Grunt

Financial Whistleblower

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The fact that the Church is wise enough to keep financial reserves shouldn't be a shock to faithful members of the church, as we are told to do the same in our own lives.
From 2018 - Church Finances and a Growing Global Faith

Quote

Church Reserves

Church members are taught to “gradually build a financial reserve by regularly saving [a portion of their income]” (Providing in the Lord’s Way: Summary of a Leader’s Guide to Welfare [booklet, 2009], 2). The Church applies this same principle in its own savings and investments. In addition to food and emergency supplies, the Church also sets aside funds each year for future needs. These funds are added to Church reserves, which include stocks and bonds, taxable businesses, agricultural interests and commercial and residential property. Investments can be accessed in times of hardship or to meet the emerging needs of a growing, global faith in its mission to preach the gospel to all nations and prepare for the Second Coming of Jesus Christ (see Gérald Caussé, “In the Lord’s Way: The Spiritual Foundations of Church Financial Self-Reliance,” Church Newsroom, Mar. 2, 2018).

 

Edited by NeedleinA

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By Common Consent also has an interesting article up by their resident tax lawyer on the situation. https://bycommonconsent.com/2019/12/17/some-thoughts-about-ensign-peak-advisers-and-the-church/

His highlights:

  • The Church itself has done nothing wrong here.
  • Ensign Peak Advisers may have operated in a weird space, but probably hasn't violated any laws or regulations
  • But unless Ensign Peak Advisers has made qualifying charitable expenditures, it probably shouldn't qualify for tax exempt status*.

 

* If I understand correctly, you are receiving money and not making charitable expenditures, you are really an investment firm, and that doesn't get the same tax-exempt benefits as a charitable organization.

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The letter is titled “A Letter to an IRS Director”... sounds like it is trying to be the sequel to “A letter to a CES Director”

Edited by Fether

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3 hours ago, Backroads said:

I gotta say, and this may reveal personal issues in my own adulting, but I actually haven't read the articles. I tried to be responsible enough to read summaries and such but in truth...

Boring.

Ah, man. Finances. So... Boring...

I watch my family budget and our investments and try to be responsible enough but I really hate it and don't understand why we can't just go live off the land and sell the zucchini we grow or something because I hate finances.

And I just don't understand why I need to care about any of us this.

If the cold dispassionate tax folks do their fair thing I will heed whatever punishment or lack thereof they give the Church.

But why must I get up in arms because I don't want to!

I agree - but maybe not????  What I hate is the respect of money.  I hate that we live in a society that determines a person's worth and value by money.  I hate that many think money bring freedom or that it is a means of ending poverty.  I hate that people will work for money more than honor and respect.  And I hate that I am growing older and may have to someday rely on the care of others.  I hate to go out to dinner and be served (especially if a tip is expected).  I hate asking for service and I especially hate having to rely on anyone else to take care of my stuff.  Suggestions are fine - but I do not like giving up my stewardship's to anyone else.  I do not like getting gifts and presents (especially in the form of money).  I do not mind helping someone but I resent throwing money at people or those that do; thinking it helps.

Much of this comes from my family upbringing - but I must give Brother Hugh Nibley his credit and my relationship to him.

 

The Traveler

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1 hour ago, MarginOfError said:

By Common Consent also has an interesting article up by their resident tax lawyer on the situation. https://bycommonconsent.com/2019/12/17/some-thoughts-about-ensign-peak-advisers-and-the-church/

His highlights:

  • The Church itself has done nothing wrong here.
  • Ensign Peak Advisers may have operated in a weird space, but probably hasn't violated any laws or regulations
  • But unless Ensign Peak Advisers has made qualifying charitable expenditures, it probably shouldn't qualify for tax exempt status*.

 

* If I understand correctly, you are receiving money and not making charitable expenditures, you are really an investment firm, and that doesn't get the same tax-exempt benefits as a charitable organization.

Seems pretty reasonable to me. But where does it say that Ensign is a non-profit entity?  I hadn't read that -- not that I read very much.  So, honestly, are they?

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From the Church auditing department report of the April 2018 General Conference

"The Church follows the practices taught to its members of living within a budget, avoiding debt, and saving against a time of need."

