwards.  And that has been going on for several decades.  Maybe one day the IRS will decide it is illegal and all the US members will have to go through the headache of paying back taxes.

[Craig Speechly]

1 minute ago, webbles said:

Any idea how Australian members will know this?  For example, in the US, when I fill out taxes, I just put my tithing amount in the deduction section.  The IRS may decide to audit me and if they do, I then show the report from the church with how much I donated.  Do the Australian members receive a document from the church that says X% of the donations is deductible?  How will we know that it actually was a scheme?

good questions. I’ll ask my sources and try to get back. 

1 minute ago, webbles said:

I doubt the church will get back taxes.  Something similar happened in the US when it was decided that payments for missionaries wasn't a tax deductible.  Any member who was audited at that time would have back taxes because they had misreported their deductions.  The church didn't pay any penalty or back taxes.  The church, though, did create a "scheme" to allow members to continue to deduct missionary payments shortly afterwards.  And that has been going on for several decades.  Maybe one day the IRS will decide it is illegal and all the US members will have to go through the headache of paying back taxes.

USTax law is more favorable to religions than in Australia. Any donations made to a church is deductible in USA so making this particular bookkeeping change was a brilliant tax move by the church and has truly benefited US members 

[LoudmouthMormon]

2 hours ago, Calm said:

If you are using government provided services a lot, then I see no reason why you shouldn’t be willing to pay taxes, especially if it doesn’t create hardship for you.

I reject, completely and totally, the notion that people should be willing to pay any and all taxes, as long as it "doesn't create a hardship".   

As an American citizen living in the 2020's, I have unwanted government services/aid forced on me, whether I want it or not.  The notion that I should be tickled pink to fork money over for stuff I don't want or need, frankly repulses me.  And not just a little.

Imma need another forehead.  Any volunteers for my 2nd rant?

 

(Full transparency: With the recent "Cal's gal pals" bruh-ha-ha, I just wanted to say that I like @Calm.  I appreciate being able to debate with folks with whom I disagree.  I trust all the energy and zeal folks see in my recent posts are seen for what it is - directed at ideas, not individuals.  Regardless of forehead size.)

Edited July 14, 2023 by LoudmouthMormon

[ksfisher]

41 minutes ago, Craig Speechly said:

Donations to a humanitarian charity are fully deductible IF it benefits Australia.

This is interesting.  So Australians who donate to the Red Cross, for say, the purpose of famine relief in Africa, can't fully deduct the donation?  What percentage is deductible? 

Are fast offering donations fully deductible? 

Edited July 14, 2023 by ksfisher

[webbles]

48 minutes ago, Craig Speechly said:

good questions. I’ll ask my sources and try to get back. 

USTax law is more favorable to religions than in Australia. Any donations made to a church is deductible in USA so making this particular bookkeeping change was a brilliant tax move by the church and has truly benefited US members 

I found that donating to an organization that is a Deductible Gift Recipient (DGR) allows you to deduct the donation.  Australian members donate to the "L.D.S. Charitable Trust Fund" and per the ABR, it is still a DGR.  See https://www.abr.business.gov.au/ABN/View/60964279191 and scroll down to the section "Deductible gift recipient status".  It has been that way since 2000.  So for now, tithing is 100% deductible.  We'll have to see if the DGR status of "L.D.S. Charitable Trust Fund" changes or if the church changes where tithing goes to.

[Calm]

3 hours ago, Craig Speechly said:

are you up to date on what is taking place in Canada and Australia?

I have just studied incidents mentioned here and comments sent into FAIR, which is less than what’s been talked about here.  Feel free to elaborate or provide links to let me know what you are talking about.

If you mean church donations in Canada are sent to the US as contributions to BYU, it is just centralizing donations and not using the donations in ways that are inconsistent with other donations to foreign universities attended by Canadian students.  It is up to the Canadian government to determine what that percentage should be, they have never dinged BYU for having too low while they have dinged other schools, dropped them from their approved list.

3 hours ago, webbles said:

I think I might have misread your statement:

You are saying that the church uses shell companies to skirt the law or avoid paying taxes or do both at the same time.  I originally read you to say that the church was doing both at the same time.  With the SEC complaint, it was only about skirting the law, not taxes.

