Linda's Litigation Options

[Pickle]

Bob, No. It is highly unlikely (impossible is probably more accurate) that Judge Rowes decision would ever set a precedent on a trial on the issues in either IL or the Federal courts.

Gailon thought it could be used as a basis for such, but of course, he could be wrong.

[mozart]

hmm....something just came to mind and i'll admit right now that i'm dumb as a post when it comes to stuff like this, but i am logical.
could the concern for the loss of tax-exempt status for 3abn be a reason to merge (venture) with other tax-exempt entities? let's say if the merge is with more than AF; like for instance, ASI, Weimar & AF or could there be more involved to save this 501c3 status before it's ruled on? could this be the "emergency"?

It seems to me, Eirene, that you are intentionally minimalizing the potential significance of that case. The decision was that 3ABN is not operating as a 501©3 should, correct? And even if the judge was not a federal judge, her findings could be used in the future as a basis for revoking 3ABN's tax-exempt status. Right?

That being the case, that decision is extremely significant even though 3ABN currently still is a 501©3.

[LaurenceD]

hmm....something just came to mind and i'll admit right now that i'm dumb as a post when it comes to stuff like this, but i am logical. could the concern for the loss of tax-exempt status for 3abn be a reason to merge (venture) with other tax-exempt entities? let's say if the merge is with more than AF; like for instance, ASI, Weimar & AF or could there be more involved to save this 501c3 status before it's ruled on? could this be the "emergency"?

You're not alone. I was thinking along those same lines. When we see the final results, I think we'll propbably realize how simple it was...follow the money. I was going to compile a list of all the slots AF would fill to make it possible for 3abn to claim a true exemption. There might be a more solid church connection. DS said they were missing a school to teach evengelism. AF could nicely fill that slot and 3abn could provide the area. And there's more, but this is all evil surmising, mozart. The compound would be a lot happier if we'd stop trying to finish a bad picture of a puzzle they started and left us to guess about.

[mozart]

you callin' me evil LD?
take that !!

You're not alone. I was thinking along those same lines. When we see the final results, I think we'll propbably realize how simple it was...follow the money. I was going to compile a list of all the slots AF would fill to make it possible for 3abn to claim a true exemption. There might be a more solid church connection. DS said they were missing a school to teach evengelism. AF could nicely fill that slot and 3abn could provide the area. And there's more, but this is all evil surmising, mozart. The compound would be a lot happier if we'd stop trying to finish a bad picture of a puzzle they started and left us to guess about.

[Fran]

hmm....something just came to mind and I'll admit right now that I'm dumb as a post when it comes to stuff like this, but i am logical.
could the concern for the loss of tax-exempt status for 3abn be a reason to merge (venture) with other tax-exempt entities? let's say if the merge is with more than AF; like for instance, ASI, Weimar & AF or could there be more involved to save this 501c3 status before it's ruled on? could this be the "emergency"?

Mozart,

I think you are right on!

Don't feel like a post! You are not! Isn't it fun to have an a-ha moment?

This is becoming a great thread because many are contributing. Others are clearing up the things I am not to intellectually inclines to study or understand, such as State Law!

I worked for the Federal Government so therefore, I understand more of Federal law. That was the emphasis of my studies and familiarity of my work experience.

However, this does not mean we are stupid!

This thread is a co-operative event. We all complement each other. Others will clarify points others don't catch, or may feel is irrelevant, but in actuality it is relevant.

I appreciate all the comments that have been made. It is my hope this will continue in the days to come.

I haven't finished my reply to Penny as yet. When I do, I want to move to the IL vs 3ABN Property Tax lawsuit from where my understanding is and I beg others to fill in where I am lacking.

I believe the case needs to be see from the right, left and center. I believe we need to turn it over and stand it back up to see it from many prospectives.

Remember folks, no arguing that your point is right and everyone else is wrong! There are many ways to say the same thing. Let us explore those.

You all know where my emphasis will be. Please fill in what I miss and misrepresent. No one is 100% right and no one is 100% wrong. Come let us reason together and let the "Now, I get it's" run rampant.

Special request. No put downs of anyone please. We have been there and done that. I will try to be a good girl if you will try to be good too.

Please continue to post on your expertise on the law. I appreciate your knowledge and understanding of matters that are not my forte`.

