Wednesday, April 06, 2005
Last year Christian Headlines reported that the IRS had launched an investigation into 2000 nonprofit organizations. This week Internal Revenue Commissioner Mark W. Everson addressed the Senate Finance Committe about about his organization's findings. He also presented the committee with a 14-page letter presenting an overview of the investigation.
letter (emphasis added):
A corporation sole is an entity authorized under certain state laws to allow religious leaders to hold property and conduct business for the benefit of a religious entity. The leader may incorporate under state law in his capacity as a religious official. A corporation sole may own property and enter into contracts as a natural person, but only for the purposes of the religious entity. Title in property that vests in the officeholder as a corporation sole passes to the successors in office, and not to the officeholder's heirs. The purpose of a corporation sole is to ensure continuity of ownership of property dedicated to the use of a religious organization.
The corporation sole form of organization serves a valid function for legitimate religious entities. However, some promoters are urging use of corporation sole statutes for tax evasion. Individuals incorporate under the pretext of being a "bishop" of a religious organization or society. The idea being promoted is that the arrangement entitles the individual to exemption from Federal income taxes as a nonprofit, religious organization described in section 501(c)(3). The position is utterly without merit."
Stayed tuned. This week Christian Headlines will have more news to report on several televangelists and excessive compensation practices.