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More On The Mormon Ensigngate
The whistleblower allegation that Ensign Peak Advisors, has in its over 20 years of existence accumulated over $100 billion dollars in excess tithes and the investment returns thereon is generating some excitement. EPA is characterized as an integrated auxiliary of The Church of Jesus Christ of Latter-day Saints. I’ve decided to call the matter Ensigngate. We’ll see how that goes. I have expressed the view that there is probably nothing for the IRS to investigate. Still much of what Lars Nielsen, the whistleblower’s brother, has to say in his long video is worthy of attention and I agree with some of the reforms that he proposes.
The Washington Post Expert
I heard from Professor Phillip Hackney who was quoted in the Washington Post story: “`If you have a charity that simply amasses a war chest year after year and does not spend any money for charity purposes, that does not meet the requirements of tax law,’ Hackney said in an interview. Hackney, who served in the IRS chief counsel’s office, has been retained by The Post to analyze the whistleblower documents.”
I wrote to Professor Hackney citing my article and soliciting his opinion. I wrote:
“My thinking was that if it was an integrated auxiliary of the church it is really the church accumulating and there is really no rule about that. I consulted with a couple of people who should know and that seems to be the common view.”
He responded:
“Yes. I saw your piece. I actually generally agree with what you say. In some sense I think what we are witnessing is the asking and answering of different questions. Reality is the church likely has sufficient technical reasons to pursue the path it has pursued. But what I was being asked was whether the brothers raised legitimate concerns. I think they do and still think so…..
Now, Ensign will almost surely argue that it is an integral part of the church. Furthermore the church pays out lots of money every year from its tithing. If we view total expense in comparison to endowment if there were some payout requirement it would be met. That may be so and because of that the IRS would almost surely never challenge this situation. Nevertheless I do think that as a charitable tax law matter such an endowment that only ever invests money and never pays out raises real questions of the moral ought of the law. And I think that has to be the case even with a church…
I thought when I reviewed the WB complaint it would be a nothing. In a very technical sense I think it is a nothing. But, I still thought and think now that the brothers raised legitimate concerns worthy of raising attention to…..
So if the question is will the church lose its status, the answer is almost surely no. But if the question is whether the brothers raised real and legitimate questions that touch seriously on tax law in its largest sense, the answer is yes.”
Professor Hackney pointed me to Revenue Procedure 96-10 which indicates the sort of auxiliary organizations that share in the blessings of the church’s exemption from filing Form 990. Included is an organization that is exclusively financing, funding the activities of or managing the funds of a church.
That is not definitive, but it indicates that you don’t evaluate Ensign in isolation. And there is really no provision that blows up the exemption of a church because it has saved up too much money.
The Mormon Tax Professor
I also heard from Professor Samuel Brunson. He wrote a piece for By Common Consent. He notes that there are two bases for Ensign’s exemption. As a “supporting organization,” having the money going in but never going out is a problem.
There is this “commensurate in scope” test to be concerned about for a “supporting organization”.
If it is an “integrated auxiliary” though, it is a different story. Brunson wrote:
“There are no judicial or agency pronouncements I’m aware of applying the test to integrated auxiliaries. This is likely the first time this particular question has come up, at least to this degree. And, for what it is worth, under the Internal Revenue Code, integrated auxiliaries of churches are, like churches, treated differently from other tax-exempt organizations”
rest at link
https://www.forbes.com/sites/peterjreilly/2019/12/20/more-on-the-mormon-ensigngate/#623c86397f41
Top Insider Sales/Buys for Week ending 030607
Some of these are in the previous week but only filed this.
Sales
Institutional
Keurig Dr. Pepper sold by Mondelez International: $184.52m-Mar 4
https://www.finviz.com/insidertrading.ashx?oc=1103982&tc=7&b=2
Individual- Company Officer
Workday, Inc sold by CEO- Sr. fellow at Aspen institute too: $50.30m-Mar 3
muh option exercise at $1.30/sh and sale at $167.68/sh
https://www.finviz.com/insidertrading.ashx?oc=1196579&tc=7&b=2
Founder also sold as well: $50.10m-Mar 2
https://www.finviz.com/insidertrading.ashx?oc=938071&tc=7&b=2
Buys
Institutional
Delta Airlines bought by Berkshire Hathaway: $45.30m-Feb 27
https://www.finviz.com/insidertrading.ashx?oc=1067983&tc=7&b=2
Individual- Company Officer
Energy Transfer CEO bought: $45.80m- Feb 27-28
https://www.finviz.com/insidertrading.ashx?oc=1276191&tc=1&b=2