Friday, February 4, 2011

What Is A Church?

Another consequence of the Reformation is that the answer to this question is up for grabs in most circles. The nasty part is that it looks like the government might try to formulate a response.

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 Post says that this report is unlikely to lead to changes. I'd say the Post is overlooking the fact that the government is flat broke and looking for ways to bring in cash. Let's look at some of the verbage from the report.

"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.

First Issue:

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.

No, what's troubling is that the government is asking this question. It's already enough that the current regulations essentially handcuff bishops and priests from speaking the Truth to the political masses. Now, we've got this going on.

Second Issue:

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."

Yeah, tell us something we don't know, J. Lee. A lot of folks reading this post might think I'm over-reacting here. After all, the main focus of the report's contents are the Copelands and Whites of the world. Don't let that give you any security. They will be the foot in the door. Then, we'll be next. In fact, I'd be willing to bet that any major scrutiny of these mega-church folks will be DOA. They have a national following in many cases. They are on TV a lot. Barring a Swaggart or Bakker sort of scandal, I can see them rallying enough support to suppress something like this. I don't see that happening for Catholics. That sucks, and says a lot about my current cynicism regarding the Church and the world, but it seems way too probable for me to even want the door opened for such actions.


Peter Reilly said...

The question of what is a church is frequently ruled on.

There is a fourteen factor test. The most troubling part is that Jesus and the apostles probably would not have passed.

Throwback said...

Interesting. This is even weirder than the Lemon test.

Thanks for the observations.