Deseret News Opinion Piece: Perspective: I teach tax law. This is what I wish reporters understood about church finances

[Teancum]

On 9/15/2023 at 3:04 PM, smac97 said:

We've had a ton of threads about the Church's finances.  Here's another, based on an opinion piece published today by Deseret News: 

About the author: 

Here's the article:

Oh my, yes.  

The Church is bad because it doesn't spend money on charitable purposes and because it does spend money on charitable purposes.

The disconnect, I suppose, is that lookyloos think that the Church ought to spend more on particular types of charitable/religious purposes.

Yep.  Conflating A) what the law is with B) personal/subjective views on what the law should be is seldom a good idea.

And much of the Sturm und Drang vented against the Church in recent years has heavily relied on this conflation.

Cool!

I think this "opulence" is sometimes deliberately left vague, as it leaves room for passersby to confuse the "opulence" of temples (devoted solely to God, with nobody living in them) with the "opulence" of the profligate lifestyles of some religious leaders (Creflo Dolalr, Benny Hinn, etc.).

That's a very good question.

I am curious as to whether anyone here disagrees with any of the above.

The next part is concise and to the point:

And in the absence of any such violation, all the hue and cry ends up being not about legalities, but about subjective expectations from (often hostile) lookyloos about what the Church should do, how and where and how much it should spend of its resources, etc.

Again, I think the common criticism is that the Church is not doing enough "humanitarian" work.

We've had plenty of commentary on Huntsman's lawsuit as well.  I share the above critique, as I think the suit is very poor and almost certain to fail (the only lingering hope for it coming from Huntsman having "forum shopped" it to California).

A worthwhile and reasonable call.  

I won't hold my breath, though.  Today's cadre of "journalists" leave a lot to be desired.

I suspect this is why critics of the Church never actually get around to lobbying Congress.  Selective indignation has its perqs, I guess.

Sage advice.

Thoughts?

Thanks,

-Smac

Though I intentionally have avoided tax law related to tax exempt organizations I do know some about this area of the tax law as my firm has numerous clients that are impacted by the tax law in this arena. I would agree entirely with the article. I imagine those in my firm who deal more in this area would agree as well.

The major issue really is that most critics, myself included, have the opinion that The Church of Jesus Christ ought to spend more of it billions amassed to relieve human suffering.  But it is not mandated by tax law to do so, nor do I recall arguing as such. 

 

Though I am not sure about the money EPA give (loaned?) to the mall and insurance company.  That seems to fall into a for profit endeavor.  But I would need more detail to conclude that it might be in the arena of Unrelated Business Income and there is a tax on that for tax exempt entities.  Can funds that were accumulated under the exemption purpose then be contributed to a for profit entity? I think the answer is yes.  Those can be corporations or LLC owned by the exempt entity.  In that case Unrelated Business Income would not apply so long as the two for profit entities are paying tax on profits. Unrelated Business Income Tax is only imposed when the exempt entity is earning income that is not related to its state exempt purpose. Exempt entities are allowed to own for profit entitles so long as those entities and their activities are separate from the tax exempt entity and they pay the proper tax.