Korihor and Alma go into a bar...

In the earliest days of the LDS Church, a large contingent of the membership came from the United Kingdom and Scandinavian countries like Sweden.  Brits and Swedes (and Danes) were a big reason why the church is what it is today.  And I believe, they are to become the catalysis of what the church will soon become.  It appears that Europeans are leading the way to vast changes which will be thrust upon the church as it reforms in the Internet age.   Some of this was seen in the recent Swedish Rescue and in the most recent Proclamation to the First Presidency by former bishops and stake presidents in the UK.

See these links for more details.
http://www.mormonthink.com/swedish-rescue.htm
http://stevebloor.wordpress.com/2012/12/21/proclamation-to-the-first-presidency-quorum-of-the-twelve/

I believe these same groups have a second chapter to add to this reformation tale.  But before I get to that, I want to comment about...well, some of your comments to me.

In the past few weeks I have received many positive messages for the release of the Mission President’s Handbook, and particularly discussions on the way the church asks the presidents not to disclose the reimbursements.  However, several readers, some former close friends, have had some negative comments.  Some tell me that I revealed nothing new—that members have known the Mormon clergy receive “modest stipends” and “necessary living expenses”.  I was asked: How could I expect them to work full time in the church service and not be compensated for their living needs?  Some even told me that I have become such an anti-mormon that in fact, my acts are practically anti-christ.  One even called me a Korihor.

I looked up the Book of Mormon story in Alma 30, relating the verbal melee between the prophet Alma and his critic Korihor.  A few particular verses struck me (Alma 30:31-34)

“And [Korihor] did rise up in great swelling words before Alma, and did revile against the priests and teachers, accusing them of leading away the people after the silly traditions of their fathers, for the sake of glutting on the labors of the people.  Now Alma said unto him: Thou knowest that we do not glut ourselves upon the labors of this people; for behold I have labored even from the commencement of the reign of the judges until now, with mine own hands for my support, notwithstanding my many travels round about the land to declare the word of God unto my people.  And notwithstanding the many labors which I have performed in the church, I have never received so much as even one senine for my labor; neither has any of my brethren, save it were in the judgment-seat; and then we have received only according to law for our time.  And now, if we do not receive anything for our labors in the church, what doth it profit us to labor in the church save it were to declare the truth, that we may have rejoicings in the joy of our brethren?”

This is the test that the Book of Mormon creates for honest motivations of the clergy.  If they do it of their own, without compensation, then it what does it profit a prophet to spend his life declaring the truth?

Indeed.  If it is shown that the prophets, apostles, seventy or mission presidents are paid even one senine (whatever that is), would this mean they just might have ulterior motives?  Perhaps not.  What if they receive a million senines?  What about fancy homes in gated communities paid for by the corporation of the presiding bishopric?  Expensive automobiles with armored protection at the courtesy of LDS secret security?  What if the church pays their debts and gives their family forgivable loans?  If the top leadership were found engaged in criminal behavior, would that cause members to pay a little more attention to what Korihor had to say?  

In the coming weeks, Utah government may be presented with what some see as scandalous behavior by members of good standing in the highest places of their state offices.  (For a hint of the background, see http://www.adventure-journal.com/2012/03/utah-governor-wants-to-take-over-federal-land/ and this Desnews article)  There are some members who may see the apparent illicit land-sell-off as unbecoming of a semi-high ranking Mormon.  What if the highest leaders of the church have engaged in highly questionable real-estate transfers for years?  The outrage coming for UT government leaders might be eclipsed when other revelations of the religious leaders are unveiled.  

Until then, however, we already know that in foreign countries, the kind of tax-evading behavior advocated in the Mission President’s Handbook is very likely illegal and may bring criminal charges against individual LDS leaders in the coming year.

On the one hand, the Catholic Church “received a generous early Christmas present from European Union chiefs with the announcement that illegal tax exemption (on Italian property tax) from 2006 to 2011, which saved the Catholic Church billions of euros, will not have to be paid back.” (http://www.independent.co.uk/news/world/europe/eu-lets-catholic-church-off-its-billioneuro-tax-bill-8426163.html )  However, it was always known that the Vatican claimed these exemptions on its properties.  They, presumably, didn’t hide the information, they just disputed that they should be billed for the tax since they are a “church” even if the properties under question had established commercial enterprise.  The EU is taking a pragmatic view of what would be a very difficult collection operation if it were to force the Catholic Church into past compliance.  They forgave the past, but will be steadfast in collecting the taxes here out, if my understanding is correct.

