News Should Churches Be Taxed? The Debate on Tax Exemptions and Reinvestment

[Jimmy Snyder]

A church is a non-prophet?

 

[russ_watters]

Do you think churches should be exempt from having to file paperwork to show they have zero business profit?

Meh, dunno. I can see the IRS wanting to reduce their paperwork and they wouldn't get much out of having such paperwork filed. Is that really a big issue though?

There is a good reason why you would treat a church differently from, say, the Girl Scouts: Churches are mostly self funded while the Girl Scouts operates much more like a business, drawing substantial income from selling products.

As I said before, people (not you specifically) are really shooting from the hip here, having no idea what they are talking about and just making stuff up as they go. I can't fathom what people are envisioning a church's finances look like, but most of this discussion is nonsensical, or at best, just inapplicable. We're discussing baseball, but talking about touchdowns and baskets and penalty kicks.

I think the problem here is people just have no idea how a corporations work and what the tax implications are.

For example:

My homeowner's association is a 501c corporation...and we don't do any charity. If there's money left over from our landscaping and snow removal at the end of the year, where do people think that money goes? Even if it got distributed to the homeowners, it would just be a rebate of fees paid. In reality, it goes into a fund for next year.

Our association has no 3rd party "owners" who could take our profits, if such profits existed.

 

[Jack21222]

Our association has no 3rd party "owners" who could take our profits, if such profits existed.

But churches are different, particularly so-called "mega-churches" down south. Or the church of Scientology. There are plenty of people that could pocket large amounts of profit from a church.

I still maintain it's a violation of the establishment clause to give churches special benefits over similar secular organizations.

 

[DavidSnider]

There is a good reason why you would treat a church differently from, say, the Girl Scouts: Churches are mostly self funded while the Girl Scouts operates much more like a business, drawing substantial income from selling products.

We're not talking about honest-to-goodness local churches that use the funds to keep a roof up. We're talking about megachurches, like Creflo Dollar or Scientology. It's a whole different ball game.

 

[russ_watters]

Who is "we?" The OP says nothing about megachurches. And just who do you guys think might be profiting? Jack, you say they are different: HOW?

 

[DavidSnider]

http://firstread.nbcnews.com/_news/2008/04/04/4436565-church-directed-money-to-fl-gov

 

[russ_watters]

http://firstread.nbcnews.com/_news/2008/04/04/4436565-church-directed-money-to-fl-gov

What point should I be getting from that link?

 

[Jack21222]

Jack, you say they are different: HOW?

How is a church different from a homeowners association? You said that your homeowners association has no owners that could take a profit if such profits existed. Churches do. I thought that was very obvious.

If you want specific examples of somebody who could potentially take profits out of a church, consider Craig Groeschel. Now, I am NOT accusing him specifically of doing any such thing, but it is an example of a person who would be in a position to do something if he were unethical, unlike your homeowners association who has no such person.

 

[russ_watters]

Churches have owners beyond just the members? Can you substantiate that? WHO are they? No, it most certainly is not obvious: it flies in the face of what churches are.

And I see nothing in that wiki link to support the idea that the pastor profits from the church beyond his income. Are you saying he owns it? Can you prove it?

I think you are making assumptions about things you do not know here.

 

[Jack21222]

Churches have owners beyond just the members? Can you substantiate that? No, it most certainly is not obvious: it flies in the face of what churches are.

And I see nothing in that wiki link to support the idea that the pastor profits from the church beyond his income. Are you saying he owns it? Can you prove it?

I think you are making assumptions about things you do not know here.

I'm saying he would have the ability to do so, as the founder of the church and senior pastor. He's basically in control of the church. By the way, if you had read my post, you would have seen that I was not accusing him of taking profits from the church beyond his income. I very specifically stated that he wasn't. I just said that he could siphon money off of the church if he wanted to. You know, maybe the "church" buys him a new Lamborghini for "church business" or something.

Once again, I am NOT accusing him of doing such a thing. All I am saying is that it's possible.

And because they don't have to make their finances available to the IRS like EVERY OTHER non-profit, he could easily do this and get away with it.

