Kenneth Copeland: My financial records belong to God

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Well, I don't know if the 'salary' being talked about was done through allowances or whether the CPA you talked to assumed a church would be the same as any other tax-exempt institution (which Martaug's post indicates it isn't), but I know the salary in discussion was tax exempt.

 

The difference as I understand it is that, while a church isn't required to withhold income tax or FICA from the compensation that it pays its ministers, the ministers themselves still have to pay taxes on their income. That said, it doesn't appear at all uncommon for churches to pay their ministers through a series of "allowances", so I don't doubt in the least what your brother is telling you about his compensation being tax-free.

 

Paging Snook, here I am.

1. Churches are strange entities in the US tax code. They are basically non-entities and do not have to file tax returns except for their unrelated business income. The majority of them have never filed a tax return and fly completly under the radar. To call them tax-exempt is almost incorrect as most tax-exempt entities are 501(c)(3) entities which are classified as "public charities". The IRS has a huge problem with all of this, but there isn't much they can do. In order to go after a church (or temple, mosque, etc.) they first have to prove that it really isn't a church. There are plenty of scammers who create phony churches and declare themselves the minister. This all brings us to point 2.

2. How are ministers (which includes rabbis, imans, preists, and anybody else who runs a group of worship) taxed. The salary paid to the minister is taxable. However, ministers also receive a "housing allowance". This housing allowance is treated as a "sole propertiership" on the ministers tax return. The amount they receive is the income. Now comes the great part. All of the ministers expenses to run their household are deductions against this income. This includes bascially everything in their life (mortgage payments, real estate taxes, food, supplies, repairs, clothing, and everything else that a claim can be made they need to do to run the household.

3. It doesn't take a genius to see, that most ministers get a very low salary, and as huge of a housing allowance as they can can squeeze out of their church. This is why this entire area is rife with fraud.

 

So at what point is it no longer Tax Evasion and straight up Fraud? It sounds as if Copeland is abusing his expense account, housing allowance and whatever else he milks his congregation for.

Makes me think that paid ministry is a bad Idea...

 

Exactly, and that is why the IRS always has fits as the religious organizations do not have to file returns and they have a very hard time proving anything. With a public charity the government has an interest in making sure that the donor's wishes are carried out. Since religous organizaitons are not public charities there really isn't anyone with the ability to look into it. Therefore if you lead your own church and convince enough people to give you enough money you can buy pretty much whatever you want tax free. There have been cases where people have bought islands and huge estates all for the express purpose of the minister's house and to run the operations.

 

I wonder how it is over here, I have actually no idea. Up until a decade or so ago the protestant church and the state were the same entity while there were still other churches. Now the old state church is officially separated and on it's own but it still own's like gazillions in land and property not to mention that you have actively leave it if you don't want to tithe them which means that they have the right to collect tithes as taxes and your default state is a paying member. You have to make a conscious decision to leave. It is completely screwed up.

Churches (religions) should just be viewed as profit seeking corporations and taxed and audited as such. Oh, if they were, wonder if they could be charged with fraud or at least misleading advertisement.

 

The tax privilege also exists in Germany. We don't tax churches, but we set the bar of what's a church much higher than in the US. Consequently Germany treats non-churches like a profit seeking enterprises. That is probably Scientology's biggest problem with Germany. That German authorities also view them as an exploitative cult and a security risk probably comes second. But I digress.

 

I believe that the onus should be on the church involved to prove that it is a charitable institution and therefore should be tax free. Sounds like the Germans have it down pretty well.

joacqin, how difficult is it to opt out of membership in that former state church you mentioned? I agree that the default setting should be a non-member, with people who desire to have their income given to the church being the ones who need to fill out forms, rather than the other way around. A sacrifice that someone else makes with your money without your express consent isn't really a sacrifice in the Biblical sense!

 

It's not that hard at all to get out of the Swedish Church; just fill in some papers and you're done with it.

 

Yeah, it isn't hard but it is something you have to actively do. It took me eight years to get around to it, did it just this spring, and I think most of you know my views about religion.

 

Unless the state church system is very different in Sweden (which I doubt since we got our system from them) I think the default setting is in fact non-member, however in practice all children are registered under the religion that their parents are registered in and because most if not all people have historically been member of the state church (or in our case churches since the Orthodox church also has a similar status) it is up to someone in the family to cut those ties. Neither of my parents are very religious but they are still members of the state church the same goes for me. I guess it's sort of a tradition to be a member even if you're not religious and it takes someone with sufficent conviction to break that tradition.