So You Say You’re a Church

And if you are, you are tax exempt, of course.

            But not so fast – over the years, many blokes of one religious persuasion or another have attempted to twist their facts into complying with IRS’ definition of a church.  Some haven’t quite passed muster – take the Foundation for Human Understanding for one.

            Seems this organization’s main function was to disseminate its religious message through radio, an “electronic ministry” on the internet, and written publications. 

            Very nice, said the Revenooers, but not good enough to qualify for tax exemption.  And the Court of Appeals for the Federal Circuit recently agreed, in noting that the Foundation’s good works actually didn’t satisfy at least one of the fourteen criteria for a “church” as set forth in the Internal Revenue Manual.

            The Court found that the Foundation did not provide religious services to an established congregation, and thus failed the “associational” test in not constituting a regular assembly of a cohesive group of people for worship.  Further, the Court didn’t buy the Foundation’s argument that its members regularly assembled to worship as a “virtual congregation” in an “electronic ministry.”

            So, pointing and clicking just doesn’t qualify as praying, we guess.

            And from the ongoing discussion over just what to do about the estate tax, we find curious the plea of Robert Rubin (of Clinton Treasury Secretary fame) and Julian Robertson in their recent Wall Street Journal tome.

            “We also share the view that the estate tax is grounded in powerful philosophical underpinning.  Our nation views itself as a meritocracy and a land of opportunity and we have a proud legacy of upward mobility.  An estate tax helps us promote this legacy, by avoiding the acumulation of inherited economic–and political–power that is antithetical to this historical vision of our society….”

            A bafflegab-laden bunch of trash if we ever heard one!  Upward mobility and meritocracy result in power antithetical to our vision!  Poppycock!  Tell that to the heirs of George Steinbrenner, whose net worth at the time of his recent death was estimated by Forbes at over $1 billion, and whose kids would have kissed some $600 million of that sum good bye had the estate tax not lapsed in 2010.

            Further, as noted in a recent Wall Street Journal analysis of the fiasco created by Congress’ dalliance in not addressing this impending mess, which has been brewing for a decade, what’s going to happen come this New Year’s Eve, as potential heirs contemplate whether or not to pull the plug on an ailing Mom or Dad in the knowledge that if life hangs on into 2011, the tax man will clip the family for an untold quantity of shekels? 

            Yet another bad result from “do nothing” politicians.

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

            Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He is also a contributor to the recently published 13th edition of Tax Savvy for Small Business, published by Nolo.  He can be reached at 831-7288, and welcomes comments at below.

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