Congress should review the tax-exempt status of “prosperity gospel televangelists” engaged in jet envy and other largess at the expense of the gullible and the poor.
Comedian John Oliver of HBO’s “Last Week Tonight” has launched a scathing attack on televangelists who use “seed faith” to maintain “that wealth is a sign of God’s favor and donations will result in wealth coming back to you.”
Earlier this year, Creflo Dollar brazenly implored his followers to buy him a $65 million Gulfstream G-650 luxury jet until critical news reports surfaced. Michael Murdock bragged that he bought two private jets with cash. Kenneth and Gloria Copeland maintain their private jet is a “preaching machine,” albeit one used to travel to luxury ski resorts and to hunt in India. They reside in a $6 million “church parsonage.”
Oliver mocked the televangelists by founding his Our Lady of Perpetual Exemption Church, displaying crates filled with money (for Doctors Without Borders) and bags of “faith (grass) seed.” He blamed the Internal Revenue Service for lax oversight, noting its Tax Guide for Churches and Religious Organizations is overly broad, omitting a definition for “church.”
But the issue is more complex, involving politics, the courts and the separation of church and state.
Peter Reilly, a certified public accountant, wrote in Forbes magazine that a General Accounting Organization report concluded the IRS has its hands tied by circuitous statutory requirements — and a U.S. district court decision — to determine if “an excess benefit transaction” has occurred. Under Code Section 508, he noted, churches need not apply for exempt status; it’s a self-designation.
The Trinity Foundation, which tracks religious fraud, worked for three years beginning in 2007 with the staff of the Senate Finance Committee, then chaired by Sen. Charles Grassley, R-Iowa, to investigate egregious abuses of the church tax exemption.
Deborah Bortner, former president of the North American Securities Administrators Association, told the committee, “I’ve been a securities regulator for 20 years, and I’ve seen more money stolen in the name of God than in any other way.”
Not surprisingly, the staff received considerable blowback from religious broadcasters and others. It recommended “a federal advisory committee for churches and religious organizations would hopefully result in a proactive and collaborative approach to compliance with federal laws.”
The committee opted for the Evangelical Council for Financial Accountability to self-police the activities and confer a “Good Housekeeping seal of approval.”
“Self-correction can be more effective than government action,” Grassley said. “It’s something that’s worked with other entities I’ve looked at.”
But not so much in this instance. When Grassley wrote six media-based ministries with questions about their activities, few answers were forthcoming. Among those failing to completely comply were the Copelands and Dollar.
“The number and types of entities, including private airports and aircraft leasing companies, raises concerns about the use of the church’s tax-exempt status to avoid taxation,” the staff stated. “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.”
Oliver is not against tax exemptions for churches but for those who “exploit people’s faith for monetary gain.”
“There are roughly 350,000 congregations in the United States, and many of them do great work feeding the hungry, clothing the poor,” he said.
The staff report gets it right: “The U.S. Constitution does not distinguish churches from other religious organizations. … The word ‘church’ does not appear in the Constitution; the First Amendment refers to ‘religion,’ not ‘church.’”
“The tax exemption,” it added, is “a privilege, not a constitutional right. … A sound tax system requires accountability from organizations that receive special tax benefits such as exemption from federal income tax.”
We concur. Given this state’s status in the presidential selection process, Iowans have a unique opportunity to quiz candidates about the tax-exempt status for those who would buy luxury jets and mansions by bilking the gullible under the guise of being a church.