Obviously, if the church is consistently living within its budget and avoiding debt, then a surplus will unavoidably accumulate. 

 

 

 

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Here in Australia, about 5 years ago, the AUstralian Taxation Office investigated the church's charitable status. The result of the investigation was that it was decided that fast offering should continue to be 100% tax deductible, whereas tithing, in the belief that some of it was being used for purposes that did not fit within the legislated definition of charitable purposes, would only be 75% tax deductible. From what I recall, there was some mild grumbling amongst some members but I don't think it had any impact on people's willingness to give tithing and fast offerings.

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On 12/17/2019 at 9:43 AM, Grunt said:

Why do so many people which aren't affected AT ALL by this so upset by it?     I think it's funny that the spokesman just referred them to the website.

Because some of us believe that there are certain circumstances under which which religious institutions should pay taxes. Stockpiling funds earmarked for charity and not spending it on charitable purposes is one such circumstance.

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Perhaps ever since the US government confiscated ALL of its wealth and assets, the church has been understandably prudent in its financial management. I'm sure the lessons of the 1880s and 1980s have been burned into the consciousness of all church financial leaders. 

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1 hour ago, Mores said:

Seems pretty reasonable to me. But where does it say that Ensign is a non-profit entity?  I hadn't read that -- not that I read very much.  So, honestly, are they?

From the WaPo article (which I have no reason to dispute on this point)

"Ensign is registered with authorities as a supporting organization and integrated auxiliary of the Mormon Church. This permits it to operate as a nonprofit and to make money largely free from U.S. taxes."

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18 hours ago, Just_A_Guy said:

There’s an LDS lawyer named Sam Brunson who blogs at By Common Consent (about the only redeeming feature of that cesspool), and his take is that we are sort of in a murky area of law.  In theory a not-for-profit subsidiary asset holding fund of a nonprofit is supposed to occasionally make donations to its parent nonprofit that are “commensurate” in size of the subsidiary.  But there’s a question about whether that “commensurate” standard applies at all; and my own take is that even if it does, the question is “commensurate to what”?  If the Church says (for example) “the fund needs to be commensurate to the work the economic/social reconstruction the Church anticipates being called to do once the White Horse prophecy has been fulfilled”—does the IRS have the constitutional right to say “the White Horse Prophecy is will never come to pass and you have no theological right to plan for it”?

Furthermore, I would submit that propping up a life insurance company in the middle of the 2009 financial crisis so that it could pay its employees and policy holders, is very “humanitarian”; as is urban redevelopment at City Creek.  It maybe too white-collar for the tastes of some progressives; but it very much provided a social and charitable benefit to the local community—believers and unbelievers alike.  

2 hours ago, MarginOfError said:

By Common Consent also has an interesting article up by their resident tax lawyer on the situation. https://bycommonconsent.com/2019/12/17/some-thoughts-about-ensign-peak-advisers-and-the-church/

OK.  I read the article.  And it was very informative.  I have to point out that this area is more "tax law" than accounting.  So, I have to bow to his better analysis.  There were some things he said that I was not aware of.  But they make sense.  And other things that I understood, I agreed with what he said.  I liked his "three questions".  And, yes. I agree with the answers.

2 hours ago, MarginOfError said:
  • But unless Ensign Peak Advisers has made qualifying charitable expenditures, it probably shouldn't qualify for tax exempt status*.

I was able to find out that they are, indeed, a 501(c) corp. Articles of incorporation are public.   And I also found out that their balance is not $100 Billion in funds.   SWFI indicates their assets were about $124 Billion.  So, yeah, even better. :) 

We might want to see Forbes article which is less hagiographic, but even handed nonetheless.

There is also the fact that we don't know if the fund was created as an endowment.  This again is more Tax Attorney territory than accounting.  But I do know this allows for tremendous accumulation of funds.

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19 hours ago, Just_A_Guy said:

If the Church says (for example) “the fund needs to be commensurate to the work the economic/social reconstruction the Church anticipates being called to do once the White Horse prophecy has been fulfilled”—does the IRS have the constitutional right to say “the White Horse Prophecy is will never come to pass and you have no theological right to plan for it”?

