$100 billion dollars. That’s the amount of money the Church of Jesus Christ of Latter-day Saints has allegedly earned over two decades of investment on tithings from its members. That money isn’t being spent on charitable endeavors, as required by law. A former employee of the Church’s non-profit investment firm, Ensign Peak Advisors, has complained to the IRS.
According to the whistleblower complaint, the LDS Church takes in about $7 Billion in tithing each year, spends $6 billion and invests the rest. Over 22 years that has amounted to $100 billion.
David Nielsen did not respond to an interview request. But his twin brother, Lars, who helped him with the complaint, has gone public.
Lars Nielsen alleges Ensign Peak Advisors is out of compliance with their nonprofit status because they’ve never made a charitable donation. Instead, he said, they have bailed out two for-profit entities of the LDS Church.
“The principle concern was to get the information to the American taxpayer,” he said, “And to the tithe paying Mormon so they could understand what was really happening with their church.”
In a statement, the LDS Church’s First Presidency wrote, “Claims being currently circulated are based on a narrow perspective and limited information. The Church complies with all applicable law governing our donations, investments, taxes, and reserves.”
The brothers have faced pushback that their complaint is really about a potential reward money David Nielsen could get from the IRS. Which could be 15 to 30 percent of what the IRS collects.
But Lars Nielsen said the personal and social costs outweigh the potential benefit for his brother, who is still a member of the LDS Church.
“If they knew those things I think it would be harder for them to make such comments on public websites,” Nielsen said.
But is the LDS Church really at risk?
Sam Brunson, a law professor at Loyola University in Chicago who writes about religious institutions and tax law, says investment organizations such as Ensign Peak Advisors can, in fact, qualify for tax-exempt status but they’re supposed to make charitable donations “commensurate in scope” to what they bring in. Brunson says while the law is vague, the expectation for charitable is definitely higher than zero.
“If the whistleblower is correct — that Ensign Peak has never distributed anything to the Church — that’s almost certainly not ‘commensurate in scope,’” Brunson said.
If the IRS pursues the complaint, Ensign Peak Advisors could lose tax exempt status and owe taxes for past years. Or, in a less likely scenario, they could try to get ahead of it by making a significant charitable donation to the LDS Church, putting some of that alleged $100 billion to use.