On the other hand, the MP Handbook clearly outlines, in what is meant to be a secret guideline, that they will evade taxes by never disclosing the amount of money paid to the mission presidents, by using a church-controlled bank account, and relying on the MP to remain silent, even to tax advisers, about the pay outs.

There are at least two European countries where the tax law is very clear about reimbursements being taxable: The UK and Sweden.   The church is, apparently, not paying these (mission presidents are not filing these, believing the church does it for them, but the government filing records seem to be missing these incomes).

The UK collects income tax and payroll taxes.  The following UK Tax document (http://www.hmrc.gov.uk/worksheets/sa102m-notes.pdf) outlines what can and what cannot be excluded from “ministry” taxes and income.  It lists “gifts and grants”, “stipends”, “Personal expenses paid for you, living accommodation, vouchers and credit cards”, and “Vicarage or manse expenses” among many other items in its 10 pages.  The latter “Vicarage or manse expenses” is listed as utilities, home (manse) costs, gardening, etc.  These are the very types of things listed by the MP Handbook as being reimbursed. 

In Sweden, the tax law requiring these reimbursements be taxed has been around for many years, but in 2012, the Jehovah Witnesses challenged the law (decision made by the Swedish Skatterättsnämnden  Court on 30 April 2012). The Supreme Administrative Court (Case No. 3330-11) established taxes to be paid on simple free housing, reimbursed meals and a small cash amount of SEK 1,000 per month to cover other private expenditures.  I’m told by a person who works with the Swedish Tax Authority that, regarding taxes, “the crucial point is that the person gives any kind of labor return to the religious organization who hand out the cash or benefits...The only time one can receive benefits or cash and not being taxable income is when one lives a simple monastery life without any labor return to the giver.”

At this time, a challenge is already placed with the UK HM Revenue & Customs authority. The church apparently has a UK company (or several of them) which states it acts for the US-based church on transactions for its missions.  Remember, however, all LDS businesses are owned under two sole-corporations: The Corporation of the President of the COJCOLDS, and The Corporation of the Presiding Bishopric of COJCOLDS.  If and when criminal tax evasion charges are made by the UKHMRC, it just may go to the prophet (or presiding bishop) himself, as sole corporate owner.  The same should happen in Sweden, where our fellow members may act on the same charges and tax rules.

In the US, the situation is a little more difficult.  The IRS leaves well established churches alone.  However, if clear evidence of secretly funding of personal clergy (i.e., apostles) to the tune of millions in real-estate or other dealings were shown, then the IRS would have to take notice.  

Stay tuned.  2013 may be a new year for the Mormon moment.

The Disney-ish Polynesian Cultural Center, LDS owned amusement park 

Acting expeditiously

Quick post.  I think most of you understand the implication of this official, under penalty of perjury, expeditious letter.  The MP Handbook is confirmed authentic and is clearly dictating official policy of the LDS church.

Sorry so large, but I wanted the full resolution so it can be easily read.

The Lord is Shredding it on his mountain!

One can bet after the last blog on revealing the Mission President's Handbook and more, the document shredders in hidden offices of SLC are burning through their paper mulching motors. Computers are being erased and other items lost to who knows where.  Why? Because the secrets are getting out.

First, I received an email from archive.org stating:

Hello,
Access to the item at http://archive.org/details/2006LdsMissionPresidentsHandbook has been disabled following receipt by Internet Archive of a copyright claim issued on behalf of the Church of Jesus Christ of the Latter-Day Saints.
If you have questions about the claim or would like to review its verbiage, please let me know.
Best,
Ch**sto**er B****
www.archive.org

The file of the MP Handbook is gone, and in its place is simply "The item is not available due to issues with the item's content."

