Recent news about real estate acquisitions by the corporation formerly known as the LDS church will surely initiate another round of demands to tax the churches. I think this idea is misguided, as I will explain here. There are only a few types of taxes that presumably could be imposed. You could levy property taxes for their meeting halls. Or one could impose capital gains taxes on their investments. The first may help local municipalities a bit, but not all that much. The second is doomed to failure due to all those creative accountants who ensure that all such gains will never be seen by the IRS. But as the outlays for actual charity are seen to be a joke (and LDS Charities does not count- it is not an an official church organization), it is getting more and more untenable to permit those who contribute to the real estate enterprise to claim tax deductions for their contributions. If ever we stop letting people take those deductions, the contributions will dry up like the Great Salt Lake and blow away in a puff of smoke. Someone needs to point out to a judge somewhere that his or her contribution s really did not go to anything spiritual or charitable. Then the process could begin.

If I understand the tax law, philanthropies which run a for-profit activity have to declare that, and be taxed. Please correct me if I'm wrong. If a church runs a bookstore or a coffee house, and make money, that's taxable.

So if I'm right, perhaps a citizens lawsuit against LDS and the IRS to declare that Ensign Peak Advisors serves no charitable, philanthropic, or ecclesiastical purpose, and thus should be designated a for-profit enterprise and taxed.

Or am I pipe dreaming?

They probably do pay taxes on their gains (but maybe not). But in any case, their donors have no business getting tax breaks on their contributions.

From the other point of view (always should be considered)-

most or at least some churches do have community helping activities.

some sponsor a 'church family' who can't make ends meet (ala former church janitors/custodians), others have feeds.
Many churches allow the use of their facilities for worthwhile groups that are Open to everyone (NOT like ChurchCo 'welfare'!) Habitat comes to mind since I was in on an early affiliate in east King County...

It's a broad base of ppl who contribute for a wide variety of reasons/choices, that's an impossible sell, IMHO.

IRS laws allows a 501c3 to earn profits from what is termed "social enterprise". The church is allowed to have some businesses that are tax exempt, as long as those businesses meet certain criteria. The business has to be in line with mission of the organization. For example, the Red Cross can make tax free profits selling CPR masks and safety-related instructional materials. But they can't open a restaurant or a dry cleaning business. The social enterprise portion of the revenues can not exceed more than fourty-nine percent of the organization's total revenues which need to come from a minimum of fifty-one percent as donations.

If the IRS were to prevent the mormon church from owning any non-related (to the organization's mission) businesses, then the church would have to sell-off any and all other businesses that are not related to the church's mission. Limit the Mormon church to only donations and social enterprise money (no other revenues allowed). Pretty much, this would limit the church to making business profits mostly from church bookstores and from garment sales. The church should be either a charity or a business. But not both.



Edited 2 time(s). Last edit at 06/24/2021 06:35AM by azsteve.

"If the IRS were to prevent the mormon church from owning any non-related (to the organization's mission) businesses,..."

Well, since their mission is to create a financial empire so they can rule the world when Christ returns (lol), they wouldn't need to change a thing.

"impose capital gains taxes on their investments." For all our sakes I hope that the irs can keep the taxes very close to what they are now, taxed on realized gains, but I read an article recently that indicates that they are after everyone's wealth (and unrealized gains).

"Under the administration’s proposal, unsold assets held by trusts, partnerships and other noncorporate entities would be treated as sold every 90 years, starting Dec. 31, 2030. It is designed to be roughly a person’s lifetime, the Treasury official said."

https://www.wsj.com/articles/bidens-capital-gains-tax-proposal-puts-estate-planners-to-work-11623157200

Think of all the farmers in Utah. All the green belt land, all the landlords. They could potentially lose half of their assets to retroactive capital gains tax if this passes.

I assume you saw the recent disclosures on how much a bunch of billionaires paid in federal income taxes. In many cases it was zero, or very close to that. It would be nice if the laws were adjusted so they at least paid something. There are too many ways to keep capital gains from being taxed at all, and even when they are taxed, it is at a considerably lower rate than than earned income.

slskipper Wrote:
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> If ever we
> stop letting people take those deductions, the
> contributions will dry up like the Great Salt Lake
> and blow away in a puff of smoke.

Oh yes, 100%!

They’ll still have the Temple recommend tithing requirement, the dread off not being in the Temple when the nieces and nephews marry, etc. But a dentist, say, is gonna have a much harder time handing over 25+ grand every year just for that.

There should be no tax exemption for any religious organization and it's just not the Mormons. The evangelicals are much worse, only to be out done by the Scientologists. For those interested, watch the Leah Remini's Scientology and the Aftermath on Netflix.

moehoward, can you give details on how these groups are "much worse" than the Mormons?

Lol, give you details? Try using google. "Much worse" is relative but what's your point? Are we trying to measure bad vs very bad?

No, just challenging sweeping statements not based on apparent facts.

I would point to the display of insanity from the evangelical "leaders" who prayed with Trump for starters.

Or getting on TV and trying to convince their followers to send money for a new jet.

Kind of like suggesting that because atheist Mao is responsible for killing millions all atheists are killers. But I would not want to use an extreme example.

Kentish, you just veered over the double yellow line

Happy to oblige if being on the double yellow means you can make generalizations without support. I am perfectly happy to accept criticisms but call foul when they are sweeping and tar all of a group with the same brush.

moehoward Wrote:
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> Kentish, you just veered over the double yellow
> line

Don't the British always drive on the wrong side of the road?

Never! How else ate you going to draw your sword and defend yourself?

A rightful criticism IMV but not evidence on the topic under discussion.