Good point, I read that the same.

Skirting the law on its own….means to avoid the laws without breaking them.  I don’t actually disagree with that statement in that they were using a maneuver that they thought was legal to avoid showing church ownership.  Plus they used the foreign education Canadian charity law to more or less centralize Canadian donations and the Canadian government doesn’t allow religious donations to leave the country.  Canadian tithing dollars therefore are used to subsidize an American university so that more American tithing dollars can subsidize international church needs, such as building chapels, while Canadian donations end up subsidizing both American and other students as well as Canadian, but that is okay by the Canadian government and it is consistent with quite few other universities I looked at to check the percentage of Canadian dollars flowing to them per Canadian student attending that university.

I don’t think I would call Australia’s example as skirting the law because the law they used was specifically created to encourage support of foreign charities in high risk areas by letting Australians avoid paying taxes if they donate money to these approved charities and the way the Church uses the donations is in exactly that way.

Also I would accept the usage of skirting the law in the Canadian and US cases only if there is attached the connotation that doing so is not inherently immoral.  It may or may not be immoral depending on the purpose of doing so.  Please don’t claim somewhere I am saying the Church is skirting the law though, because my guess is most people attach the connotation of immorality to the phrase.  I just haven’t seen it used enough to know if that is a consistent connotation or not.  Am curious about it.  If it is always or almost always used as for immoral purposes, I do not agree it was skirting the law in order to avoid the confusion that I consider that the “pattern” is immoral.  I do believe pushing employees to sign forms so that they were intentionally lying on the SEC form which required the person signing it to have been aware of what the forms said was immoral, but so far not seeing anything else I’d call immoral.

Edited July 14, 2023 by Calm

[Calm]

1 hour ago, ksfisher said:

This is interesting.  So Australians who donate to the Red Cross, for say, the purpose of famine relief in Africa, can't fully deduct the donation?  What percentage is deductible? 

Are fast offering donations fully deductible? 

No, there is a law that allows donations to certain foreign charities.  It is religious donations that must stay in country iirc and only 75% iirc is allowed to be nontax deductible.  The Church’s method of paying religious costs through donations from the US Church organization (iirc) and putting all members’ tithing to donating to the foreign relief charities allows the 75% to be raised to 100%, a benefit to members, not necessarily the Church itself.  Going off of memory here, so amounts may be wrong.

Edited July 14, 2023 by Calm

[Calm]

36 minutes ago, webbles said:

I found that donating to an organization that is a Deductible Gift Recipient (DGR) allows you to deduct the donation.  Australian members donate to the "L.D.S. Charitable Trust Fund" and per the ABR, it is still a DGR.  See https://www.abr.business.gov.au/ABN/View/60964279191 and scroll down to the section "Deductible gift recipient status".  It has been that way since 2000.  So for now, tithing is 100% deductible.  We'll have to see if the DGR status of "L.D.S. Charitable Trust Fund" changes or if the church changes where tithing goes to.

And it was DGR before the law changed to allow encourage donations to approved foreign relief charities.  Maybe Just An Australian can clarify if DGR status not changing during this time (I think the foreign relief law changed in 2014 or 15) is significant or not.

[Calm]

1 hour ago, LoudmouthMormon said:

I reject, completely and totally, the notion that people should be willing to pay any and all taxes, as long as it "doesn't create a hardship".   

As an American citizen living in the 2020's, I have unwanted government services/aid forced on me, whether I want it or not.  The notion that I should be tickled pink to fork money over for stuff I don't want or need, frankly repulses me.  And not just a little.

Imma need another forehead.  Any volunteers for my 2nd rant?

 

(Full transparency: With the recent "Cal's gal pals" bruh-ha-ha, I just wanted to say that I like @Calm.  I appreciate being able to debate with folks with whom I disagree.  I trust all the energy and zeal folks see in my recent posts are seen for what it is - directed at ideas, not individuals.  Regardless of forehead size.)

I just wrote a long response, but blast it, it’s all political in my view and I don’t have a clue how not to make it that way.  So will have to limit my response to it would have been fun to debate and especially I don’t think you are less charitable or patriotic or whatever because you view taxes that way.  You believe other solutions are more effective for problems it seems to me and not promoting keeping all your money for yourself or your family so you and others can immodestly lord it over those who struggle.

