- $5 million in fines, for<p>- 22 years of willful reporting violations<p>- using 13 shell companies<p>- to conceal ownership of a $32 billion portfolio<p>I'm sure they're gutted by this ~0.016% fine.
I think we really should be looking at the tax-exempt status of religious organizations have that subsidiaries that are doing their taxes and setting up shell companies to hide where money is coming/going.
Here's a related random fact: Fidelity, the well-known investment firm, runs donor-advised charitable funds for rich clients that in aggregate constitute America's charity [1]. The three largest recipients from those funds? Harvard University, Stanford University, and the Mormon Church...organizations that aren't in any way hurting for money. I guess people fund what they are familiar with and for prestige.<p>1- <a href="https://www.bloomberg.com/news/features/2022-11-21/how-fidelity-investments-built-america-s-biggest-charity" rel="nofollow">https://www.bloomberg.com/news/features/2022-11-21/how-fidel...</a>
The Church's statement:<p><a href="https://newsroom.churchofjesuschrist.org/article/church-issues-statement-on-sec-settlement" rel="nofollow">https://newsroom.churchofjesuschrist.org/article/church-issu...</a>
Devout member of this church my entire life. 2 years ago during covid I finally read most of the history of Joseph Smith. Found out it’s a fraud and left.<p>For having Jesus Christ in its name, I have a hard time believing Jesus is running the board of this corporation and is suggesting billions be spent in investments instead of billions feeding, clothing, housing, and providing healthcare for those in need.<p>And don’t tell me about their humanitarian efforts. A fraction of their wealth is used on such endeavors.<p>End of the day, all their leadership cares about is wanting the whole world to volunteer their free time to the local congregation, pay tithing, and do temple ceremonies. Next time you meet a Mormon, ask them to clearly draw a line to what they do in the temple regularly and why that’s what Jesus wants them to do. You’ll see them hit the cognitive dissonance wall.
One question I had while reading this:<p>- Should non-profits be allowed to "invest" their tax-exempt donations?<p>It seems that non-profits should obtain their funding through grants or donations. Investing, on the other hand, seems like the opposite of "non-profit"<p>As a personal aside, I've recently been introduced to a few folks who seem to be doing extraordinarily well financially. It turns out that they all run "non-profits." And not just any non-profit, but firms that were started by their parents.<p>Question for everyone: I'm not nearly as aggressive about finding tax deductions as I could be. Am I just a suck here?
There's a section in Bloomberg's Matt Levine column about this. That's useful to understand what they were doing with the shell companies.<p><a href="https://www.bloomberg.com/opinion/articles/2023-02-21/amc-apes-hate-amc-s-apes" rel="nofollow">https://www.bloomberg.com/opinion/articles/2023-02-21/amc-ap...</a>
Some info about how the Church of Jesus Christ of Latter-day Saints uses its donations:<p><a href="https://newsroom.churchofjesuschrist.org/article/humanitarian-aid-welfare-services-breakdown-donations-costs-resources" rel="nofollow">https://newsroom.churchofjesuschrist.org/article/humanitaria...</a><p>I suspect most of its investments are targeted towards the same ends.
At this point regulatory fines are just a cost of doing business, same as the break room coffee maker or printer paper.<p>Fines need to be 150% of the maximum benefit of the infringement.
For context every 6 months there’s a report on the first day of what’s called the General Conference where church leaders address the wider Church and the in house auditor says that all things are fine and proper with respect to accepted accounting principles. :shrug:
My friends and I that meet weekly (on Sunday) for a potluck that has been going on for over a decade were joking about starting our own religion (turns out we meet a number of the IRS requirements already and the remaining things would be easy to create). Clearly the enforcement of corruption (which we would have no intention of doing) is next to zero and having a real "religion" is a joke so maybe we should go ahead and do it...