Here's an article from charitywatch.org which addresses this kind of thing: http://www.charitywatch.org/articles/Televangelists_Lack_Oversight.html

If you want a news source, here is something from USA Today: http://usatoday30.usatoday.com/news/washington/2007-11-07-televangelist-probe_N.htm

I'm not just making up hypothetical situations here. There are pastors right now that are apparently getting away with tax-free multi-million dollar homes and Rolls Royces. And before you ask, no I cannot prove it, BECAUSE THEY'RE NOT REQUIRED TO FILE THEIR FINANCES. The churches being investigated by the senate told the government to go screw themselves, basically, knowing that nothing could be done.

Anyway, I can agree that this flies in the face of what churches are SUPPOSED to be, but it does NOT fly in the face of what these churches are.

 

[DavidSnider]

And I see nothing in that wiki link to support the idea that the pastor profits from the church beyond his income. Are you saying he owns it? Can you prove it?

That's exactly what MY link showed.

 

[russ_watters]

You said:

You said that your homeowner's association has no owners that could take a profit if such profits existed. Churches do.

Grammatically, the second sentence is a claim that churches do have owners beyond the members. Are you saying that you didn't intend that there are additional owners, just additional people who could take a profit? That's not what ownership is or what profit is.

Saying that "he's basically in control of it" and could therefor steal money from the church is not a fundamental difference between him and my homeowner's association: My homeowner's association has a President who has a check book and who could write himself checks.

But none of that has anything at all to do with whether churches (mega or otherwise) should pay taxes. Moreover/as such, this has nothing to do with the IRS -- it isn't the IRS's job to look for civil fraud (the pastor in this hypothetical would be stealing from the members, not the IRS). The IRS is not some private accounting firm that audit's peoples' books to look for fraud or skimming. What you are suggesting would make the IRS a government sponsored accounting firm that would -- free of charge, I assume? -- provide financial audits to companies to help them ensure their staff isn't stealing from them. Wow, would companies ever love that! Except for the private accounting firms who currently provide that service, of course! And taxpayers who would have to fund it.

I think, also, you are under the false impression that non-profits file full-fledged tax returns that would provide the sort of information required do do such an audit. I'm pretty sure they don't -- I looked that up and IIRC, non-profits file a little form that states that they are non-profit and that's it. Filing that form to register as a non-profit is what churches are exempt from. I'll have to double-check that/get the link when I get home later, though.

 

[russ_watters]

That's exactly what MY link showed.

Please provide a quote, because I'm not seeing it.

 

[russ_watters]

And regarding the million dollar homes and cars, Jack: how do you know if you say no proof exists?

We have standards here, guys. You can't just fling carp at the wall an hope they stick. You need to substantiate - and explain - your claims.

 

[DavidSnider]

My example was too sketchy as they closed the inquiry prematurely. Let's go to a more clear cut example.

http://en.wikipedia.org/wiki/Peter_Popoff#Financial_details

In 2003, Popoff's ministry received over $9.6 million and by 2005 the amount had risen to over $23 million. In that year he and his wife were paid a combined total of nearly $1 million, while two of his children were receiving over $180,000 each.[37] Financial data is not available for Popoff's ministry following 2005 because Peter Popoff Ministries changed from a for-profit business to a religious organization in 2006, making it tax-exempt.[38] Popoff purchased a home in Bradbury, California for $4.5 million in 2007.[39][40] He reportedly drives a Porsche and a Mercedes-Benz.[41] Some reporters are urging those who have donated money to Popoff in hopes of receiving "miracles" to report to the Attorney General in their state.[8]

 

[russ_watters]

Let me be more succinct: If the pastor of a church is stealing money from the church coffers, what does that have to do with whether or not the church should be paying taxes?

 

[russ_watters]

My example was too sketchy as they closed the inquiry prematurely. Let's go to a more clear cut example.

http://en.wikipedia.org/wiki/Peter_Popoff#Financial_details

Clear cut about what? What is your claim, David?

 

[Jack21222]

You said: Grammatically, the second sentence is a claim that churches do have owners beyond the members. Are you saying that you didn't intend that there are additional owners, just additional people who could take a profit? That's not what profit is.

You're nitpicking. I am saying that churches have founders and presidents who are de facto owners. They have boards which do whatever the president tells them to do, and the president often has "emergency powers" to overrule the board. Please read the links I posted for the source.

Saying that "he's basically in control of it" and could therefor steal money from the church is not a fundamental difference between him and my homeowner's association: My homeowner's association has a President who has a check book and who could write himself checks.

I know of no homeowners association that is run like a church. There is no founding president who has a life position as far as I'm aware in homeowners associations.