Do not despair.  It is was linked here, but taken down due to the very official letter from LDS inc demanding it be removed. I believe it will be on wiki-leaks or other file-sharing sites soon enough.  The new file is a smaller, cleaner, higher quality copy than the poorly done one that LDSinc claimed copyright over to have removed.  Hydra is new and improved.  

That said, what we are learning along the way is getting more interesting.

Earlier I speculated that the salary of the top GAs can be inferred from corporate wikis and other documents.   Some Utah State documents have come to shine a light on the salary and benefits of the GAs.


Example:  Beneficial Life
http://www.beneficialfinancialgroup.com/financial_information.html

The state of Utah examines insurance companies which provide coverage to state or other officers of the governments.  In this case, they examined Beneficial Life Insurance, owned by the LDS church corporation.

http://www.insurance.utah.gov/docs/BLIC_Fin12-31-07.pdf

There may be many gems found within this, but by my unsophisticated glance, I see Beneficial has Stocks and Bonds as well as Real estate holdings, cash, etc that were worth about $3.5B at the start of 2008.  Also  a few GAs or family of GAs such as a Hales and Paul Evan Hill work in top leadership.

We also know that Hinckley and Monson at one time have served on the board of this (parent) company, per this video.
http://www.youtube.com/watch?v=OzldUAG4Ygs

Another gem I believe taken from the Utah report is that the "Transactions with Affiliates" lists several offices of the GAs, including the first presidency who "indirectly controls the Company by virtue of its power to appoint the trustees..."

It is clear the board and officers would enjoy the benefits of the policies, which gives pay out at death to them by age of Half-Million dollars if under 81 years.  Usually these kind of benefits are tied with salary & compensation at the institution.

In fact an earlier Utah state report said just this.

http://www.insurance.utah.gov/docs/DMIC_Fin12-31-00.pdf
From Page 7.

"Accident and Health: Limits:
General Authority (medical and dental) Unlimited
Senior Service Missionary Plan $1,000,000
College Student Plans (basic and catastrophic coverage combined) 120,000
Church Activity 15,000
l.i.A. Disability & Medical Coverage Based on salary
Life:
General Authority 266,000"

Based on salary, over a decade ago, the General Authorities of the church were receiving policies of more than a quarter million dollars. That policy was up to half-million in 2007, and one wonders what it is in 2012.  Their salaries are rising faster than CEO salaries...

It is interesting that the health of a GA was unlimited while the commoner member was covered by $15,000.00 for church activities.  The Haves and Have nots of Missionary Presidents and Missionaries is made clear again in the Have of GAs and incredibly lowered $15k for the average have-not member, including a bishop. This is how God sorts them in the celestial kingdom on earth.

Another aspect of the salary--oops, reimbursements--oops, forgiven loans that GAs are probably receiving and indicate how the tax laws could apply.  More than even Romney using the CRUT deferred tax shelter the "unpaid" and "forgiven" loans given to the directors and trustees of LDS Inc are another way for these spiritual LDS executives to go around, over, under and through the tax law in order to keep their money without rendering to Caesar what belongs to Caesar.

These "loans", even if they could be detected by the IRS, would probably be taxable at the highest rate, and also if not properly documented, would be direct evidence of tax evasion (not to be confused with tax avoidance or a tax shelter). If this weren't a church, then individuals on a company board which offered stock publicly would have considerable legal problems for loaning money to executives.   If ever it is determined that the Apostles, for example, were "loaned" a million dollars the day they started their calling, and that money were to come from church companies or tithing, the IRS and membership hell they'd pay would come with bars on the windows.

I speculate that the Q12 is running scared at the thought.  But there are a few others they might want to think further about.

1) If there was a trail of evidence leading to this "loan" strategy being systematic (which is exactly what it is) then we can probably add to the tax fraud, racketeering and RICO penalties.

2) If what the MPres, GAs, Q12 receive as "reimbursements" can be qualified in other countries (and eventually in the US) as salary, then there will be gender discrimination with litigation to follow.The church owned corporations has GAs/Q12 in top positions because of their patriarchal/male-dominated priesthood.  They can never consider a woman or others not fitting the lily wonder-bread whitehood of the patriarchy.

