![\"form-990\"](\"http:\/\/timesandseasons.org\/wp-content\/uploads\/2011\/09\/form-9901.jpg\" "\\"form-990\\"")
The Church cares about taxes.[fn1]<\/p>\nThe Church cares about taxes.[fn1]<\/p>\n
It doesn’t really seem to care about the details of tax policy, of course. I’ve never seen the Church weigh in on the appropriate tax rate, tax base, or even the appropriate type(s) of tax (e.g.<\/em>, an income or consumption tax, a retail sales tax or a VAT, or whatever)\u00a0a government should impose.[fn2] But still, it makes explicit and implicit nods that indicate that, ultimately, it cares both about its tax position and that of its members.<\/p>\n The Church and (Its) Taxes<\/strong><\/p>\n Like (essentially) every other church in the U.S., the LDS church is exempt from taxation. Not only that, certain U.S. taxpayers who donate to the Church[fn3] can deduct their donations. And the Church is careful to protect its tax exemption. It explicitly<\/a> does not endorse or oppose candidates for office.[fn4] Church property cannot be used for doing things that would endanger the Church’s tax exemption<\/a>. It organizes its for-profit businesses as separate, non-exempt corporations<\/a>.[fn5]<\/p>\n So the Church wants to maintain its exemption. Note, though, that the exemption benefits not only the Church, which doesn’t have to pay taxes, but its (U.S., but see below) members, who might get a deduction for their donations. Note, too, that even if the Church lost its exemption, it probably wouldn’t be taxable on donations it received; they would likely (though not unquestionably) be treated as non-taxable gifts.<\/p>\n The Church and (Members’) Taxes<\/strong><\/p>\n (Note, here, that I don’t actually have any insider knowledge about Church decision-making; at best, I’m making mildly-educated inferences from public facts).<\/p>\n The Church expects its members to pay their taxes<\/a>. [fn6] Nonpayment could make members ineligible for certain callings and temple recommends, and criminal conviction could, presumably, result in Church discipline.<\/p>\n That said, the Church also wants members to get deductions to which they’re entitled. For example, the Church filed an amicus brief in Davis<\/em><\/a>, defending members’ deduction of missionary expenses they sent to their children on missions.<\/p>\n Moreover, the Church opposed a Utah flat tax proposal that would have eliminated deductions<\/a> for charitable giving. There may be some self-interest in this, although I don’t imagine that losing a state tax deduction would prevent many tithe-paying members from paying their tithing.[fn7]<\/p>\n My last example: at the beginning of this year, the Church switched from allowing couples to jointly pay their tithing to a system where each payment of tithing has to be in the name of an individual member<\/a>. Yes, this is a technological change—apparently, the Church changed or updated or something its accounting software—but it also has tax consequences. In the U.S., married people can file taxes jointly. Essentially, this allows them to aggregate their income and be taxed as if they were a single taxpayer. As such, for tax purposes, married U.S. taxpayers who file jointly should be indifferent as to which spouse pays the tithing; provided they can itemize, all of the tithing produces a deduction that they use jointly.<\/p>\n But countries are trending away from joint filing. Although in 1970, only 6 OECD countries taxed spouses separately, currently, only 13<\/a> of what I count as the 34 OECD countries (including the U.S.) allow for joint filing. In those individual taxation jurisdictions, in order to get a deduction (assuming, of course, a deduction is permissible, which it seems to be in at least some of the countries), a married couple has to determine which spouse is making the contribution, and it’s undoubtedly helpful to get a receipt in the individual’s name, not the couple’s.<\/p>\n —<\/p>\n [fn1] Note that, in asserting that the Church cares about taxes, I’m not saying that taxes occupy a central role for the institutional church, nor am I arguing that it doesn’t care about other non-Atonement-related things that aren’t taxes. For example, it seems pretty clear the the Church cares about immigration<\/a>, MX missiles<\/a>, and being good neighbors<\/a>, among a whole ton of other things.<\/p>\n [fn2] And no, the book of Mosiah doesn’t address appropriate tax rates<\/a>.<\/p>\n [fn3] Specifically, those members who itemize. And itemization is a threshold that the government, not the Church, imposes.<\/p>\n [fn4] Such an endorsement would theoretically<\/a> cost the Church its exemption<\/a>.<\/p>\n [fn5] Technically, of course, the Wikipedia article is wrong. There is no “unrelated business income” (notwithstanding the header to Section 511<\/a>); it’s “unrelated business taxable<\/em> income (emphasis mine). Moreover, although it would be UBTI in the hands of the Church, a non-exempt entity cannot earn UBTI; rather, the income is taxable to the corporations, which can pay an after-tax dividend to the Church. The Church, in turn, won’t be taxable on the receipt of the dividend, per its exemption.<\/p>\n [fn6] Income taxes, at least, but the reasoning behind our obligation to pay income taxes would apply equally to any other tax; I suspect that the Handbook wasn’t written by tax experts, so the language isn’t meant to exclude our obligations with respect to other taxes.<\/p>\n