“It’s just a reminder of the purpose of the funds,” he said. “Many of the funds come from people who don’t make a lot of money.”
A Debate That Started in Salt Lake
Among rank-and-file members of the church, the whistleblower report unleashed an intense debate about tithing and how the church uses its vast resources.
On a recent snowy Sunday at a Salt Lake City meetinghouse, members said they trusted church leaders with their own money, and would continue to donate 10% of their income. “They use it well,” said Lasi Kioa, a 61-year-old immigrant from Tonga and a lifelong church member. “They help other people. They build the church. I believe in that.”
But Sam Brunson, a church member and tax law professor at Loyola University, said he wished church officials would use the $100 billion to help those in need today.
“They could go a good way to eradicating malaria, or fix Puerto Rico’s electrical grid,” he said. Alternatively, he said, the church could change what it considers tithing, allowing members to give 10% of their income to charity, rather than to the church itself.
Mr. Waddell, the member of the ecclesiastical arm that oversees Ensign Peak, said that with more than 16 million members there would always be some difference of opinion, but the vast majority of members have “expressed appreciation for the success we have had in managing the finances.”
Mr. Nielsen’s report, which was first reported by the Washington Post, stoked this debate. The report alleged the fund made no charitable contributions despite being incorporated as a tax-exempt charity. Fund and church officials said they haven’t violated any tax laws, and that the church organization as a whole, of which Ensign Peak is a part, puts nearly $1 billion a year toward humanitarian causes and charities. The IRS, which hasn’t accused the church of any wrongdoing, said it doesn’t comment on specific whistleblower claims. Mr. Nielsen didn’t respond to requests for comment.
Tax specialists familiar with the IRS’s whistleblower program said they didn’t expect the claim against Ensign Peak to be successful. The program receives many more claims than it acts on, and it has historically been reluctant to pursue tax issues involving churches, which have special status under the tax code. If the whistleblower’s claim is successful, that person could receive up to 30% of the proceeds collected by the IRS.
The whistleblower also accused Ensign Peak of illegally using tax-exempt donations to bail out two business ventures during the financial crisis—a life insurance company the church owned and construction of the City Creek Center, a Salt Lake City mall across the street from the church’s offices. Church officials confirmed to the Journal they had made these payments but denied they were illegal.
Gerald Causse, the presiding bishop, said the payouts during the financial crisis weren’t charitable disbursements at all, but investments. “It’s not an expenditure,” he said. “Tomorrow we can sell it and it will come back with a return.”
In the interview with the Journal, church officials maintained the payouts were not made with tithing funds, because, they said, most of the money in Ensign Peak doesn’t come directly from tithing but from returns on investment
Tax lawyers have publicly debated whether Ensign Peak violated any laws as alleged by the whistleblower. Mr. Brunson, the tax law professor, doesn’t think so. But as a church member, he said he finds the lack of transparency frustrating, even if it is legal.
“I’m a stakeholder in the church, and society has some stake in the church too,” he said. “Even though I’m willing to tithe blindly, I would like to see what’s happening with that money.”
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