But none of that has anything at all to do with whether churches (mega or otherwise) should pay taxes. Moreover/as such, this has nothing to do with the IRS -- it isn't the IRS's job to look for civil fraud (the pastor in this hypothetical would be stealing from the members, not the IRS). The IRS is not some private accounting firm that audit's peoples' books to look for fraud or skimming. What you are suggesting would make the IRS a government sponsored accounting firm that would -- free of charge, I assume? -- provide financial audits to companies to help them ensure their staff isn't stealing from them. Wow, would companies ever love that! Except for the private accounting firms who currently provide that service, of course! And taxpayers who would have to fund it.

All of this is incorrect. It absolutely IS the IRS's job to look for abuses of non-profit status. If the president of a non-profit is having his non-profit organization buy him million dollar vacation homes and a private jet for personal use, that would jeopardize the non-profit status of the church, AND THEN THE NON-PROFIT WOULD HAVE TO BE TAXED. However, churches are exempt from reporting such expenditures that could cause the church to lose its non-profit status. Therefore, this IS about whether churches should be taxed. My argument is that churches should have to file tax returns like every other non-profit, and if they break the rules (such as the http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/Inurement-Private-Benefit---Charitable-Organizations), they should be taxed.

I think, also, you are under the false impression that non-profits file full-fledged tax returns that would provide the sort of information required do do such an audit. I'm pretty sure they don't -- I looked that up and IIRC, non-profits file a little form that states that they are non-profit and that's it. Filing that form to register as a non-profit is what churches are exempt from. I'll have to double-check that/get the link when I get home later, though.

Non-profits DO file full-fledged tax returns. Here's the 990-ez form, which small non-profits have to file: http://www.irs.gov/pub/irs-pdf/f990ez.pdf

There is a more complicated version for the larger ones. Churches are exempt from filing that tax return. Here is the source for that:

http://www.irs.gov/Charities-&-Non-Profits/Churches-&-Religious-Organizations/Filing-Requirements

Generally, tax-exempt organizations must file an annual information return ( Form 990 or Form 990-EZ). Tax-exempt organizations that have annual gross receipts not normally in excess of $25,000 ($50,000 for tax years ending on or after December 31, 2010) are not required to file the annual information return; they may be required to file an annual electronic notice, however. In addition, churches and certain church-affiliated organizations are excepted from filing.

I'll state it once again: I believe such exemptions for religious 501c3 organizations is a violation of the establishment clause.

 

[DavidSnider]

As others have said the issue isn't merely whether they should pay taxes, but whether it's prudent for them to file. I don't see any reason for legitimate churches to pay taxes.

But do you think that guys like Popoff shouldn't have to file simply because they call themselves a church?

 

[Jack21222]

As others have said the issue isn't merely whether they should pay taxes, but whether it's prudent for them to file. I don't see any reason for legitimate churches to pay taxes.

Well, the original post was whether churches should pay taxes. I think we're all in agreement that not only should they not pay taxes, if they're run within the rules, they CAN'T pay taxes, because they don't make any profits. I don't feel there can be any argument there.

My problem is that we've given churches shielding from the prying eyes of the IRS as well as congress, so scam artists are using churches as a way to personally profit with no oversight from anybody.

 

[Oltz]

For the record according to this document from the IRS on page 2 it clearly states that not all churches are non-profit.

http://www.irs.gov/pub/irs-pdf/p1828.pdf

Churches and religious organizations may
be legally organized in a variety of ways
under state law, such as unincorporated
associations, nonprofit corporations,
corporations sole, and charitable trusts

People have been using the term Non-Profit as synonymous with 501(c) Tax exempt but there are mutliple classes under that category its actually Non-Profit or Religious associations

Page 3 goes on to say : Bold Mine

To qualify for tax-exempt status, such an
organization must meet the following requirements
(covered in greater detail throughout this publication):
■ the organization must be organized and operated
exclusively for religious, educational, scientific, or other
charitable purposes,
■ net earnings may not inure to the benefit of any
private individual or shareholder,
■ no substantial part of its activity may be attempting
to influence legislation,
■ the organization may not intervene in political
campaigns, and
■ the organization’s purposes and activities may not
be illegal or violate fundamental public policy

Nothing says you can not have a for Profit church but those profits can not be transferred to an individual they are essentially a surplus to be used if down years ever occur.

