Church charged with multinational tax crime

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The tax structure means that since 2015 Australian adherents have been able to take advantage of $400 million in tax deductions not available to followers of other religions or faiths.

A Mormon Church spokesperson did not respond to written questions about the discrepancy, but said the church was operating in accordance with tax laws.

Dr. Neville Rochow, QC, says the church has structured itself to minimize taxes.

In the mid-2010s, Dr. Rochow participated in a Mormon-instigated econometric study used to justify his tax status and to ensure that religious properties of other churches were not taxed. Soon after, he began making substantial donations and tithes through his charitable trust – a decision in which he was not involved.

Before that, in a submission it made to the Treasury, the church said it had spent just $36,000 a year, on average, on charitable donations between 1985 and 2010. There was little or no growth of the 61,600 Mormon adherents in Australia over the past decade. this could explain the reported 2000-fold increase in charitable donations.

Each year, funds are transferred from the church’s charitable trust to a separate entity, LDS Charities Australia, based in Sydney. From this entity, approximately $70 million per year is distributed to global charitable causes. The church spokesperson said that after LDS Charities Australia was established in 2012, “there was a desire and capacity to dramatically increase support for global humanitarian and development projects”.

That $70 million a year is close to the amount the global church — most of which is in the United States — says it gives each year on average around the world, according to its own annual reports. .

LDS Charities Australia has no paid staff, Australian website, expense or infrastructure to run what claims to be one of the country’s leading charities, raising more individual donations than Oxfam, Beyond Blue or Caritas Australia, the international aid charity of the Catholic Church.

It operates in parallel with the Utah-based Latter Day Saint Charities, which apparently directs the church’s charitable spending around the world and includes all of its senior staff, leadership and infrastructure.

A church spokesperson denied that LDS Charities Australia was run by Utah-based Latter Day Saints Charities and said it funds programs through other charities including the Red Cross, Water for the People and the World Food Programme, which enabled it to keep costs low. “All decisions about funded projects are made right here in Australia,” the spokesperson said. The cited programs were also funded by his Utah-based charity.

Ryan Cragun, a sociology professor at the University of Tampa and an expert on Mormonism, said it was inconceivable that the church would make major global charitable decisions from Australia. “It’s an amazingly hierarchical religion,” Prof Cragun said. “So any big decisions like that will be made in Salt Lake City.”

In 2019, the Australian Tax Office issued a binding ruling that for an Australian charity to have Deductible Donation Recipient (DGR) status – which allows tax deductions for donors – it must have the Australia as “DGR focal point within a legal framework”. or organizational sense”.

  Ryan Cragun, professor of sociology at the University of Tampa

Ryan Cragun, professor of sociology at the University of Tampa

Krystian Seibert, a charities expert at Swinburne University’s Center for Social Impact, speaking in general terms, said the DGR rule meant that the operations and management decisions of a charity charities had to be taken from Australia.

“It can, of course, engage and consult with partner organizations outside Australia, but if it effectively outsources operational and management decision-making to individuals or organizations that are outside Australia, this could raise issues under our tax laws.”

Mormonism is an American religious movement that began in the 19th century and grew to become incredibly wealthy.

A Washington Post a 2020 investigation found the church secretly managed a $100 billion investment fund, Ensign Peak Advisors, which amassed vast tax-free wealth by investing in hedge funds, Chevron, Visa, Apple and some of the largest large landholdings in the United States.

Prof Cragun said the church, for a time, disclosed its charitable giving, which amounted to less than 1% of its income. “It’s shocking how little they give,” he suggested. “But on the other hand, that’s the part that’s really interesting: they advertise it every time. And that’s when the ex-Mormon in me thinks, “That’s exactly what Jesus said not to do.”

He said many of the church’s current leaders – called apostles – had backgrounds in corporate leadership positions. The international church, he said, was run like a multinational corporation, with virtually identical practices around the world.

According to Cragun, the church is likely to “milk the system for every tax deduction it can…And it’s very, very good at it.”

Ex-Mormon senior Simon Southerton has been embroiled in a complaint to the Australian Charities and Not-for-Profits Commission over the church’s tax practices.

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A geneticist, he broke with the church in the 2000s after discovering his origin story that some Native Americans were descended from Jews was incorrect. “The big problem was that I was a bishop (similar to a pastor),” Dr Southerton said. “I went there overnight knowing absolutely that the Book of Mormon was a 19th century invention.

He wrote a book on the matter and was later excommunicated. He said it was implausible that $70 million a year would be given through Australia.

Sunday age and Herald of the Sun The investigation also revealed that in Canada, all of the church’s charitable donations are diverted to three campuses of a Mormon university in the United States. The sum – around 70 million Canadian dollars ($74.5 million) per year – seems legal, as Brigham Young University campuses have several hundred Canadian students.

The Canada Revenue Agency said it was prevented by confidentiality provisions from commenting on specific cases. He said all donations must be made to qualified charitable beneficiaries under Canadian law.

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