This is going to be great because we have views from you, Lawrence D, Observer, Bob Pickle and MANY others. I am really excited about this!

[Observer]

Mozart,

I think you are right on!

Don't feel like a post! You are not! Isn't it fun to have an a-ha moment?

This is becoming a great thread because many are contributing. Others are clearing up the things I am not to intellectually inclines to study or understand, such as State Law!

I worked for the Federal Government so therefore, I understand more of Federal law. That was the emphasis of my studies and familiarity of my work experience.

However, this does not mean we are stupid!

This thread is a co-operative event. We all complement each other. Others will clarify points others don't catch, or may feel is irrelevant, but in actuality it is relevant.

I appreciate all the comments that have been made. It is my hope this will continue in the days to come.

I haven't finished my reply to Penny as yet. When I do, I want to move to the IL vs 3ABN Property Tax lawsuit from where my understanding is and I beg others to fill in where I am lacking.

I believe the case needs to be see from the right, left and center. I believe we need to turn it over and stand it back up to see it from many prospectives.

Remember folks, no arguing that your point is right and everyone else is wrong! There are many ways to say the same thing. Let us explore those.

You all know where my emphasis will be. Please fill in what I miss and misrepresent. No one is 100% right and no one is 100% wrong. Come let us reason together and let the "Now, I get it's" run rampant.

Special request. No put downs of anyone please. We have been there and done that. I will try to be a good girl if you will try to be good too.

Please continue to post on your expertise on the law. I appreciate your knowledge and understanding of matters that are not my forte`.

This is going to be great because we have views from you, Lawrence D, Observer, Bob Pickle and MANY others. I am really excited about this!

From where I am standing, I believe that this is a very complex issue. I believe that it may have multiple factors, and that we cannot pin it to one factor, ruling out all others.

Legal: Regardless of the applicability of Judge Rowe's decision in other venues, it would be prudent for 3-ABNs legal advisers to fix any issues that they saw. I think that we can see a series of changes in which this is being done. That is simply a wise move on their part. It is a responsible move. 3-ABN owes it to those who contribute to fix any potential problems prior to they becoming an actual issue.

Mission: Both Amazing Facts and 3-ABN have a stated mission. As I look at their organization, and the resources that they each have, there is some wisdom in combining assets to accomplish their individual missions. The reason for that is that each has some assets not held by the other that would benefit the other. I.e. AF has some assets that would be of benefit to 3-ABN, and 3-ABN has some assets that would be of benefit to AF. In the interests of economy, and reduction of duplication, there are benefits to each if they can come to an agreement as to how they will unite.

I can also come up with several more reasons why some sort of a merger would be of mutual benefit to one or both AF and 3-ABN. However, some of these get into the realm of speculation in a manner that I do not want to get into at the moment. Maybe I will later. But, for now, I would like to wait and see. I do think that we are going to have to wait and see for some of these.

One such issue: The impoundment of the records in the litigation that has been filed against Gailon Joy and Bob Pickle is of interest to me. I would very much like to read those records. It may be that they contain information that would help us to understand more of what is going on with 3-ABN? Or, it might be that they do not. I do not know.

[LaurenceD]

I believe the case needs to be see from the right, left and center. I believe we need to turn it over and stand it back up to see it from many prospectives.

Write on! Maybe this needs a thread of it's own...and we could somehow bring all the important related posts together.

I'd like to tie some things together. You mentioned federal law and state law. Lurker just posted a link on another thread regarding IRS guidelines for defining a church. In that link http://www.runquist.com/ARTICLE_ReligTax.htm author Runquist clarifies some distinctions showing that property tax is a state issue and religious classification a federal issue--and that why judge Rowe repeats "meaning" of Section 501©(3)...

The Internal Revenue Code provides certain benefits to churches not available to other nonprofit exempt organizations (including other religious organizations). Because of this, it is important to know how a "church" is defined.

(snip)


The property tax treatment of exempt organizations depends on the use which is made of the property. This aspect of taxation is exclusively a matter of state law. For example, some states exempt the parsonage from tax, while others do not.

Observer referred to 3abn's property exemption as a "seminal case that would lay the groundwork for potential issues on a wider scale regarding taxation of religious organizations."

