A loathsome, terrible lack of Congressional and IRS oversight of televangelists and religious organizations exposes the huge need for new laws to prevent abuses of the public trust.
“No church property is taxed and so the infidel and the atheist and the man without religion are taxed to make up the deficit.” Mark Twain
Mark Twain, whose real name was Samuel Langhorne Clemens, died on April 21, 1910, and yet his comment is even more appropriate now.
Huge amounts of church property here in the U.S. are not taxed. Aside from places of worship, churches, synagogues, and mosques also often provide property-tax exempt homes for their pastors, rabbis, and imams. In December 2021, the Houston Chronicle published an article we helped with exposing many church parsonages worth over a million dollars (our own article here).
In addition to extravagant church parsonages, religious non-profit laws allow for unhindered money laundering of church funds, obscenely huge tax-exempt housing allowances, loosely regulated bulk-cash smuggling out of the U.S., multi-million-dollar yearly salaries, and ministry-owned private jets used for personal vacations. And the list goes on. Read our “Dark Money” article for numerous examples.
Church, synagogue, and mosque income is generally tax-free. Though churches are supposed to report unrelated business income, there are many exclusions and deductions allowed. For example, Trinity Church in New York City owns more than six billion dollars worth of real-estate but does not disclose rental income by filing a form 990T. This is legal, believe it or not.
Religious double-dealing is nothing new. Jesus Christ’s anger at this, compelled him to enter the temple in Jerusalem, overturn the money tables, and use a whip to drive out the “pious” priests profiting from their corrupt commodities.
For those of us who call ourselves Christians, is this what Christ called us to do? To place a heavier burden on unbelievers around us, be it taxes for the public benefit or otherwise? Any casual look at Jesus’ teachings will show quite the opposite. When asked about paying taxes, he said “Render unto Caesar what is Caesar’s,” i.e., pay what is due the government.
What can be done? Require religious non-profits to file an IRS form 990.
All non-religious non-profits in this country are required by law to file the public form 990, 990EZ, or the “postcard” 990-N (which is not really a postcard, but only a brief online notice of gross income less than $50,000), depending on size and income. The 990 and 990EZ reveal the incomes of the highest paid employees and general contractors as well as how the money is spent in general.
It would be easy to continue to give religious organizations special status, while still promoting transparency and accountability. Similar forms 990REL, 990REL-EZ, or postcard 990REL-N, could be created and instituted depending on size and income, while allowing much larger income requirements. Read our initial proposals here.
What else can be done besides requiring 990s? A ban on anonymous Limited Liability Corporations (LLCs) and Trusts for Non-Profits
Transparency is the key issue here. LLC’s and trusts in general are anything but transparent. If the general donating public has no idea who the owner, manager, or the parent company is, they cannot possibly make an informed decision.
When large non-profits are receiving the privilege of tax-exemption and other taxpayers are shouldering the added burden caused by their absence from the tax rolls (both nationally and locally, such as property taxes), we believe these hundreds of thousands of organizations should be fully transparent in exchange for this benefit.
Limiting liability for organizations that have accumulated hundreds of millions of dollars is ludicrous. There are other ways for smaller non-profits to receive a measure of liability protection when they are held liable for damages.
Wealthy religious organizations and their leaders who are benefitting from the largesse are not going to police themselves, as much as Senator Grassley wishfully hoped they would back in the 2000s and early 2010s (see our press release about the “Grassley Six” debacle here). The problem was bad then and is only worse now.
In exchange for the privilege of tax exemption, complete financial transparency should no longer be optional for religious non-profits hiding behind their church status. And in fact, many churches and religious organizations actually do provide access to view their monetary dealings.
Postscript: a lesson for today from John Wycliffe
If an organization desires to hide its financial dealings, the organization can declare itself a for-profit entity, pay its rightful taxes, and do so. Many followers of John Wycliffe , who became known derogatorily as Lollards and Lollardites (extant in the 1400s and 1500s) believed among other things, that churches and their members should pay taxes.
These Lollards maintained Wycliffe’s contentions that “a church which held large, landed possessions, (that) collected tithes greedily and took money from starving peasants for baptizing, burying and praying, could not be the church of Christ and his apostles.”
Wycliffe challenged the church’s right to own property protected from civil powers and this severely angered the Catholic church and the pope, who demanded his arrest. Here and now in America, a similar situation exists.
Many churches, including worldwide denominations, today greedily take money from the poor, accumulating more and more property holdings. In 1382, Wycliffe appeared publicly at the “Earthquake Council” of 1382 at Black Friars in London to appeal to the laity to support the government in seizing church holdings and prohibiting payments to (the Papacy in) Rome.
While Trinity Foundation does not support government seizure of church property holdings, we do support sufficient government oversight to require financial transparency and accountability so that donors can know about how their money is being used.