Edited July 14, 2023 by Calm

[Calm]

2 hours ago, webbles said:

Any idea how Australian members will know this?  For example, in the US, when I fill out taxes, I just put my tithing amount in the deduction section.  The IRS may decide to audit me and if they do, I then show the report from the church with how much I donated.  Do the Australian members receive a document from the church that says X% of the donations is deductible?  How will we know that it actually was a scheme?

I am pretty sure Just An Australian said members get a form saying what percentage applies to their donations when they get their receipt for the donation (because percentage depends on what category the organization has been registered as) or rather it is on the receipt itself.  I may go looking for that post for multiple reasons.

Edited July 14, 2023 by Calm

[Chum]

5 minutes ago, Calm said:

I just wrote a long response, but blast it, it’s all political in my view and I don’t have a clue how not to make it that way.  So will have to limit my response to it would have been fun to debate and especially I don’t think you are less charitable or patriotic or whatever because you view taxes that way.  You believe other solutions are more effective for problems it seems to me and not promoting keeping all your money for yourself or your family so you and others can immodestly lord it over those who struggle.

I don't know anyone who wants every government service they pay for. Maybe there's an angle in that.

[JustAnAustralian]

2 hours ago, webbles said:

Do the Australian members receive a document from the church that says X% of the donations is deductible?

We get a donor statement at the end of each financial year with the total amount we are able to claim as a charitable donation for tax purposes.

[Calm]

2 hours ago, Craig Speechly said:

Tithing donations are non deductible.

Going backwards in reading…

Pretty sure Just An Australian said they were deductible at a lower percentage, 75% iirc, or would be if the Church didn’t choose to donate the tithing to a Developed Country Relief Fund (why don’t they call it developing country?)

Quote

Donations to a humanitarian charity are fully deductible IF it benefits Australia

Not accurate.

https://www.ato.gov.au/Non-profit/Getting-started/In-detail/Types-of-DGRs/Developed-country-disaster-relief-funds/

Quote

Characteristics of a developed country disaster relief fund

A developed country disaster relief fund is a public fund that has the following characteristics:

• the fund is either
  • set up and controlled by a registered public benevolent institution (PBI), if the fund is an entity in its own right
  • operated by a registered PBI
• the fund is established and maintained by the registered PBI solely for providing money for the relief (including relief by way of assistance to re-establish a community) of people in a country other than
  • Australia
  • a country declared by the Minister for Foreign Affairs to be a developing country
• the people of the country are in distress as a result of a disaster
• the disaster is recognised by a Treasury Minister as a disaster.

 

Edited July 14, 2023 by Calm

[Calm]

3 minutes ago, Calm said:

Going backwards in reading…

Pretty sure Just An Australian said they were deductible at a lower percentage, 75% iirc.

And he arrives as I speak!  And no rep points to express my joy!

Edited July 14, 2023 by Calm

[Calm]

4 minutes ago, JustAnAustralian said:

We get a donor statement at the end of each financial year with the total amount we are able to claim as a charitable donation for tax purposes.

So do other charities/organizations hand out the info at the end of the year or do they give the info with each donation…I can’t remember if I got that idea from you or elsewhere in my online wanderings that were way too extensive when we first discussed this.  Or it might have even been in a conversation with my brother who lived in Australia a few years back.

Edited July 14, 2023 by Calm

[JustAnAustralian]

36 minutes ago, Calm said:

So do other charities/organizations hand out the info at the end of the year or do they give the info with each donation

A bit of both. A donation over $2 to an organisation on the DGR can be counted as a charitable donation for tax purposes.

Door knockers, tables at markets etc will generally give you a receipt at the time. One-off online donations do the same thing (or at least have in the past when I've done them). 

If you're doing regular donations (for example an automatic monthly donation) you'll get an end of year one (mine tend to be via email, see screenshot attached)

 

[JustAnAustralian]

52 minutes ago, Calm said:

Pretty sure Just An Australian said they were deductible at a lower percentage, 75% iirc,

For a while tithing was 75% and fast offering 100% (wasn't paying attention to the specific reasons at the time), then when the law changed it went back up to 100% for both.