Why The Former Church Employee's IRS Complaint Holds No Water

Welcome to the incredibly confusing world of Tax laws! In a recent "public scandal" a former church employee claimed that the church has been misusing its donations and hiding its money from tax laws. This ex-employee was a senior portfolio manager at the church owned organization, "Ensign Peaks", an organization responsible for investing a portion of the church's funds. According to Nielson (the name of the former employee), the church gives about $1 Billion a year for Ensign Peaks to invest--and it sounds like they're doing a good job at it! Since 1985, Ensign Peaks, has amassed about $100 Billion! So it sounds like they're doing exactly what they're supposed to be doing.

So, what are Nielson's complaints? Well, according to him Ensign Peaks broke IRS tax-exempt law because it has not donated to any charitable causes. Instead, he claims, that Ensign Peaks has only ever used funds from the $100 Billion twice--both times to bail out church owned for-profit businesses (which DO pay taxes by the way, and are usually funded by non-Tithing funds if I'm correct). Because how dare the church try to stop thousands of families from losing their jobs? Also, these payments were disclosed by the receiving businesses and have reportedly been on public record since 2009. So, no, those payments were not "hidden". Also, those businesses payed back Ensign Peaks later on--which shows that the bail outs were successful in keeping those businesses afloat, meaning that thousands of families did NOT lose their jobs.

But what about the $100 Billion? Surely it should be taxed, right? Well not according to federal tax law. According to this article here, the money Ensign Peaks has stored up is tax-exempt because "Ensign is not a private foundation. It is an integrated auxiliary of a church." Simply put: Ensign Peaks does not need to pay taxes because it is owned by the Church--and the church does contribute (a lot!) to charitable causes.

So, that means the church, and Ensign Peaks, has not broken any laws. Therefore, the only other "issue" is the $100 Billion itself. Some are shocked to see such a large number (I'm honestly surprised it isn't higher). "Doesn't that mean the church is lying about what it uses tithing for?" some have asked. Well, no. The church has stated in General Conference (for the entire world to see) multiple times that a portion of church donations are invested in stocks, bonds, etc. This is in accordance to the doctrine taught by the parable of the ten talents (taking 10 talents and turning it into 20). Also, according to the "whistleblower" themselves the church spends approximately 85% of its tithing donations on maintenance costs, and the remaining amount goes towards investing. This means that only about one seventh of your one tenth is going to that $100 Billion nest egg. 

And, we know that $100 Billion is not being misspent because the whistleblower themselves stated that they only ever saw it be used on those two occasions I talked about earlier (both of which were justified by the church's mission to care for the physical well-being of its members, including employees of church-owned businesses). So, that $100 Billion, by the whistleblower's own admission, is NOT being used to give the church leaders golden toilets. It's literally just sitting there, multiplying. 

"But shouldn't that money be used to feed the poor?" It is. It's being used to feed the poor of the future. Think about it. The church teaches that we are in the middle of the end of times. Therefore, to be consistent with that belief, the church should be preparing for all Hell to break loose in the close future. Doesn't it make you feel safe knowing that the church has a huge nest egg for when the world comes crashing down? Isn't it comforting to know that millions of people will be blessed because the church had the foresight to save its money? Who do you trust more. A government that is trillions of dollars in debt, or a church that is saving up billions of dollars for no other purpose than to provide charitable help to victims of the coming apocalypse?

Sure, it sounds like a waste to an Atheist, but if you're an Atheist, then it's safe to assume that you don't donate to the church anyway. So, not your money, not your problem.

Let's give this former employee the benefit of a doubt and assume that he was just confused by the notoriously convoluted tax laws that exist in our country. In earlier comments I've made, I insinuated that he was only doing it for the IRS whistleblower reward money (which is a real thing the IRS does). But, I've realized that wasn't exactly fair of me. So, let's hope that this guy was being sincere, and was just wrong about the facts, and that he'll come back to the church after he's learned about his mistake.

Also, here's that link ("$100B In Mormon Till Does Not Merit IRS Attention" By Peter J. Reilley) again if you want to see what a tax expert has to say. He's not exactly friendly to the church, as he makes clear, but he does state that legally speaking, the church hasn't done anything wrong. Hopefully, I was able to show you that the church didn't do anything morally wrong. If you still have doubts or concerns, just contact me, and we can talk about it.