Wednesday, April 06, 2005
IRS to target religious
nonprofit "ministries" - part 1
Last year Christian Headlines reported
that the IRS had launched an investigation into 2000 nonprofit organizations.
This week Internal Revenue Commissioner Mark W. Everson addressed the Senate
Finance Committe about about his organization's findings. He also presented the
committee with a 14-page letter presenting an overview of the investigation.
From the letter (emphasis
added):
A corporation sole is an entity authorized under certain state laws
to allow religious leaders to hold property and conduct business for the benefit
of a religious entity. The leader may incorporate under state law in his
capacity as a religious official. A
corporation sole may own property and enter into contracts as a natural person,
but only for the purposes of the religious entity. Title in property
that vests in the officeholder as a corporation sole passes to the successors in
office, and not to the officeholder's heirs. The purpose of a corporation sole
is to ensure continuity of ownership of property dedicated to the use of a
religious organization.
The corporation sole form of
organization serves a valid function for legitimate religious entities. However,
some promoters are urging use of corporation
sole statutes for tax evasion. Individuals incorporate under the
pretext of being a "bishop" of a religious organization or society. The idea being promoted is that the arrangement
entitles the individual to exemption from Federal income taxes as a nonprofit,
religious organization described in section 501(c)(3). The position is utterly
without merit."
Stayed tuned. This week Christian
Headlines will have more news to report on several televangelists and excessive
compensation practices.