2 hours ago, Fether said:

The letter is titled “A Letter to an IRA Director”... sounds like it is trying to be the sequel to “A letter to a CES Director”

I noticed in the "Letter to an IRS Director" that he basically mocks the idea of the funds being used for Armageddon or the Second Coming.  But he specifically states,"The IRS would NOT view these as legitimate tax exempt purposes."  While comical, I found the previous comment to be noteworthy.

"EPA employees are told that the money will be used after the second coming of Jesus Christ." 

That seems unbelievable.  Who told them this?  "They are told" but not by whom.  Did anyone really tell them that money would be used after the second coming?  If that came from the prophet, then I guess we can prove that communism will not be the economics of the Millennium.

Armageddon?  I can see this as the rainy day fund of all rainy day funds.

Now, one major question is: How did they do it?  I think I have an answer.  BITCOIN.

EPA was founded in 1997 with $12 B in assets.  From the whistleblower, an additional $1B was added each year (I assume this is an average for the period).  That means that by 2009, they had about $24 B in assets.   If you invest that money into Bitcoin in 2009 just through normal growth alone, that would have become $600 Trillion dollars.  So, using that as an upper end, that got me to thinking that it wouldn't take much to simply invest it.  At a 10% return each year, they should have $176 Billion by now.  See?  Proof that they really should have even more. :) 

And one thing that no one is talking about here is that the funds are not even taxable for ANY entity if the securities or assets have not been sold.  So, there would be no taxes owed if the investments were long term.

Edited by Mores

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On 12/17/2019 at 10:46 AM, MarginOfError said:

We can't even get paper towels on a regular basis any more.  Our fire alarm has been broken for six months. We submit requests to have it fixed, someone looks at it and says "this is what needs to be done to fix it" and then closes the ticket. So we're in this perpetual loop of not getting the stupid thing fixed because there's a higher priority on closing tickets than there is in fixing problems.

I order supplies for our building and while there was a slight hiccup due to the account number changing, it was quickly fixed and we never ran out of anything.

As far as the fire alarm, send that up the 'chain' to the Agent Bishop or the Stake High Councilman in charge of the building maintenance.

If that does not get it done I would be tempted to write a letter to the  Presiding Bishopric , 50 E North Temple St, Salt Lake City, UT 84150

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4 hours ago, Godless said:

Because some of us believe that there are certain circumstances under which which religious institutions should pay taxes. Stockpiling funds earmarked for charity and not spending it on charitable purposes is one such circumstance.

Why?

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Just now, Mores said:

It's just a control thing.

I'm not sure that's fair.
 

To be clear, I think taxing churches is a terrible idea (all churches, not just my own), but you can't read the motives of those who are in favor of it. 

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3 hours ago, Grunt said:

Why?

Imagine if the Red Cross collected billions of dollars, tax free, under the premise of charity and just sat on it rather than using it for charitable purposes. Would you be okay with that? 

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8 hours ago, Godless said:

Because some of us believe that there are certain circumstances under which which religious institutions should pay taxes. Stockpiling funds earmarked for charity and not spending it on charitable purposes is one such circumstance.

And why are you in charge of determining just when they should spend that money that they've been saving?  Are they not allowed a rainy day account just because you said so?  On this matter, your liberal bias is showing a whole lot more than your dislike for the Church.

I hope you understand that if any business (for-profit or non-profit) were allowed to save a lot more, we would not have lay-offs in this country at nearly the level that we see.  But because of the tax policies that you're supporting, businesses (for-profit or non-profit) are encouraged to work at a barely sustainable level at all times.  So, we have lay-offs and bankruptcies.

9 minutes ago, Godless said:

Imagine if the Red Cross collected billions of dollars, tax free, under the premise of charity and just sat on it rather than using it for charitable purposes. Would you be okay with that? 

It depends on what they're saving it for. 

What if they're saving it for a really big research facility that could eventually provide a cure for cancer?  But that costs money.  And if they don't want to go into debt (another reason many businesses go bankrupt) they have to save.

Sometimes, big plans are in the works.  And for an organization like the Church, with many enemies, they can't go blathering about all the plans they have.  Do you know how many churches and temples had to be postponed because people found out that "The Mormon Church" was the party buying that property?  I know of two stakes that had to postpone new buildings for years (one of them two years, the other for six years) because people kept wanting to back out of a deal once they found out who was buying the property.