Then notice what judge Rowe says...

applicant is not only not a religious organization, but, more importantly, does not
primarily use the property for religious purposes without a view to profit.

So, there are several things going on here that may lead to a misunderstanding. 3abn in a non-profit organization under the IRS code, and a not-for-profit corporation under Illinois state constitution, but it is neither a church or a religious organization, so it did not qualify for property tax exemption (a state matter). I think it's important to recognize this distiction.

There's a couple important sections from Lurkers link I'd like to copy and paste, in case no one wants to sort through the entire artcle.

PROPERTY TAX EXEMPTIONS

The property tax treatment of exempt organizations depends on the use which is made of the property. This aspect of taxation is exclusively a matter of state law. For example, some states exempt the parsonage from tax, while others do not.

In the late 1960's, a challenge was brought in New York, contending that the New York City Tax Commission's grant of exemption to church property indirectly requires the taxpayer to make a contribution to religious bodies and thereby violates the First Amendment. this case was appealed to the United States Supreme Court, which upheld the exemption as being constitutional. The court discussed the issue of constitutional neutrality, and noted

"the basic purpose of these provisions, which is to insure that no religion be sponsored or favored, none commanded, and none inhibited."(51) It further noted that the purpose of the exemption was not to advance nor to inhibit religion. "It has not singled out one particular church or religious group or even churches as such; rather, it has granted exemption to all houses of religious worship ... We cannot read New York's statute as attempting to establish religion; it is simply sparing the exercise of religion from the burden of property taxation levied on private profit institutions."(52)

The court also noted that all 50 states have provided for tax exemption of places of worship, most by constitutional guarantees, for as long as the federal government has exempted them from income tax.

In California the issue is addressed in Article XIII of the California Constitution and in Revenue and Taxation Code Sections 214-215. The Constitution makes certain property tax exemptions mandatory and allows for issuance of a welfare property tax exemption to other entities on a discretionary basis. Church property used exclusively for religious worship is exempt under Article XIII, Section 3(f). If church property is also used for a school, the religious exemption is available under Revenue and Taxation Code Section 207. If the property is used for any other purpose, the church/religious organization must seek a property tax exemption under the "welfare exemption" found in State Constitution Article XIII, Section 4( and related provisions of the Revenue and Taxation Code (Sections 214 and 215). This exemption is available to property used exclusively for religious, hospital or charitable purposes and owned by a nonprofit organization organized exclusively for such purpose, no part of whose net earnings inure to the benefit of any private individual. In order to be eligible, the charitable, religious or hospital organization's articles of incorporation must contain a provision which irrevocably dedicates the entity's property to religious or charitable purposes upon dissolution (i.e., a "charitable dedication clause").

It should not be assumed that the property of an exempt organization is automatically exempt. In California, a yearly filing must be made for each of the exemptions claimed. The deadline for filing Welfare Exemptions and the educational property exemption is March 15 of each year; the deadlines for filing notice of the Church and Religious Exemptions is March 31 of each year. If the deadline is not met, the exemption will be deemed to be waived. A late filing may be made, but the full exemption will not be granted.

If a portion of the property is used for the production of unrelated business taxable income, then the organization will only be entitled to a partial exemption.

Again, it should be noted that property tax exemptions are a matter of state law. If the organization has property in other states, their state law should be reviewed to determine the exempt status of each parcel.

UNREASONABLE COMPENSATION ISSUES

1. CEP Audits of Televangelists

After many years of auditing exempt organizations on a "hit and miss" type basis, the IRS developed a coordinated examination procedure that it is using to audit exempt organizations. When the IRS began these exams, one type of organization subject to these exams were televangelists.

Probably the most common reason today for revocation of exemption is inurement, including issues of excessive compensation. This is also the area that appears to make it to the front page of the newspaper most quickly. As a result, the compensation paid to executives, insiders, directors, and officers, should be carefully reviewed. If the organization is reluctant to have this information made public, it is likely that the IRS will find it to be unreasonable, and thus in violation of the requirement that no funds of a nonprofit inure to the benefit of any private individual.