A "religion" primarily assumes standard Christianity, Judaism, Islam, Buddhism, Sikhism, etc: all of which have buildings, assets, collections, and such.<p>For those of us who either have a solitary practice or meet with a small group (coven), none of our costs for our practices are tax exempt. If we are large enough, we usually cannot be "acknowledged by the state" to get tax exempt status. When we do get enough people in our group, it's an uphill slog to even get acknowledged as 'real', although there are few and far between covens which have won what the Christians get already.<p><a href="https://lawprofessors.typepad.com/nonprofit/2011/03/witches-and-tax-exemption.html" rel="nofollow">https://lawprofessors.typepad.com/nonprofit/2011/03/witches-...</a><p><a href="https://nonprofitquarterly.org/pagans-weigh-in-on-the-laws-of-religious-nonprofits/" rel="nofollow">https://nonprofitquarterly.org/pagans-weigh-in-on-the-laws-o...</a><p><a href="https://www.timesunion.com/local/article/Court-considers-neo-Pagan-s-tax-exemption-case-5838168.php" rel="nofollow">https://www.timesunion.com/local/article/Court-considers-neo...</a><p>Basically, the Christians get away with using tax exempt status, and then populate things like "megachurches" (aka: church-based tax fraud). Those of us with less common beliefs are given the short shrift, and default treat our beliefs as "not worthy of federal and state tax exemption".<p>When the IRS and state tax entities start playing games of discerning which belief is real and not, is a grave concern for 1FA. The state should never be in the business of saying whose beliefs are real or not.
> According to the order, the Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences.<p>If you don't report your trades or positions, you can insider trade all day to your hearts desire, or in this case by the hand of God Almighty
Curious. At $32B, the LDS church controls more than virtually all US university endowments -- with the only exception being Harvard.<p><a href="https://nces.ed.gov/fastfacts/display.asp?id=73" rel="nofollow">https://nces.ed.gov/fastfacts/display.asp?id=73</a>
I'm sure discussion will rapidly turn into only the most correct opinions about religion or capitalism in general.<p>However, specifically, a form 13-F is a mandatory report for (mostly) mutual funds and similar institutional investors to report in public whatever strategy they're using for investment by dumping a quarterly balance sheet (gross simplification please don't shoot the mostly accurate messenger).
Only mutual funds are not permitted privacy when investing, because I donno. You and I do not have to publish our stock ownership (unless you or I are mutual funds)<p>There's a lot of static about the 13F because the reporting interval is too long for short term investment and too short for long term investment so as a regulatory tool it's quite useless and eliminating the entire thing wouldn't really change anything in the market for anyone. Its one of those bureaucracy tax things that we can't get rid of because it makes the middlemen money and provides a barrier to entry for smaller operators while not actually providing any useful service to anyone other than some jobs.<p>Hilariously I can't recall any 13F related stock scams over the past couple decades. Every ponzi or fraud in the last couple decades has been accompanied by completely useless 13F filings. My understanding is this form of busywork is very handy to publicize aggressive regulatory activity while not actually regulating anything. Great job SEC, at making sure Madoff and FTX filed their completely useless 13F forms. Thank God the SEC was busy enforcing 13F filings while ignoring what was going on at FTX.<p>Part of the justification for the fines being miniscule is there's not really much point to the entire process. Not filing a 13F is right up there with smoking weed WRT being a victimless crime.<p>I don't understand the point of the 13 shell companies because if they were actually trying to conceal information they'd have created somewhat over 330 shell companies to stay under the $100M reporting limit as I understand the entire portfolio is worth $32B. So clearly they're not "up to no good" or if they are, they're unimaginably incompetent. The press is doing the usual propaganda spin on the shell companies which is pretty funny to the people of some financial sophistication (which is probably approx none of the general public). My guess is the "shell" companies are some kind of legit strategy that failed. If you reorg to try to get outside investment using tighter categories, but your sales team is crap, resulting in minimal new investments, technically that reorg can make you a financial criminal under some weird circumstances. Thanks SEC, doin a great job keeping us safe!