They are also taxed on Unrelated Business income. http://www.irs.gov/Charities-&-Non-Profits/Unrelated-Business-Income-Tax

page 16 from original link

In general, rents from real property, royalties, capital
gains, and interest and dividends are not subject to the
unrelated business income tax unless financed with
borrowed money.

Thus they can use prior profit to grow more profit that can still not be transferred to any individual. Hence the fact that its a criminal fraud charge when church workers do skim off the top AFAIK even if a church "de certified" and gave up its church status the profit it made while tax exempt would still be non transferable and would need to be used for charitable works(as operating expenses would then be gone) or back taxes would be due on it.

There has been allot of back in forth in this thread with little or no support of anything saying "treat all non profits the same" is meaning less as Non-profit does not mean they do not make a profit as an enterprise it means no individual profits from the success that is true of churches and NGO's.

By the way do you really think large global NGO's do not have vast holdings and a stock portfolio? I assume you want them taxed as well and that this has nothing to do with religion.

In addition each state has its own say in which properties are considered tax exempt for example depending on what state a catholic university is in it may or may not be a tax exempt institution.

Atheists, environmentalists and the religious all evangelize for their point of view treat them all the same and currently as far as I can find proof of we pretty much do. You need to keep in mind these other "non-profit" organizations are what at most 50 years old? Give them a couple hundred years to grow.

 

[Oltz]

In 2003, Popoff's ministry received over $9.6 million and by 2005 the amount had risen to over $23 million. In that year he and his wife were paid a combined total of nearly $1 million, while two of his children were receiving over $180,000 each.[37] Financial data is not available for Popoff's ministry following 2005 because Peter Popoff Ministries changed from a for-profit business to a religious organization in 2006, making it tax-exempt.[38] Popoff purchased a home in Bradbury, California for $4.5 million in 2007.[39][40] He reportedly drives a Porsche and a Mercedes-Benz.[41] Some reporters are urging those who have donated money to Popoff in hopes of receiving "miracles" to report to the Attorney General in their state.

Does the church own the house or did they buy it it and deed it to the man? That would be a violation and fraud charges could be filed against the church and the man.

Does the Church own the property and allows him to use it as part of his station? That would be allowed as long as it was actually approved by the church.

If not approved Members could have an investigation started for misuse of funds and he could be charged with fraud.

Or did he purchase it from his own account with his savings from that lavish income you cited as prior to church gaining exempt status that he can still be collecting? Legal

None of these would be investigated by the IRS they are criminal charges the IRS would only get involved in the end stages of the first case.

Non-profits can own property and can have employees in "company" housing and with company vehicles what kind of perks do you think Greenpeace gives to its CEO?

 

[Jack21222]

Does the Church own the property and allows him to use it as part of his station? That would be allowed as long as it was actually approved by the church.

As far as I can tell in Copeland's case, it's this one. However, note that Copeland IS the church. The bylaws for his church state:

the Committee reports that the bylaws of Copeland's church state: "Kenneth Copeland, as Co-founder and ex officio member of the Board of Directors, shall in his sole discretion be empowered to veto any resolution of the Board which he the President shall determine is not in the best financial or operational interests of the Church."

He has full control over it.

In a different church with similar extravagances, there is the following:

A former staff member of Whites' church told the Committee that the church did conduct regular board meetings; however, all decisions concerning the church were made by the Whites and their CFO. The board members typically found out "after the fact."

So here, the "church" is just a rubber stamp for the founder to approve whatever he wants for himself.

Please explain to me how this is NOT the IRS's business. The IRS determines what constitutes personal benefit.

Also, I'm not quite sure what your mention of Greenpeace has to do with anything. If they're violating the rules, I'd like to see them have their status revoked, as it looks like it has been in New Zealand. But at least Greenpeace has to file their tax returns unlike churches.

 

[Oltz]

If his followers do not complain there is no legal wrongdoing and as long as the transactions are done either in his name or the churches without a transfer to him after the fact its not a violation and would not be for any non-profit or church.

If the church still owns the house that's fine if he bought the house in his own name with his own assets that's fine. If the members think he is paid to much they can stop giving or leave the church. If they think he is skimming they can report it to the police and have a fraud investigation. If you look at county records and see that the loan was cosigned by the church or the deed was signed over to him then you can call the IRS and report an illegal personal gain.