The examinations of media evangelists support this finding. On June 30, 1993 it was reported that there were seven such cases involved in the coordinated examination procedure. Five of these had issues of inurement, two had issues of private benefit, and five had employment tax issues being examined. The IRS also reported that of the twenty-one media evangelist examinations it was conducting or had conducted, five involved private benefit issues, fourteen involved inurement issues involving compensation, five involved other types of inurement, eight had employment tax issues, and sixteen had income tax issues.

The determination of reasonableness of compensation, as well as what benefits are taxable to the individual are the same for exempt organizations as it is for taxable corporations. Section 162 and its regulations apply to exempt organizations and their employees.

[Fran]

Write on! Maybe this needs a thread of it's own...and we could somehow bring all the important related posts together.

I'd like to tie some things together. You mentioned federal law and state law. Lurker just posted a link on another thread regarding IRS guidelines for defining a church. In that link http://www.runquist.com/ARTICLE_ReligTax.htm author Runquist clarifies some distinctions showing that property tax is a state issue and religious classification a federal issue--and that why judge Rowe repeats "meaning" of Section 501©(3)...

The Internal Revenue Code provides certain benefits to churches not available to other nonprofit exempt organizations (including other religious organizations). Because of this, it is important to know how a "church" is defined.

(snip)
The property tax treatment of exempt organizations depends on the use which is made of the property. This aspect of taxation is exclusively a matter of state law. For example, some states exempt the parsonage from tax, while others do not.

Observer referred to 3abn's property exemption as a "seminal case that would lay the groundwork for potential issues on a wider scale regarding taxation of religious organizations."

Then notice what judge Rowe says...

applicant is not only not a religious organization, but, more importantly, does not
primarily use the property for religious purposes without a view to profit.

So, there are several things going on here that may lead to a misunderstanding. 3abn in a non-profit organization under the IRS code, and a not-for-profit corporation under Illinois state constitution, but it is neither a church or a religious organization, so it did not qualify for property tax exemption (a state matter). I think it's important to recognize this distiction.

There's a couple important sections from Lurkers link I'd like to copy and paste, in case no one wants to sort through the entire artcle.

PROPERTY TAX EXEMPTIONS

The property tax treatment of exempt organizations depends on the use which is made of the property. This aspect of taxation is exclusively a matter of state law. For example, some states exempt the parsonage from tax, while others do not.

In the late 1960's, a challenge was brought in New York, contending that the New York City Tax Commission's grant of exemption to church property indirectly requires the taxpayer to make a contribution to religious bodies and thereby violates the First Amendment. this case was appealed to the United States Supreme Court, which upheld the exemption as being constitutional. The court discussed the issue of constitutional neutrality, and noted

"the basic purpose of these provisions, which is to insure that no religion be sponsored or favored, none commanded, and none inhibited."(51) It further noted that the purpose of the exemption was not to advance nor to inhibit religion. "It has not singled out one particular church or religious group or even churches as such; rather, it has granted exemption to all houses of religious worship ... We cannot read New York's statute as attempting to establish religion; it is simply sparing the exercise of religion from the burden of property taxation levied on private profit institutions."(52)

The court also noted that all 50 states have provided for tax exemption of places of worship, most by constitutional guarantees, for as long as the federal government has exempted them from income tax.

In California the issue is addressed in Article XIII of the California Constitution and in Revenue and Taxation Code Sections 214-215. The Constitution makes certain property tax exemptions mandatory and allows for issuance of a welfare property tax exemption to other entities on a discretionary basis. Church property used exclusively for religious worship is exempt under Article XIII, Section 3(f). If church property is also used for a school, the religious exemption is available under Revenue and Taxation Code Section 207. If the property is used for any other purpose, the church/religious organization must seek a property tax exemption under the "welfare exemption" found in State Constitution Article XIII, Section 4( and related provisions of the Revenue and Taxation Code (Sections 214 and 215). This exemption is available to property used exclusively for religious, hospital or charitable purposes and owned by a nonprofit organization organized exclusively for such purpose, no part of whose net earnings inure to the benefit of any private individual. In order to be eligible, the charitable, religious or hospital organization's articles of incorporation must contain a provision which irrevocably dedicates the entity's property to religious or charitable purposes upon dissolution (i.e., a "charitable dedication clause").

