(Photo: Pixabay)
Update: Voice of the Martyrs has been removed from the following spreadsheet. The ministry to persecuted Christians does produce a Form 990 which is available on request, but not through the IRS database or ProPublica.
Since 1998, evangelical ministries with combined assets of more than $700 million have stopped filing the Form 990 which discloses critical financial information for donors.
Media ministries are merging with churches or requesting the IRS reclassify themselves as churches or church integrated auxiliaries to avoid disclosing compensation of key leadership, legal expenses, and travel expenses because churches and similar organizations (synagogues and mosques) are exempt from filing.
In 2005, IRS Commissioner Mark Everson sent a letter to Senator Chuck Grassley claiming that because churches were not required to file an informational return, “we have little ability to monitor their operations against diversion of assets.”
The following spreadsheet features a list of 21 non-profits and trade names that are still operational along with the last fiscal year they filed a Form 990.
(Photo: Spreadsheet compiled by Trinity Foundation)
The trend may have begun with Jimmy Swaggart Ministries which merged with Family Worship Center Church in 1997. The ministry’s 990s from the mid-1990s are not available online.
After the merger, Swaggart’s church registered Jimmy Swaggart Ministries as a trade name. This allows the church to perform business and to have a bank account in the name of Jimmy Swaggart Ministries.
More recently, the Billy Graham Evangelistic Association (BGEA) filed for a group exemption which was granted in 2014. The BGEA’s final 990 covering 2014 reported $258,677 in compensation for the ministry’s president Franklin Graham. BGEA no longer discloses Graham’s compensation. Also, in 2014 Graham received $629,821 in compensation from Samaritan’s Purse, another non-profit where he serves as president.
For donors concerned about excessive compensation, it is impossible to make informed decisions when compensation information is not available to the public.
Understanding the Process
When a new non-profit organization applies for tax-exempt status or an existing non-profit applies for reclassification, the Internal Revenue Service (IRS) examines the application and responds with a determination letter which is posted on the IRS website.
While churches are not required to obtain a tax-exemption, some will apply because IRS approval is helpful for obtaining loans.
The following photo shows part of the determination letter sent to Lifestyle Christianity and indicates the ministry is no longer required to file a 990.
In 2022, the IRS reclassified Grace to You, the media ministry of Pastor John MacArthur, as a public charity and exempted the ministry from filing a 990.
When the IRS revokes a non-profit organization’s tax-exempt status, a revocation letter is sent to the organization but not published on the IRS website. Instead, revocation letters are private. Their contents are kept secret by the 1974 Privacy Act.
Sometimes a non-profit organization will disclose on 990 that it has applied for reclassification. The following explanation appears on a 990 for The Inspirational Network which is the non-profit ministry of televangelist David Cerullo.
Integrated Auxiliaries
The IRS website reports, “The term integrated auxiliary of a church refers to a class of organizations that are related to a church or convention or association of churches, but are not such organizations themselves.”
Because integrated auxiliaries of churches are exempt from reporting requirements of the Form 990, many televangelists use this method to avoid financial disclosure.
Televangelists and large megachurches register trade names [also known as assumed names, fictitious business names and doing business as (DBAs)] for media ministries and church-run schools.
In 2011, a memo prepared for Senator Chuck Grassley and the Senate Finance Committee reported, “For example, we found at least 21 ‘assumed names’ registered with the State of Texas for Eagle Mountain International Church (also known as Kenneth Copeland Ministries). These included record companies and recording studios. This raises the question of whether church status is being gamed to shield such activities of a tax-exempt entity from public scrutiny.”
IRS Enforcement Actions Are Ineffective
Church status provides the perfect cover for scheming religious broadcasters and televangelists.
After The Word Network CEO Kevin Adell, received more than $15 million in compensation in three years through self-dealing, the IRS revoked the tax-exempt status of World Religious Relief, the parent organization of his TV network.
Adell responded to the IRS audit and revocation by creating Church of the Word and registering the trade name Word Network Church. Adell is free to operate as before but with even less transparency.
In 2021, the IRS revoked the tax-exempt status of televangelist David E Taylor’s Joshua Media Ministry International.
Meanwhile, Taylor’s church has registered two trade names in Texas: Campus for the Harvest and JMMI International Global.
In 2023, David E. Taylor’s church purchased a 67-unit hotel and added the name JMMI International Global to the outside of the building.
(Photo: The former hotel now serves as the home of Campus for the Harvest. The cropped picture comes from the YouTube watchdog channel Apostle David E. Taylor: Full Frontal Exposure 2.0)
In 2022, Taylor’s church purchased an $8.3 million mansion and guest house in Tampa, Florida, which functions as a tax-exempt parsonage.
Meanwhile, Taylor’s church does not disclose travel costs between Florida, Missouri and Texas or total assets acquired in the three states.
Rejection of Reforms
In 2011, a memo prepared for Senator Chuck Grassley and the Senate Finance Committee disclosed a willingness by the Senate to impose minimal reporting requirements for churches:
“Requiring some version of the Form 990-N, ‘e-postcard’, which was implemented in 2007, was one idea. It only requires basic information such as federal employer identification number, name, address, and a contact person for the organization.
We considered limiting the exception to churches that provided members with some voting rights.”
The memo also disclosed:
“We also considered limiting the filing exception for those subject to denominational oversight or oversight by an independent third party, such as the ECFA. We also considered requiring churches to publicly disclose only certain information, such as related entities and policies and procedures. Finally, we considered eliminating the integrated auxiliary exception.”
Senator Grassley asked the Evangelical Council for Financial Accountability to establish a commission to study the loopholes exploited by religious organizations and offer solutions. One of the questions for the commission was “Should new entities claiming church status at least be required to notify the IRS of its intent to claim church status?”
ECFA’s commission responded:
“Congress should never pass legislation requiring churches to file Form 990 or any similar information return or form with the federal government. To require such a filing would not only place a substantial and unnecessary burden on churches and the government, it would also raise significant constitutional concerns. New churches should not have registration or notification requirements beyond those that already exist.”
It should surprise no one that ECFA’s commission defended the status quo because attorneys of televangelists served on the commission’s panel of legal experts.
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