How could the IRS find this out?  Does the church get audited by the IRS?  Probably not. All major corporations retain services internally or on contract that specialize in avoiding paying taxes, through whatever loopholes they can find. If there is a tax on "widgets" then corporations that buy widgets would simply call them "waggits" and evade the tax. Especially if they know they'll never get audited.

The Washington Post reported that:
"...more than 60 nonprofit groups have spent at least $21 million lobbying Congress and the White House..."

If nonprofit organizations (NPOs) & churches focused considerably on creating business are willing and able to spend $21 million lobbying to preserve their tax benefits, it begs the questions:  what sort of charitable organizations are they really? Or are they merely highly politicized NPOs?  Are they really just businesses exploiting the tax-exemption of being a church?

See
http://www.washingtonpost.com/politics/white-house-nonprofit-groups-battle-over-charitable-deductions/2012/12/13/80e67400-43f2-11e2-9648-a2c323a991d6_story.html

The Huffington Post reports that:
"For the past three years, the Internal Revenue Service hasn't been investigating complaints of partisan political activity by churches, leaving religious groups who make direct or thinly veiled endorsements of political candidates unchallenged...attorneys who specialize in tax law for religious groups, as well as advocacy groups who monitor the cases, say they know of no IRS inquiries in the past three years into claims of partisanship by houses of worship. IRS church audits are confidential, but usually become public as the targeted religious groups fight to maintain their nonprofit status."

http://www.huffingtonpost.com/2012/11/04/irs-church-state_n_2069009.html

The LDS church has an ace (or is it arse?) up Washington DC's sleeve.  Orrin Hatch is the ranking member on the finance committee. He has some say in the fight.

http://www.finance.senate.gov/about/#leadership

He had held the role over charity rules in finance before he became the ranking member. LDSinc has a huge arrow in its quiver in this fight. I don't see them losing their exemption or it causing most members a problem. If anything, the church will lobby to get a loophole that suits the wealthiest donating members, as a compromise built by Hatch. It will be convoluted and confusing and only insiders will get it, so it will probably get overlooked.

In the United Kingdom, one can look up a lot of financial information about the LDS Church-Great Britain, by using charity # 242451 at the website: http://www.charitycommission.gov.uk/find-charities/ 

I was able to get this "financial details" chart for the LDS Church in Britain.

This shows that the LDS-U.K. church collected, on average, about £38 million pounds each year between 2007-2011, and a little under £200 million total.  The operating expense left only perhaps a few million pounds remaining.   That seems like good accounting.  However, in Canada, it's been shown that the largest bulk of the expenses are transferred to US funds through BYU.  Tax report for "THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS IN CANADA" filed with the Canada Revenue Agency (CRA) showed the following in this past tax year:

• Cash, bank accounts, and short-term investments: $55,868,46
• Long-term investments: $5,285,795
• Land and buildings in Canada: $925,065,618
• Accumulated amortization of capital assets: -$403,079,73

Total assets: $685,632,232 
Total amount received from other registered charities (branches and wards): $158,451,145

Total revenue: $180,203,856

• Occupancy costs (of chapels/meetinghouses, presumably): $22,133,258
• Total expenditure on all compensation: $20,240,679 (details are here)
• Total cost of all purchased supplies and assets: $47,658,138
• Amortization of capitalized assets: $27,831,780
• Total expenditures before gifts to qualified donees: $129,930,777
• Total expenditures on charitable programs: $129,542,118

Total amount of gifts made to all qualified donees (listed as Brigham Young University): $56,956,370


Total expenditures: $186,887,147

In other words, they transferred about $57 million (cda) to the US LDS owned university, and operated in Canada at about a $6 million loss.  Why would they transfer almost a third (~32%) of their donated Canadian revenue to the US and leave the Canadian members operating in loss?

Some kind of fraud is happening here.  

So what could be done, if one wanted, to hit the head of the tax-evading snake on the head?

Tom Phillips is the new managing editor at MormonThink, and had acted for many years as Financial Director for the Church’s U.K. corporate entities.   Tom has communicated the following to me.