It should not be assumed that the property of an exempt organization is automatically exempt. In California, a yearly filing must be made for each of the exemptions claimed. The deadline for filing Welfare Exemptions and the educational property exemption is March 15 of each year; the deadlines for filing notice of the Church and Religious Exemptions is March 31 of each year. If the deadline is not met, the exemption will be deemed to be waived. A late filing may be made, but the full exemption will not be granted.

If a portion of the property is used for the production of unrelated business taxable income, then the organization will only be entitled to a partial exemption.

Again, it should be noted that property tax exemptions are a matter of state law. If the organization has property in other states, their state law should be reviewed to determine the exempt status of each parcel.

UNREASONABLE COMPENSATION ISSUES

1. CEP Audits of Televangelists

After many years of auditing exempt organizations on a "hit and miss" type basis, the IRS developed a coordinated examination procedure that it is using to audit exempt organizations. When the IRS began these exams, one type of organization subject to these exams were televangelists.

Probably the most common reason today for revocation of exemption is inurement, including issues of excessive compensation. This is also the area that appears to make it to the front page of the newspaper most quickly. As a result, the compensation paid to executives, insiders, directors, and officers, should be carefully reviewed. If the organization is reluctant to have this information made public, it is likely that the IRS will find it to be unreasonable, and thus in violation of the requirement that no funds of a nonprofit inure to the benefit of any private individual.

The examinations of media evangelists support this finding. On June 30, 1993 it was reported that there were seven such cases involved in the coordinated examination procedure. Five of these had issues of inurement, two had issues of private benefit, and five had employment tax issues being examined. The IRS also reported that of the twenty-one media evangelist examinations it was conducting or had conducted, five involved private benefit issues, fourteen involved inurement issues involving compensation, five involved other types of inurement, eight had employment tax issues, and sixteen had income tax issues.

The determination of reasonableness of compensation, as well as what benefits are taxable to the individual are the same for exempt organizations as it is for taxable corporations. Section 162 and its regulations apply to exempt organizations and their employees.

LaurenceD;

I agree!

My parts will be financial. The document is full of information to discuss. The 46 page document covers a lot of diversified information. This is one that needs everyone working together for sure.

Thanks for your post. This information is what we need!

I responded to Lurkers post in the other thread. Maybe Clay can copy those over to here or into a new thread. Of course another thread will have to include what is here already.

Yep, I'm excited about that. Would you mind arranging that?

Observer; No way am I trying to limit it to one area. We need all areas explored. Not just financial, not just Federal and not just State. We need to explore it all and see where we are and each of us will have greater understanding in areas we may not have previously understood.

Thanks for your help.

[LaurenceD]

Previous discusion--2006. Here's a different analysis of the case by FHB, in response to PP...
http://www.blacksda.com/forums/index.php?s...1142&st=165

Panama_Pete: Here's something people seem to be missing:

3ABN was organized as " a general not-for-profit corporation." The confusion is that you are referring to the 3ABN corporation as a "ministry."

According to the tax case, 3ABN was not organized as an Illinois religious corporation, but as as general not-for-profit corporation.

General not-for-profit corporations can solicit for donations, but, unlike religious organizations, they are not automatically entitled to real estate tax exemptions.

Danny Shelton simply set up a private business for himself. That's all it is.
Read it all on page 23.

http://www.revenue.state.il.us/legalinform...s/pt/pt04-1.pdf

"As a preliminary matter, applicant [3ABN] is not organized and operated as a religious corporation under the Illinois Religious Corporation Act, found at 805 ILCS 110/0.01 et seq. Rather, applicant is incorporated under the General Not for Profit Corporation Act. 805 ILCS105/101.01 et seq. The Illinois General Assembly has recognized organizational and operational differences between the two types of organizations and has established different and separate statutory schemes to govern those differences. Implicit in such legislative action is the recognition that religious corporations and general not for profit corporations are separate, distinct, and different legal entities. Therefore, as a matter of law, applicant [3ABN] is not a religious corporation. "

fallible humanbeing: PP,

Okay, this is in fact the primary issue here. Thompsonville Community High School District No. 112, Thompsonville School District No. 62, Franklin County Board of Review, and The Department of Revenue of the State of Illinois are attempting to establish precedent with this case. If they are successful all entities that have organized as GNFP can come under review for past and future property tax collection. This case is entirely about property taxes and the windfall that some local entity, such as the school district, may incur by stripping GNFPs like 3ABN and Moody Bible Institute of their tax-exempt status.