If people behave like that with a simple real estate endeavor, imagine what would happen if people knew what long term plans the Church had.  Not because it is sinister, but because it would be "too good for the Mormons".

This is just a matter of someone looking in from the outside, second guessing motives and goals.  That's all.  Nothing else.

Edited by Mores

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55 minutes ago, Godless said:

Imagine if the Red Cross collected billions of dollars, tax free, under the premise of charity and just sat on it rather than using it for charitable purposes. Would you be okay with that? 

If they are sincerely planning to use it for a charitable purpose at some future date, then sure.  

Heck, Harvard has been described as “a $40 billion trust fund with a university attached”.  And Harvard never revitalized an ailing city center, or bailed out a near-bankrupt insurance company with 1,200 people on its payrolls in the midst of a near-catastrophic global recession.  

If a federal, state, or municipal government had done what the Church actually did vis a vis City Creek or Beneficial Life, it would be lauded as an example of a government successfully acting towards progressive ends, saving jobs and combating poverty.  But because a private, tax-exempt, religious entity did the very same thing; all of a sudden it’s some sort of boondoggle and abuse of the public trust?

Edited by Just_A_Guy

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45 minutes ago, Mores said:

And why are you in charge of determining just when they should spend that money that they've been saving?  Are they not allowed a rainy day account just because you said so?  On this matter, your liberal bias is showing a whole lot more than your dislike for the Church.

I hope you understand that if any business (for-profit or non-profit) were allowed to save a lot more, we would not have lay-offs in this country at nearly the level that we see.  But because of the tax policies that you're supporting, businesses (for-profit or non-profit) are encouraged to work at a barely sustainable level at all times.  So, we have lay-offs and bankruptcies.

I'm sure there's a taxable rate that could land the church somewhere between bankruptcy and $100B. I'm not saying that non-charitable assets should be taxed into oblivion, simply that "rainy day funds" with no clear charitable purpose should not be tax exempt. It leaves a great deal of room for fraud and abuse. 

Quote

It depends on what they're saving it for. 

What if they're saving it for a really big research facility that could eventually provide a cure for cancer?  But that costs money.  And if they don't want to go into debt (another reason many businesses go bankrupt) they have to save.

Understable. I'm not against something like that, but I believe that transparency is important. 

Quote

Sometimes, big plans are in the works.  And for an organization like the Church, with many enemies, they can't go blathering about all the plans they have.  Do you know how many churches and temples had to be postponed because people found out that "The Mormon Church" was the party buying that property?  I know of two stakes that had to postpone new buildings for years (one of them two years, the other for six years) because people kept wanting to back out of a deal once they found out who was buying the property.

If people behave like that with a simple real estate endeavor, imagine what would happen if people knew what long term plans the Church had.  Not because it is sinister, but because it would be "too good for the Mormons".

So the response to public distrust of your organization is to shirk transparency and plan your new projects in secret? Looks like that's going well for you.

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1 hour ago, Godless said:

Imagine if the Red Cross collected billions of dollars, tax free, under the premise of charity and just sat on it rather than using it for charitable purposes. Would you be okay with that? 

Should the government be OK with it... YES.    Should an individual... that depend on the individual.  If they are then fine... if not then they stop donating... and if they feel they were deceived or fraud was involved that is something they can have the government investigate. 

 

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46 minutes ago, Godless said:

simply that "rainy day funds" with no clear charitable purpose

Please provide a link to your Church source material so I can read where they state that they have "no clear charitable purpose" for said reserves.

50 minutes ago, Godless said:

I'm sure there's a taxable rate that could land the church somewhere between bankruptcy and $100B.

Why is $100B offensive yet some mystery number <$100B is not?
"The Church is (insert negative rant) they have too much money saved."
"The Church is (insert negative rant) they have too little money saved."
Wise stewards of financial resources OR uninspired lousy financial planners... individuals are going to protest either way.

1 hour ago, Godless said:

So the response to public distrust of your organization is to shirk transparency and plan your new projects in secret? Looks like that's going well for you.

Perhaps the need for approval by those with public distrust is ultimately of little to no concern. Perhaps said organization realizes that no matter what they do, dissenters stand at the ready to do what they ultimately grave, you know, 'dissent'.