Any organization church or not is subject to those things happening. Watch dog organizations look into transactions and records and members should know what they are paying for if a church feels its founder needs a golden toilet that is legal if the red cross wanted its ceo to drive a delorean made of gold it could as long as it maintained ownership and was willing to loose the donors it would turn off.

 

[Jack21222]

If his followers do not complain there is no legal wrongdoing

This is completely wrong and I can no longer take your posts seriously. It is NOT up to his followers to determine if the church is chiefly operating in the public interest rather than the private interest. This is a ridiculous argument to make.

http://www.boardsource.org/Knowledge.asp?ID=3.165

 

[mheslep]

I think I've caught most of the thread. I'm curious why it did not quickly go to the free exercise clause. Apologies if I missed it.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof ...

Elsewhere the Constitution uses terms implying balance, i.e. "unreasonable" in the fourth amendment on searches. Not here. The term is "free".

As to the possibility of taxation impeding free exercise, to my mind that's been asked and answered. See Justice Marshall, 1819, McCulloch v. Maryland:

“...the power to tax involves the power to destroy."

The IRS has, IIRC, ample enforcement mechanisms and a set of rules with teeth to prevent some clown with a bible and twelve year old wife calling himself a tax free church. But beyond that, the law seems to be government hands off, at least in US.

 

[russ_watters]

Non-profits DO file full-fledged tax returns. Here's the 990-ez form, which small non-profits have to file: http://www.irs.gov/pub/irs-pdf/f990ez.pdf

I stand corrected -- I remembered my research.

And if all you care about is equality in reporting that's fine, but what you are saying is still suggesting more:

You're nitpicking. I am saying that churches have founders and presidents who are de facto owners. They have boards which do whatever the president tells them to do, and the president often has "emergency powers" to overrule the board.

So they have power because of their unofficial stature that puts them in a position to be able to steal from the church? Official or unofficial, such people exist in most organizations. They are not unique to churches.

If all you intended from your first post this morning is that there are some people in churches who are in a position to steal from those churches, then we have no disagreement and you misread the post you were responding to if you thought we did.

All of this is incorrect. It absolutely IS the IRS's job to look for abuses of non-profit status. If the president of a non-profit is having his non-profit organization buy him million dollar vacation homes and a private jet for personal use, that would jeopardize the non-profit status of the church, AND THEN THE NON-PROFIT WOULD HAVE TO BE TAXED.

Both parts of that are ridiculous. If someone is stealing from a non-profit, it has nothing whatsoever to do with the non-profit's tax exempt status.

With a quick google, you can find thousands of examples of people stealing from non-profits. Here's two:
http://www.wsbtv.com/news/news/local/woman-steals-thousands-dollars-autism-nonprofit/nHXGz/
http://smallbusinessbandits.com/archives/389

In the first case, the theft was found by the home office of the national non-profit. In the second, the theft was found by the IRS looking into the thief's personal tax return. In neither case did the IRS find the fraud by looking into the non-profit's finances nor does either article suggest that the non-profit's tax exempt status would be in jeopardy as a result. The idea that it would be just does not follow logically. But hey -- it's your claim and since there are thousands of examples of people stealing from non-profits, you should be able to substantiate it if it is true.

I think I know where you're going with that (more later*) and it is wrong-headed thinking.

The second link, by the way is an organization that tracks such stories and they have hundreds, so if such examples exist, I would think you will find them there.

I'll state it once again: I believe such exemptions for religious 501c3 organizations is a violation of the establishment clause.

I'd quibble with it being an establishment clause issue, but otherwise have no objection to the reporting as an issue of fairness.

*Where I think you are going with this is that it sounds like you and David don't think it should be possible to get rich legally by being a pastor. Is that what this is about?

 

[russ_watters]

But do you think that guys like Popoff shouldn't have to file simply because they call themselves a church?

According to your link, Popoff had a for-profit business and filed taxes, but still committed fraud. He's now converted that business to a church and your assumption appears to be that he's probably still committing fraud. I think that's a reasonable assumption. But we're getting further and further away from the subject of the thread. Popoff is not a typical church. If the law is so loose that it enables a fraudster like him to easily conceal fraud and evade taxes, fine -- I give. Make churches file that form.

But stealing from non-profits is such a rampant problem even for non-profits that file that form and a different problem than tax evasion, I think that's not the most effective solution. Mandatory 3rd party auditing would be my suggestion for fixing such fraud.