As you stated, being a GNFP neither insures nor disallows the property tax exempt status. The defining point is the endeavor of the entity. In this case, just as with Tri-State Christian TV, the issue is, are the entity’s endeavors religious in nature. Tri-State Christian TV (WTCT) is a non-Adventist television ministry that organized as a GNFP and was granted property tax exempt status by the Sate of Illinois (WTCT is a comparable entity). The trial court would not allow 3ABN to enter into evidence information about Tri-State and thwarted efforts by 3ABN attorneys to gather additional information about Tri-State by quashing a subpoena to depose the president of WTCT. The allowance of this evidence would have made it unquestionably clear that there was a double standard applied to 3ABN by the State of Illinois. The trial judge couched her decision by claiming that this was addressing a “constitutional challenge” and this trial was not the proper "forum" for this evidence. Additionally, she supported her decision by citing case law that stands for the opposite of the way in which she used it.

The trial judge, in her decision makes the following statements in regards to the question of what is 3ABN’s primary purpose.

“ 3ABN has not established that it has officers deeply involved in religious teaching that serve to accomplish the promotion of Christian education.”

“[nor] is there any indication in the record that Danny Shelton is traveling to advocate the Seventh-day Adventist doctrine or faith.”

“the evidence shows that 3ABN directly engaged in little or no specific religious activity and use the property in question for no such purpose”

The central part of the judge’s decision (that 3ABN was not a religious ministry) was that 3ABN’s programming and operation were not religious in nature and did not support the religious endeavors of the Seventh-day Adventist Church. She cited that the programming contained health, gardening, cooking, music programs, family, and health and lifestyle topics, claiming these were not religious in nature. Her argument was that 3ABN was “advocating a way of life, but it was a lifestyle that applicants favor, not a religion.”

According to Illinois law, to qualify under law for the property tax exemption two questions have to be satisfied:

1. Does the entity have primarily religious or charitable purposes?
2. Is the property used for the religious purposes of the entity?

In essence the trial judge ignored and in some cases refused to hear, evidence and testimony that established 3ABN as an entity whose primary purpose was religious, and that its property was used to achieve such ends. Her decision flies the face of Illinois law.

This is merely a snapshot of the case, but it is the core of the case. It is obvious that what the trial judge was focusing on has nothing to do with many of the financial issues that much of the material presented here (BSDA) has identified as being the reason(s) for the case between 3ABN and the Sate of Illinois. The case is about whether or not the local government, on behalf of the school district, can collect taxes on the 3ABN property. And, as stated before, this has far reaching ramifications for all GNFPs that are primarily religious or charitable in the endeavors.

- fhb

I've underlined the part above that is of interest here, but here it is again..

In essence the trial judge ignored and in some cases refused to hear, evidence and testimony that established 3ABN as an entity whose primary purpose was religious, and that its property was used to achieve such ends. Her decision flies the face of Illinois law. -FHB

This is perhaps the main focus. FHB obviously has taken the postion that 3abn's property was being used for religious purposes, but does not comment on whether it was with or without a view to profit, or whether 3abn was involved in charity of any kind. Also, FHB does not discuss the dsitinction between relgious activities, or whether 3abn is a religious organization like others that are exempt. This is probably the essence of the appeal...and why some refer to the case as having greater implication to other religious organizations, "far reaching ramifications for all GNFPs that are primarily religious or charitable in the endeavors." -FHB

[PrincessDrRe]

This is getting even deeper than I thought....

Snacks anyone?

[lurker]

Quote
"3ABN was organized as " a general not-for-profit corporation." The confusion is that you are referring to the 3ABN corporation as a "ministry."

According to the tax case, 3ABN was not organized as an Illinois religious corporation, but as as general not-for-profit corporation."