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3 hours ago, Godless said:

I'm sure there's a taxable rate that could land the church somewhere between bankruptcy and $100B. I'm not saying that non-charitable assets should be taxed into oblivion, simply that "rainy day funds" with no clear charitable purpose should not be tax exempt. It leaves a great deal of room for fraud and abuse. 

What's wrong with $100 billion? What makes that number "too big"?

I'm not sure I understand the evil in "hoarding" money. Saving is no longer allowed?

3 hours ago, Godless said:

Understable. I'm not against something like that, but I believe that transparency is important.

Why? As long as no laws are being broken, why should any individual or private organization be forced or even expected to give a public accounting for their expenditures?

3 hours ago, Godless said:

So the response to public distrust of your organization is to shirk transparency and plan your new projects in secret? Looks like that's going well for you.

So because people like you don't like it, therefore that means it's bad?

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Guest Mores
8 hours ago, Godless said:

I'm sure there's a taxable rate that could land the church somewhere between bankruptcy and $100B.

If your judgment is so much wiser than ours, what rate would that be?  You're so wise, tell me the number.

Remember that income tax began with the promise that it would never exceed 1% and it would only be on the wealthiest 1%.

That seemed to work out well for you.

Quote

with no clear charitable purpose should not be tax exempt. It leaves a great deal of room for fraud and abuse.

Specific purpose?  Please provide the list of "acceptable clear purposes" for a rainy day fund.  Isn't the very definition of a rainy day fund to prepare for the UNKNOWN?  What is YOUR rainy day fund specifically for?

Quote

Understable. I'm not against something like that, but I believe that transparency is important. 

Transparency for whom?  I've given my reasons for wanting to keep things private.  You've given no real alternatives to satisfy my reluctance to share more information.  Alleviate my concerns and we can talk about more public transparency.

Quote

So the response to public distrust of your organization is to shirk transparency and plan your new projects in secret? Looks like that's going well for you.

I'd encourage you to take an honest look at what is motivating your comments here.  If I were to project the most positive motivations to these comments, it would seem that your problem has more to do with current laws and your own distrust, rather than anything the Church actually "DID".

Again, it is the liberal mindset that says "anyone with a lot of money can't be trusted.  They must be up to no good.". I reject that notion.

If that's not what you're trying to say, then explain how anything you've stated should be interpreted as anything but that.

There are controls in place.  There is a lot of oversight.  It just isn't done by YOU.  It is done by people WE trust.  YOU don't trust them.  But it is NOT. YOUR. MONEY.

You speak of the breech of public trust.  Since when did the public ever trust the leadership of that evil cult of Mormonism?

Just whom do you think we're supposed to to satisfy?

If it's the IRS, then I'd encourage you to read the Forbes article I posted earlier.  His conclusion was simply, let the IRS do their job.

If it's YOU and people like you, what business is it of yours?

The membership of the Church will give or not give as we see fit, and for our own reasons. But you don't even trust us with our own money?

You keep using the word "secret" as if it implies evil.  You keep using the word "transparency" as if it is the standard of good.  I disagree.  In financial matters, PRIVACY is extremely important.  Our goals and plans are kept private because it helps achieve them.

And, yes, it has worked out well for us - or else we wouldn't have $120 Bil saved up.  I actually have zero idea why you're implying otherwise.

Edited by Mores

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So, I’m going to back up @Godless just a bit here.  I don’t know that he’s complaining about the private acquisition of large sums of money per se; I think his concern is when that is done with untaxed money.  

As voters and taxpayers, I think Americans do have an interest in wanting to make sure the tax burden is distributed equitably (whatever that means), and ensuring that specific organizations are complying with the law, and ensuring that specific tax exemptions are being used in a way that furthers the policy that was used to justify their creation in the first place.  

If we saw a large tax-exempt investment portfolio that was supporting lavish lifestyles of its managers/owners, and/or which its owners not only weren’t using for charitable purposes but apparently had no plans ever to do so, and/or had a history of ethically/morally/legally suspect behavior—I’d be concerned. 

Thankfully, I don’t think those conditions apply to what the Church is doing; but “nunya bidness” doesn’t *quite* seem to be the most effective answer to our critics on this.

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