New tax on churches may affect the Church of Scientology

[CommunicatorIC]

New tax on churches may affect the Church of Scientology.

Politico: Republican tax law hits churches

https://www.politico.com/story/2018/06/26/republican-tax-law-churches-employees-670362

By BRIAN FALER 06/26/2018 05:05 AM EDT

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Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars.

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

That could force thousands of groups that have long had little contact with the IRS to suddenly begin filing returns and paying taxes for the first time.

Many organizations are stunned to learn of the tax — part of a broader Republican effort to strip the code of tax breaks for employee benefits like parking and meals — and say it will be a significant financial and administrative burden.

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The main benefits affected are transportation-related, like free parking in a lot or a garage and subway and bus passes. It also targets meals provided to workers and, in some circumstances, may affect gym memberships.

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The Church of Scientology may be forced to pay a 21 percent tax on some types of fringe benefits provided to Scientology leader David Miscavige, such as meals and parking.

One also wonders if the Church of Scientology will be forced to pay a 21 percent tax the the "fringe benefit" provided to Sea Org members of free meals.

Could housing also now be a taxable fringe benefit?

/

 

[TheOriginalBigBlue]

Where this might be helpful to COS employees is it would increase their income for reporting purposes and probably increase their social security credits with little additional expense to themselves or the COS.

Assuming Sea Org members get top rate of $50.00 per week (2600.00)
Meals $5.00 per day (2190.00) I think I read where it was $3.00 per day.
Housing $500.00 per month (6000.00) Lower for a military bunk sharing a room with 12 to 16 other people.
Parking 30.00 per month?? (360.00) As if many Sea Org members even have a car.

That would be $10,790.00 per year.

The minimum filing requirement for a single person under 65 in 2018 is $10,400.00. I'm guessing the COS could fudge the numbers to get them under the minimum reporting requirement but if a Sea Org member can report $10,400.00 instead of $2600.00 then I would think they will get better social security benefits.

This law may effect other organizations but considering how little Sea Org members are paid I doubt it will make much difference to the COS.

 

[Enthetan]

New tax on churches may affect the Church of Scientology.

Politico: Republican tax law hits churches

https://www.politico.com/story/2018/06/26/republican-tax-law-churches-employees-670362

By BRIAN FALER 06/26/2018 05:05 AM EDT

* * * * * BEGIN EXCERPT * * * * *

Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars.

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

That could force thousands of groups that have long had little contact with the IRS to suddenly begin filing returns and paying taxes for the first time.

Many organizations are stunned to learn of the tax — part of a broader Republican effort to strip the code of tax breaks for employee benefits like parking and meals — and say it will be a significant financial and administrative burden.

* * * * * END EXCERPT * * * * *

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The main benefits affected are transportation-related, like free parking in a lot or a garage and subway and bus passes. It also targets meals provided to workers and, in some circumstances, may affect gym memberships.

* * * * * END EXCERPT * * * * *

The Church of Scientology may be forced to pay a 21 percent tax on some types of fringe benefits provided to Scientology leader David Miscavige, such as meals and parking.

One also wonders if the Church of Scientology will be forced to pay a 21 percent tax the the "fringe benefit" provided to Sea Org members of free meals.

Could housing also now be a taxable fringe benefit?

/

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

 

[TheOriginalBigBlue]

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

Can we agree that to the extent that a tax payer isn’t paying their fair share of the costs for government services then a tax deduction is effectively a form of subsidy by the other tax payers? Why did we give these deductions to churches in the first place? I’d argue because as a society we felt this was a common interest. But that was when the society was mostly Christian and our understanding of the subsidy was to further Christian values.

I like the concept of “what’s good for the goose is good for the gander” when it comes to these kinds of issues. Like prayer in schools. It sounds great but if allowing Christian prayers in schools means allowing Muslim prayers in schools then I’m against all of it.

American Churches have made this bed and now they must sleep in it. In order to backfill declining membership and revenues they have formed alliances with groups whose fundamental goals are antithetical to Christian and traditional American values so why should we still subsidize them?

Churches have tolerated groups like Scientology for fear of having their own privileges undermined and they have adopted an open border policy because many of the illegal aliens coming in from the south are Christian. If they were smart they would work to make the IRS establish stricter standards for granting charitable status so the status maintained credibility in the eyes of the public and they would demand strict enforcement of immigration laws so they don’t become part of the larger Marxist strategy to destroy this country but they have done neither.