The following defines a general not for profit corporation. http://tinyurl.com/25lwam

Nonprofit Corporations in Illinois
Most nonprofit corporations in Illinois are governed by the General Not for Profit Corporation Act of 1986, with administrative authority granted to the Secretary of State. Under the Act, a nonprofit corporation may be formed for any of the following purposes, among others:
Charitable, benevolent, or eleemosynary
Educational
Civic or political
Religious
Literary
Athletic
Research or scientific
Agricultural or horticultural
A professional, commercial, industrial, or trade association
Telephone or electrical service on a mutual or cooperative basis
Ownership, administration, or operation of certain properties
Operation of a community mental health board or center
Provision of consumer credit counseling
Promotion, operation, and administration of a ride sharing arrangement [/color]

Being classified as having religious purpose under the general not for profit dorporation act does not make the entity a religious corporation.

Quote "General not-for-profit corporations can solicit for donations, but, unlike religious organizations, they are not automatically entitled to real estate tax exemptions.

"As a preliminary matter, applicant [3ABN] is not organized and operated as a religious corporation under the Illinois Religious Corporation Act, found at 805 ILCS 110/0.01 et seq. Rather, applicant is incorporated under the General Not for Profit Corporation Act. 805 ILCS105/101.01 et seq. "
fallible humanbeing: PP,"

OK,here is another decison by Judge Rowe where the applicant (not 3ABN) was organized under the Religious Corporation Act 805 ILCS 110/0.01 et seq (in other words, this applicant was a relgious organization )

http://www.revenue.state.il.us/legalinform.../pt/pt02-24.pdf and they only got a partial property tax exemption. The issue was how the property was used and whether it was religious use. It did not have an automatic exemption for the whole property just because it was a Religious Corporation.

It would seem that if the State of Illinois was trying to set a precedent, the ruling about the "Set Free Christian Fellowship" would be more to the point than a case against a GNFP.

There is no difference between the requirements of a GNFP and a Religious Corporation that the property must be used for the purpose for which the corporation has non profit status.

And in this case, the primary primary purpose of the entity was not in question just the use of certain areas of the property.

Quote "The trial judge, in her decision makes the following statements in regards to the question of what is 3ABN’s primary purpose.

“3ABN has not established that it has officers deeply involved in religious teaching that serve to accomplish the promotion of Christian education.”

Educational use is listed as one of the qualifications of a gnfp but Judge Rowe finds no evidence of this that would provide the qualification.

Quote"“[nor] is there any indication in the record that Danny Shelton is traveling to advocate the Seventh-day Adventist doctrine or faith.”"“

The question is not whether Danny Shelton is traveling but whether he is advocating the Seventh-day Adventist doctrine or faith when he does. Judge Rowe seems to think he/3ABN does not qualify as a supporting organization of the Adventist church. The Seventh-day Adventist church does qualify as a Religious Organization.

Quote "the evidence shows that 3ABN directly engaged in little or no specific religious activity and use the property in question for no such purpose”

The central part of the judge’s decision (that 3ABN was not a religious ministry) was that 3ABN’s programming and operation were not religious in nature and did not support the religious endeavors of the Seventh-day Adventist Church. She cited that the programming contained health, gardening, cooking, music programs, family, and health and lifestyle topics, claiming these were not religious in nature. Her argument was that 3ABN was “advocating a way of life, but it was a lifestyle that applicants favor, not a religion.”

Again if 3ABN was a religious ministry, it might qualify as a supporting organization of the Seventh-day Adventist Church or as a religious organization.

According to Illinois law, to qualify under law for the property tax exemption two questions have to be satisfied:

1. Does the entity have primarily religious or charitable purposes?
2. Is the property used for the religious purposes of the entity?"
I agree and esentially the Judge felt that 3ABN's primary purpose was to make money and to promote a lifestyle favored by applicant.

This post has been edited by lurker: May 13 2007, 11:19 AM

[PrincessDrRe]

So is it religious/ministry or a "business"...

[Eirene]

Gailon thought it could be used as a basis for such, but of course, he could be wrong.

He usually is.
Especially when he has no law credentials to back up his constant opinions.
BTW How much Did we hear about Linda's new and scary lawyer? The mover and the shaker?
Google him in the state of new hampshire and you can all see a video of him argueing a case in appeals court. Made me "almost" sorry for Linda.

He usually is.
Especially when he has no law credentials to back up his constant opinions.
BTW How much Did we hear about Linda's new and scary lawyer? The mover and the shaker?
Google him in the state of new hampshire and you can all see a video of him argueing a case in appeals court. Made me "almost" sorry for Linda.

