By David Waters
With her trademark purple bible in hand, Joyce Meyer of Joyce Meyer Ministries takes to the stage at a 2003 conference in Atlanta. Photo by Robert Cohen/St. Louis Post-Dispatch
Do you know how your church — or the megachurch down the street — spends its tax-exempt money? Do you know how much tax-exempt compensation your pastor receives or how he or she spend their money?
Shouldn’t you know? Shouldn’t the the government to find out for you?
Those are some of the intriguing and unsettling questions raised by a must-read staff review released last week by U.S. Sen. Charles Grassley (R-Iowa).
The 66-page report, filled with references to nearly every major religious figure in America from Billy Graham to Jerry Falwell to Rick Warren, concludes Grassley’s three-year investigation of six media-based, multi-million-dollar “ministries.”
The report draws no particular conclusions. And because Grassley’s tenure as ranking member of the Senate Finance Committee is ending, it’s unlikely the report will lead to significant changes.
Nonetheless, it should be required reading for every person who sits in a pew, stands in a pulpit, or pays the tax man.
Benny Hinn prays during a service at the Blaisdell Concert Hall in Honolulu on Jan. 11, 2002. AP Photo/Ronen Zilberman
Two of the controversial moneychangers cooperated with Grassley’s investigation: Joyce Meyer Ministries and Benny Hinn of World Healing Center Church.
Four did not (without consequences): Randy and Paula White of Without Walls International Church; Eddie Long of New Birth Missionary Baptist Church/Eddie L. Long Ministries; Kenneth and Gloria Copeland of Kenneth Copeland Ministries; and the aptly-named Creflo and Taffi Dollar of World Changers Church International/Creflo Dollar Ministries.
Paula White during a 2008 night’s service at her Without Walls International Church. Photo by Jason Behnken/Tampa Tribune
“The number and types of entities, including private airports and aircraft leasing companies, raises concerns about the use of (those organizations’) tax-exempt status to avoid taxation,” Grassley’s staff reported. “However, given the four churches’ refusal to provide tax information, we are unable to determine whether and the extent to which they are reporting and paying taxes on income earned in those entities.”
Grassley’s staff also got distracted by health-care reform and several other more pressing matters. So they didn’t nail (nor shame, apparently) any of the “prosperity gospel” moneychangers they went after. Too bad.
But they did address the larger issues.
“While the majority of churches and religious organizations operate with policies and procedures that make them accountable to their members, it is the small minority that don’t that are subject to scrutiny by the members and the public, the press,” the staff reported.
“These outliers present tax policy issues for consideration.”
Those issues should concern everyone.
In this June 18, 2003 photo, televangelists, (from left): Billy Joe Daugherty; Gloria Copeland; Kenneth Copeland; Charles Green; Richard Roberts; and Lindsay Roberts lay hands on Oral Roberts, 85, during the International Charismatic Bible Ministries conference in the Mabee Center at Oral Roberts University in Tulsa, Oklahoma.
Two of the most significant:
What is a church?
“Currently, anyone can set up an organization, call the organization a church, solicit tax-deductible contributions, and — unless the organization voluntarily applies for recognition of tax-exempt status or files annual returns – that organization will be invisible to the IRS and operate virtually without government oversight because no state requires religious organizations to register and file annual financial reports with the state attorney general,” the staff reported.
Under current tax law, religious organizations that are not churches are required to file IRS Form 990 and report their sources of income and expendutures annually.
Churches — and organizations deemed “integrated auxiliaries of the church” — are not required to do so.
“This lack of governmental, independent or denominational oversight is troubling when considering that churches can reach the size of large taxable corporations, control numerous taxable and non-taxable subsidiaries, and bestow Wall Street-size benefits on their ministers,” the staff reported.
The staff report paid particular attention to “Bishop” Eddie L. Long and his New Birth Missionary Baptist Church, Atlanta’s largest congregation with a membership of about 25,000. Its main tax-exempt campus “includes a $50 million, 10,000-seat sanctuary, a Christian school of more than 200 students, bookstore, computer lab, and the fully equipped Samson Fitness Center with racquetball and basketball courts and saunas.”
Bishop Eddie Long speaks Sunday, Sept. 26, 2010, at New Birth Missionary Baptist Church in Atlanta. AP Photo/John Amis, Pool
Among its tax-exempt “integrated auxilaries” is LongFellows Youth Academy. Last year, academy alumni filed suit against Long alleging sexual misconduct when they were minors. Long has denied the charges.
Long’s “ministry” has found other ways around the tax code, the staff noted. Long dissolved Bishop Eddie L. Long Ministries, Inc. (BELL) in 2002 and transferred BELL’s assets to Long’s church, the New Birth Missionary Baptist Church — “so those activities would not be subject to public scrutiny.”
Who is a minister?
According to tax law, “ministers of the gospel” are allowed to designate a portion of compensation as a housing allowance and exclude that amount from income.
Megachurch minister Rick Warren, for example, bought a house for $360,000 in 1992. In 1993, the church paid Warren $77,663, and Warren excluded the entire amount from his income as a housing allowance,” according to the report.
Other “ministers” claim the excemption on two or three homes. And many “ministers” who claim the excemption are not church pastors, but rather “ministers” for evangelistic organizations or church-affiliated ministries.
“The value of the parsonage and housing allowances is separate from the issue of who is a ‘minister’ eligible for the exclusion,” the staff reported.
“Some of the organizations reviewed by the Committee provide parsonage or housing allowances to family members and employees who may be deemed ministers solely to be eligible for the income tax exclusion. . . “
“Should the parsonage allowance be limited to a single primary residence or to a specific dollar amount?”
As J. Lee Grady, editor of Charisma magazine told Grassley’s staff, “Some pastors take advantage of a lack of denominational accountability to enrich themselves, churches . . . There are many independent churches out there today that are accountable to no one.”
What is a church?
Who is a minister?
Should all “churches” and “ministers” be granted special tax-exempt status? who should decide?