It’s time to take away their privileges and it’s time that there were stricter regulations over how religious employees are paid and treated. I think it is good that the IRS will be paying more attention to religious employee benefits because it is a start down this path. The world will be able to see how little a Scientology employee is remunerated. Next I hope they require that Scientology report how many hours they work and what they have to do to earn such a paltry existence.

http://www.breitbart.com/big-govern...-program-resettle-refugees-40-percent-muslim/

(snipped)

In FY 2015, the State Department, through the Bureau of Population, Refugees and Migration and the Office of Refugee Resettlement, spent more than $1 billion on these programs, which settled international refugees “vetted” by the United Nations High Commission on International Refugees in all 50 states and the District of Columbia. The federal government spent hundreds of millions of dollars more than that on refugees, however. The Department of Health and Human Services also provided a number of “entitlements” to these refugees.
Much of this $1 billion in annual revenue goes to voluntary agencies (VOLAGs), several of which are Christian non-profits, such as Catholic Charities, Lutheran Immigration and Refugee Service, World Relief Corporation, Church World Service, and Domestic and Foreign Missionary Service of the Episcopal Church of the USA. (also referred to as Episcopal Migration Ministries), who are contracted on behalf of the government to help these refugees get settled in their new homes in America.

(snipped)

As Refugee Resettlement Watch reported, there are multiple ways for these VOLAGs to generate revenue from this program:
a. $1,850 per refugee (including children) from the State Department.
b. Up to $2,200 for each refugee by participating in a U.S. DHHS program known as Matching Grant. To get the $2,200, the Volag need only show it spent $200 and gave away $800 worth of donated clothes, furniture, or cars.
c. The Volag pockets 25 percent of every transportation loan it collects from refugees it “sponsors”.
d. All Volag expenses and overhead in the Washington, DC HQ are paid by the U.S. government.
e. For their refugee programs, Volags collect money from all federal grant programs – “Marriage Initiative,” “Faith-based,” “Ownership Society etc., as well as from various state and local grants.
The program is so lucrative that in some towns the Catholic Church has lessened support for traditional charity works to put more effort into resettlement. It uses collection offerings to promote the refugee resettlement program.

(snipped)

 

[CommunicatorIC]

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

The Patheos article doesn't address the issue raised in the opening post of this thread. The Patheos artice addresses the tax liability of an individual minister:

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This particular case first got everyone’s attention last October. FFRF won a major court decision when U.S. District Judge Barbara B. Crabb agreed that the “Parsonage Exemption” was illegal.

That’s the loophole allowing ministers to deduct the cost of rent of their church-owned houses from their taxable income. (Christianity Today says 84% of senior pastors receive this exemption and it’s worth $20,000-$38,000 on top of their base salary.) It’s a major perk that also benefits megachurch pastors who live in mansions, but the problem is that atheist leaders can’t get access to the same benefits.

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In contrast, the new Tax Code provision creates new tax liability for the church itself, the organization:

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

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Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

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The Patheos article further explains:

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

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They were mainly trimming deductions companies have long taken for entertaining clients and providing meals for employees.

But Republicans also wanted to treat nonprofits equally, which proved challenging.

Because those organizations don’t pay income taxes, lawmakers couldn’t take away fringe-benefit deductions. So instead they created a 21 percent tax on the value of some of nonprofit employees’ benefits.

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[CommunicatorIC]

Where this might be helpful to COS employees is it would increase their income for reporting purposes and probably increase their social security credits with little additional expense to themselves or the COS.

Assuming Sea Org members get top rate of $50.00 per week (2600.00)
Meals $5.00 per day (2190.00) I think I read where it was $3.00 per day.
Housing $500.00 per month (6000.00) Lower for a military bunk sharing a room with 12 to 16 other people.
Parking 30.00 per month?? (360.00) As if many Sea Org members even have a car.

That would be $10,790.00 per year.

The minimum filing requirement for a single person under 65 in 2018 is $10,400.00. I'm guessing the COS could fudge the numbers to get them under the minimum reporting requirement but if a Sea Org member can report $10,400.00 instead of $2600.00 then I would think they will get better social security benefits.

This law may effect other organizations but considering how little Sea Org members are paid I doubt it will make much difference to the COS.

I could be wrong, but I don't think this will raise or effect the "income" reportable to the IRS for the purpose of the individual's income tax or Social Security contribution. The new Tax Code provision creates new tax liability for the church itself, the organization, and not for the individual:

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

* * * * * BEGIN EXCERPT * * * * *

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

* * * * * END EXCERPT * * * * * '

The Patheos article further explains:

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/


* * * * * BEGIN EXCERPT * * * * *

They were mainly trimming deductions companies have long taken for entertaining clients and providing meals for employees.

But Republicans also wanted to treat nonprofits equally, which proved challenging.

Because those organizations don’t pay income taxes, lawmakers couldn’t take away fringe-benefit deductions. So instead they created a 21 percent tax on the value of some of nonprofit employees’ benefits.