A Mormon leader, L. Tom Perry said this years ago (<a href="https://www.churchofjesuschrist.org/study/general-conference/2000/10/discipleship?lang=eng" rel="nofollow">https://www.churchofjesuschrist.org/study/general-conference...</a>) in a religious address:<p>"My mother was a great delegator. Each Saturday morning as my brothers and sisters and I were growing up, we received housecleaning assignments from her. Her instructions to us had been learned from her mother: “Be certain you clean thoroughly in the corners and along the mopboards. If you are going to miss anything, let it be in the center of the room.”<p>She knew very well if we cleaned the corners, she would never have a problem with what was left in the center of the room. That which is visible to the eye would never be left unclean.<p>Over the years, my mother’s counsel has had enormous application to me in many different ways. It is especially applicable to the task of spiritual housecleaning. The aspects of our lives that are on public display usually take care of themselves because we want to leave the best impression possible. But it is in the hidden corners of our lives where there are things that only we know about that we must be particularly thorough to ensure that we are clean."<p>---<p>It seems like they took the exact opposite approach. Secret, backroom dealing to hide how much money the faith had to avoid scrutiny over what they are doing with this money. It is to avoid accountability to their own members and the world at large. And it's not surprising that they do this, when they demonstrate almost no accountability to their members when it comes to transparency because members have been lulled into a "god is at the helm, don't worry about it" mentality.<p>The tax exempt status of religious organizations is an enormous investment that the United States created. I could see at some point that being a worthwhile investment. There are many organizations that do a lot of good. But is that the current dynamic? Is that investment of the USA getting a good return if you consider how many religious organizations hoard the wealth they accumulate, enrich their leaders, and the community they operate in gets very little in return. I helped a member of the LDS faith with some bills last year. These people have paid 10% of their income to their faith for years. I asked them why they asked me for help and not their faith. They said their local leader said they were unwilling to help them with certain bills.<p>So society is subsidizing the LDS faith with tax benefits in the hope that they do tremendous good, but instead we get hidden finances to avoid scrutiny, and members (not always, but often) not being able to rely on them as a safety net in tough times. There are, of course, times they can rely on them. But overall, does the tax exempt status of religions make sense? Are we getting the return on investment that we hope from this decision to not tax them?<p>I do not believe we are.
Watching the Tabernacle choir sing at Trump's inauguration was the act that broke my faith in the church. Since then, I've come to see the church as just another corporation. Too bad the corporation isn't governed by their own scripture, what with the "render unto Caesar that which is Cesar's" thing and whatnot.<p>From the articles of faith (canonized LDS scripture):<p>12 We believe in being subject to kings, presidents, rulers, and magistrates, in obeying, honoring, and sustaining the law.<p>13 We believe in being honest, true, chaste, benevolent, virtuous, and in doing good to all men; indeed, we may say that we follow the admonition of Paul—We believe all things, we hope all things, we have endured many things, and hope to be able to endure all things. If there is anything virtuous, lovely, or of good report or praiseworthy, we seek after these things.<p>Everyone is playing the game of power. Some people are really good at it.
Nearly every Baptist church/preacher I have seen explicitly endorsed Donald Trump in 2020, and calls Joe Biden an election thief (or one of a dozen other conspiracies).<p>My understanding is that this is in direct violation of their tax-free status [1]. Maybe we should actually start enforcing this.<p>[1] <a href="https://www.irs.gov/newsroom/charities-churches-and-politics" rel="nofollow">https://www.irs.gov/newsroom/charities-churches-and-politics</a><p>EDIT:<p>I couldn't remember the name of the thing that states this, but here it is: <a href="https://en.wikipedia.org/wiki/Johnson_Amendment" rel="nofollow">https://en.wikipedia.org/wiki/Johnson_Amendment</a>
anti-Church pitchforks come out pretty fast here? it shows that some people simply want to eliminate Church itself, and use bad news to propel that point of view.<p>why not address the actions themselves, specifically; plenty of crooks in the investment game, some of them use Church money it seems.
There should no longer be tax-exempt status for religious organizations that have committed so many violations for so many years. In fact I think there should be stipulations if you want to be tax exempt, like you have to have all of your finances be public so the people who give to your organization know exactly where the money is going.