 

[russ_watters]

*Where I think you are going with this is that it sounds like you and David don't think it should be possible to get rich legally by being a pastor. Is that what this is about?

For clarity, here are the top 25 paid CEOs of non-profits:
http://www.charitywatch.org/hottopics/Top25.html

So it is possible to become rich legally by running a non-profit.

 

[Jack21222]

I stand corrected -- I remembered my research.

And if all you care about is equality in reporting that's fine, but what you are saying is still suggesting more: So they have power because of their unofficial stature that puts them in a position to be able to steal from the church? Official or unofficial, such people exist in most organizations. They are not unique to churches.

If all you intended from your first post this morning is that there are some people in churches who are in a position to steal from those churches, then we have no disagreement and you misread the post you were responding to if you thought we did. Both parts of that are ridiculous. If someone is stealing from a non-profit, it has nothing whatsoever to do with the non-profit's tax exempt status.

With a quick google, you can find thousands of examples of people stealing from non-profits. Here's two:
http://www.wsbtv.com/news/news/local/woman-steals-thousands-dollars-autism-nonprofit/nHXGz/
http://smallbusinessbandits.com/archives/389

In the first case, the theft was found by the home office of the national non-profit. In the second, the theft was found by the IRS looking into the thief's personal tax return. In neither case did the IRS find the fraud by looking into the non-profit's finances nor does either article suggest that the non-profit's tax exempt status would be in jeopardy as a result. The idea that it would be just does not follow logically. But hey -- it's your claim and since there are thousands of examples of people stealing from non-profits, you should be able to substantiate it if it is true.

I think I know where you're going with that (more later*) and it is wrong-headed thinking.

The second link, by the way is an organization that tracks such stories and they have hundreds, so if such examples exist, I would think you will find them there.
I'd quibble with it being an establishment clause issue, but otherwise have no objection to the reporting as an issue of fairness.

*Where I think you are going with this is that it sounds like you and David don't think it should be possible to get rich legally by being a pastor. Is that what this is about?

I'm less interested in them stealing from their churches as I am structuring their churches for their own private benefit. It is against the rules for a non-profit to be structured primarily for the private benefit of an individual, yet that is exactly what is supposedly happening in some cases.

From a previous link (you can decide how non-biased it is, but it seems legit to me), here are the rules:

Private inurement is prohibited in all nonprofits. It happens when an insider — an individual who has significant influence over the organization — enters into an arrangement with the nonprofit and receives benefits greater than she or he provides in return.

The most common example is excessive compensation, which the IRS condemns through intermediate sanctions (significant excise taxes). Insiders — referred to in IRS parlance as "disqualified persons" — can be high-level managers, board members, founders, major donors, highest paid employees, family members of any of the above, and a business where the listed persons own more than 35 percent of an interest.

I argue that many churches are in violation of this rule, however without tax filings, they're allowed to keep all of their finances, including compensation, secret, so the IRS has no way to enforce this rule for churches. This was the subject of a 2007 Senate investigation, but because the rules are structured the way they are, most of the churches investigated just told the Senate to go pound sand, and so the investigation went nowhere.

And you were close about where I was going. I don't think you should be able to get rich tax-free as a pastor. To me, it looks like some con artists have seized onto the church loopholes and are using them for private gains. They're starting a church, getting people to donate them money, and then taking that money and distributing it to themselves and their "ordained" family members tax-free, and then refusing to disclose any of this to the government. Such "churches" are clearly scams, and the federal government is protecting these scams.

I should be careful with the word "scam," because I don't have any specific evidence that they've done anything illegal (because they're not required to open up their books so any evidence would be hidden), but according to my charity watch link, the Senate investigation revealed the following:

It also pays to be the friend or family member of a televangelist. For example, during the Committee investigation, Randy and Paula White divorced. An insider told the Committee that Randy placed his new girlfriend and her parents on payroll and gave them retroactive back pay. According to the Committee, Paula's son, and Randy's son, daughter, and father are also on the payroll. The four of them were paid a total of $420,000, $560,000, $700,000 and $1,075,000 in 2004, 2005, 2006, and 2007, respectively.

Also:

The Committee reported that some churches allegedly ordain friends, family members, and employees solely for the purpose of getting them the income tax exclusion.

If this isn't a scam, it sure smells like one.