* * * * * END EXCERPT * * * * *

 

[Enthetan]

The Patheos article doesn't address the issue raised in the opening post of this thread. The Patheos artice addresses the tax liability of an individual minister:

* * * * * BEGIN EXCERPT * * * * *

This particular case first got everyone’s attention last October. FFRF won a major court decision when U.S. District Judge Barbara B. Crabb agreed that the “Parsonage Exemption” was illegal.

That’s the loophole allowing ministers to deduct the cost of rent of their church-owned houses from their taxable income. (Christianity Today says 84% of senior pastors receive this exemption and it’s worth $20,000-$38,000 on top of their base salary.) It’s a major perk that also benefits megachurch pastors who live in mansions, but the problem is that atheist leaders can’t get access to the same benefits.

* * * * * * END EXCERPT * * * * *

In contrast, the new Tax Code provision creates new tax liability for the church itself, the organization:

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

* * * * * BEGIN EXCERPT * * * * *

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

* * * * * END EXCERPT * * * * * '

The Patheos article further explains:

http://www.patheos.com/blogs/friend...-free-housing-for-religious-leaders-is-legal/

* * * * * BEGIN EXCERPT * * * * *

They were mainly trimming deductions companies have long taken for entertaining clients and providing meals for employees.

But Republicans also wanted to treat nonprofits equally, which proved challenging.

Because those organizations don’t pay income taxes, lawmakers couldn’t take away fringe-benefit deductions. So instead they created a 21 percent tax on the value of some of nonprofit employees’ benefits.

* * * * * END EXCERPT * * * * *

Doesn't David Miscavige reside in Church properties? This would make him pay taxes on the market value of things the Church provides for him.

And if he falsifies the actual fair market value, then he opens himself up to criminal penalties.

 

[CommunicatorIC]

UPDATE:

It appears clear housing benefits are not taxable. Further, the original Politico article was ambiguous, and it now appears that meal benefits are also not taxable. It appears only transportation, parking and athletic facility benefits are covered.

The Christian Post reports:

https://www.christianpost.com/news/...ew-tax-additional-filing-requirements-225399/

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"Tax practitioners who have evaluated Section 512(a) (7) generally believe that the result of this new provision is that tax-exempt organizations that provide parking to their employees will be subject to unrelated business income tax on the cost of the parking provided. A nonprofit organization that simply allows its employees to park in a parking lot or garage that is part of the organization's facilities will be subject to a tax on the cost of the parking provided," the Evangelical Council for Financial Accountability explained in position statement included in a petition seeking to repeal the provision.


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In turn, Section 512(a)(7) provides:

https://www.law.cornell.edu/uscode/text/26/512

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(7) Increase in unrelated business taxable income by disallowed fringe

Unrelated business taxable income of an organization shall be increased by any amount for which a deduction is not allowable under this chapter by reason of section 274 and which is paid or incurred by such organization for any qualified transportation fringe (as defined in section 132(f)), any parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)), or any on-premises athletic facility (as defined in section 132(j)(4)(B)). The preceding sentence shall not apply to the extent the amount paid or incurred is directly connected with an unrelated trade or business which is regularly carried on by the organization. The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this paragraph, including regulations or other guidance providing for the appropriate allocation of depreciation and other costs with respect to facilities used for parking or for on-premises athletic facilities.

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While the original Politico article, excerpted above, referred generally to "meals," the tax code section refers only to "any qualified transportation fringe (as defined in section 132(f)), any parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)), or any on-premises athletic facility (as defined in section 132(j)(4)(B))."

 

[TheOriginalBigBlue]

I would expect that if any benefit is determined to incur a tax liability for the COS that the COS would try to define it as employee income reportable on the employees return instead of a fringe benefit. Maybe the IRS just wants their money and they don't care if it's reported by the employee or the organization. My earlier point is that most COS employees make so little that the aggregate amount from personal returns would be virtually nothing as opposed to the organization paying a lump tax on it. Maybe the government anticipates this and won't allow it to be defined as individual income.

If it is mostly for transportation that is specifically not for "charitable" purposes, that again will not effect the COS very much because I don't think the COS provides much in the way of fringe benefits for non-organization transportation anyway. If anything most staff probably subsidize the COS with their personal transportation. That was my experience.

Now as for Miscavige taking a private jet for a gambling junket to Monaco, I'm sure they can figure a way to call that religious using Scientology sacred doctrine.

 

[BigBeard]

Rather than relying on the 'Politico' article, check the text of the bill itself:
https://www.congress.gov/bill/115th-congress/house-bill/1/text

All the fuss is about: SEC. 13304. LIMITATION ON DEDUCTION BY EMPLOYERS OF EXPENSES FOR FRINGE BENEFITS