" To report tax evasion to U.K. authorities go to
Reporting Tax Evasion to HMRC
http://www.hmrc.gov.uk/reportingfraud/online.htm
To see that it is clear cut in the U.K. that ministers of religion are employees and all payments and benefits are taxable visit  HM Revenue & Customs - Ministers of religion:
http://www.hmrc.gov.uk/worksheets/sa102m-notes.pdf "

---and---

"It is very clear cut under U.K. tax law. The MPs are employees and the amounts paid to them or reimbursed to them as a 'living allowance' is a salary. Add to that the cash equivalent of the benefit of housing, cars, medical insurance, college fees, cook, family travel etc. This needs to be "grossed up" and tax and employee national insurance contributions paid on it.
    Also the church as employer has to pay National Insurance Contributions (like a payroll tax) on the gross less a "lower earnings limit" at 13.8%.
    They have 5 MPs in the U.K. and they used to have 8. There is no doubt this is tax evasion and has been going on for over 30 years. The amounts involved, plus interest and penalties will be in the millions of dollars.
    That's just the U.K. Think of all the other countries in which they are evading taxes, including the U.S., and you could be talking $100 million plus.
    This MP Handbook, if authentic, is very damning. It is prima facie evidence of tax evasion and certainly the U.K. tax authorities could demand full financial disclosure for those MPs in the U.K., whether American or British or whatever citizens.
    There will be financial evidence on the church's computers in the U.K. as a starting point. The HMRC can then gain further details from SLC as this is a criminal matter. "

We will see something come of this potential fraud and likely tax evasion in the coming  year.


Also, breaking last minute:

I received an email from a Dutch ex-mormon who runs http://www.mormonisme.nl told  me that he thinks it might be possible using, in part, the MP Handbook "to introduce legislation that would require any institution that gets tax breaks to publish their financial data; chances are good that we can get this done."

In the MP Handbook is this simply benign statement:

"Preserve the mission home as your family residence, and protect the family's privacy there. Teach your missionaries, including those serving in the office, that they should come to the home only by invitation or after calling ahead.

Tom Phillips wrote about the seemingly minor home-invasion clause:  

"This also clarifies the position regarding tax on benefits. If the church were to try to argue to the tax authorities the mission home is a 'business' or 'religious' premise, this quote states quite clearly it is a private family residence.  Quote "Preserve the mission home as your family residence, and protect the family's privacy there".  This is clearly a taxable benefit under U.K. tax law and, as most mission homes are worth $1 million or more, the taxable benefit is quite high."

I think the dike in Europe is breaking and the church hasn't the fingers there to plug them up.  When it bursts, the stream of financial transparency will flow to the US, and fines on their tax evasion will sail across the pond to America.  Soon enough, the fight will be on home-turf.  And probably even High Priest Orrin Hatch can't stop it.

Financial data won't be kept in for much longer

Pay Lay Missionary

Some of you recall my blog  “Pay Lay Clergy” in which I speculated on the incomes of general authorities primarily based on extraneous sources such as corporate wikis, county property appraisers and other statements made by church leaders.  Now I have some direct evidence supporting these claims.   (And a week after posting this disclosure, we have LDS Inc's stamp of validation on the following document.)

Recently, an anonymous source sent me a document called " the LDS Church's Mission President's Handbook " (©2006 by Intellectual Reserve, Inc.).  The section on finances (Appendix B) is illuminating.  I'll quote some of the Handbook under the fair-use clause for educational purposes.

It begins with this statement:

“While you are serving as mission president, the Church reimburses the necessary living expenses for you, your wife, and your dependent children.”

Note the term “necessary” prefixed to “living expenses”.

These “necessary” living expenses include: “food, clothing, household supplies, family activities, dry cleaning, personal long-distance calls to family, and modest gifts (for example, Christmas, birthdays, or anniversary).”  

Housing expenses include “rent (if leased), utilities, telephones, and Internet connection”;  “gardening and repair or replacement of household items” which includes hiring a gardener if needed for larger lots; “one part-time housekeeper-cook”;  “one mission automobile assigned exclusively to the mission president”;  and any assigned mission vehicle can be used by the wife or licensed dependents for “shopping, taking children to school, or other needs.”

The following “necessary” costs are also reimbursed (or provided directly in the mission home):  

• Medical expenses (dental, eye care and medically necessary orthodontia)
• Support for children serving full-time missions
• One round trip fare for each child under age 26 to visit the parents’ mission
• Elementary and secondary school expenses for tuition, fees, books, and materials
• Undergraduate tuition at an accredited college or university (Tuition is waived at Church-owned schools.) 

I was not aware that tuition, paying for the child’s mission, modest Christmas gifts and more were “necessary living expenses”. Also note, mission presidents are requested not to pay tithing on funds (income) reimbursed by the church.

The handbook advises the mission president that “any funds reimbursed to you should be kept strictly confidential and should not be discussed with missionaries, other mission presidents, friends, or family members.”

Mission presidents are warned that they “should not open a local bank account for personal funds received from the Church . . . especially if the account would produce interest (and thus raise income tax questions).”  Instead of allowing mission president control over their personal funds, “a joint personal bank account at Church headquarters is established for you and your wife.” 

The tax issue raised is addressed more fully in the handbook.  The Church avoids tax issues by carefully defining the relationship between themselves and the mission president as a “volunteer religious service” so that “any funds reimbursed to you from the Church are not considered income for tax purposes; they are not reported to the government, and taxes are not withheld with regard to these funds.”

In order to keep quiet the situation, not only are the mission presidents told not to discuss any funds they receive with any member (as quoted above), but also to “not share information on funds you receive from the Church with those who help you with financial or tax matters.”  To “never represent in any way that you are paid for your service.” And “do not list any funds you receive from the Church, regardless of where you serve or where you hold citizenship.”

This secrecy listed in a secret handbook that was formerly only accessible to mission president and general authorities raises the question about the church’s lack of financial transparency.  First of all, if mission presidents get the benefit of all living expenses (necessary and beyond) paid by the Church, including highly expensive benefits like college tuition and gardeners, what do the Quorum of the 70 receive?  What do the 12 apostles earn?  

Secondly, the pretense that the mission presidents are unpaid volunteers is akin to saying the CEO’s of corporations aren’t millionaires when paid only a $200,000 salary but are gifted $5,000,000 to $10,000,000 bonuses and stock options.  What does the IRS say about such lucrative back-door payments (i.e., “reimbursements”)?  
IRS document http://www.irs.gov/taxtopics/tc417.html states:

 “A minister who receives a housing allowance may exclude the allowance from gross income to the extent it is used to pay expenses in providing a home. Generally, those expenses include rent, mortgage interest, utilities, repairs, and other expenses directly relating to providing a home. The amount excluded cannot be more than the reasonable pay for the minister's services.” 

One has to question if gardeners, tuitions, dental plans, dry cleaning, Christmas gifts and more are included in the reasonable pay clause.  

Hold on, even though the mission presidents do receive a large allowance, they are told to never claim any pay, so there’s no gross income from which they can exclude these “reasonable” expenses.  Tricky tricky.  

The latest managing editor of Mormonthink “warned the church that payments to mission presidents should be reported to the UK tax authorities as they were 'employees' under UK tax law.”  We understood “it was discussed at a First Presidency meeting with the Presiding Bishopric and they decided to continue not reporting, and pay any fines when, and if, they were discovered.”

The disclosures found in the well-guarded Mission Presidents Handbook show that not only are the Pay Lay Missionary policies fraught with intentional concealment,  but give near direct evidence that the general authorities and apostles receive generous benefits and reimbursements for most of life’s “necessary” expenses.   Likewise, they wouldn't pay tithing on moneys given them by the church. That is, general authorities don't pay tithing (even though they regularly preach paying it to members.) Perhaps these are justifiable on some level.  If so, why wouldn’t the church acknowledge them and do more than barely meet the legal requirement rather than the acclaimed “obeying, honoring, and sustaining the law”?  

It depends on what "is" is and what "pay" you pay, I suppose.  Slick DC bureaucrats would be proud of Mormon leaders.

The LDS church claims to follow Christ when one of his primary missions was to take care of the poor. However, with ordinary missionaries having to be frugal, missionary couples having to pay for everything, members as free janitors cleaning toilets and them paying tithing when they can't afford their own mortgages, the LDS church by paying for GA's kids private schools, GA's gardeners and GA's up-scale homes has shown its priority to have the poorest members take care of the richest leaders.