I am re posting FHB's information.

fallible humanbeing: PP,

Okay, this is in fact the primary issue here. Thompsonville Community High School District No. 112, Thompsonville School District No. 62, Franklin County Board of Review, and The Department of Revenue of the State of Illinois are attempting to establish precedent with this case. If they are successful all entities that have organized as GNFP can come under review for past and future property tax collection. This case is entirely about property taxes and the windfall that some local entity, such as the school district, may incur by stripping GNFPs like 3ABN and Moody Bible Institute of their tax-exempt status.

As you stated, being a GNFP neither insures nor disallows the property tax exempt status. The defining point is the endeavor of the entity. In this case, just as with Tri-State Christian TV, the issue is, are the entity’s endeavors religious in nature. Tri-State Christian TV (WTCT) is a non-Adventist television ministry that organized as a GNFP and was granted property tax exempt status by the Sate of Illinois (WTCT is a comparable entity). The trial court would not allow 3ABN to enter into evidence information about Tri-State and thwarted efforts by 3ABN attorneys to gather additional information about Tri-State by quashing a subpoena to depose the president of WTCT. The allowance of this evidence would have made it unquestionably clear that there was a double standard applied to 3ABN by the State of Illinois. The trial judge couched her decision by claiming that this was addressing a “constitutional challenge” and this trial was not the proper "forum" for this evidence. Additionally, she supported her decision by citing case law that stands for the opposite of the way in which she used it.

The trial judge, in her decision makes the following statements in regards to the question of what is 3ABN’s primary purpose.

“ 3ABN has not established that it has officers deeply involved in religious teaching that serve to accomplish the promotion of Christian education.”

“[nor] is there any indication in the record that Danny Shelton is traveling to advocate the Seventh-day Adventist doctrine or faith.”

“the evidence shows that 3ABN directly engaged in little or no specific religious activity and use the property in question for no such purpose”

The central part of the judge’s decision (that 3ABN was not a religious ministry) was that 3ABN’s programming and operation were not religious in nature and did not support the religious endeavors of the Seventh-day Adventist Church. She cited that the programming contained health, gardening, cooking, music programs, family, and health and lifestyle topics, claiming these were not religious in nature. Her argument was that 3ABN was “advocating a way of life, but it was a lifestyle that applicants favor, not a religion.”

According to Illinois law, to qualify under law for the property tax exemption two questions have to be satisfied:

1. Does the entity have primarily religious or charitable purposes?
2. Is the property used for the religious purposes of the entity?

In essence the trial judge ignored and in some cases refused to hear, evidence and testimony that established 3ABN as an entity whose primary purpose was religious, and that its property was used to achieve such ends. Her decision flies the face of Illinois law.

This is merely a snapshot of the case, but it is the core of the case. It is obvious that what the trial judge was focusing on has nothing to do with many of the financial issues that much of the material presented here (BSDA) has identified as being the reason(s) for the case between 3ABN and the Sate of Illinois. The case is about whether or not the local government, on behalf of the school district, can collect taxes on the 3ABN property. And, as stated before, this has far reaching ramifications for all GNFPs that are primarily religious or charitable in the endeavors.

- fhb
Finally. That certainly clarifies much. Thanks FHB

[LaurenceD]

That certainly clarifies much.

What does it clarify? Certainly nothing to do with the real focus of the issue..."a view to profit."

You don't need to bother answering if you haven't read the source material. It's not really that much fun trying to have a dialogue with someone who will not catch on. As noted above, FHB leaves off any recognition of the rest of the Illinois State Statute 35 ILCS 200/15-40, which states...

Religious purposes, orphanages, or school and religious purposes.
(a) Property used exclusively for:
(1) religious purposes, or
(2) school and religious purposes, or
(3) orphanages qualifies for exemption as long as it is not used with a view to profit.

FHB states...

According to Illinois law, to qualify under law for the property tax exemption two questions have to be satisfied:

1. Does the entity have primarily religious or charitable purposes?
2. Is the property used for the religious purposes of the entity?

What's needed here is full absorbtion of the state statute, and understanding the reasons behind Judge Rowe's Recommendation.

************************************************************

EXTRA: Let me post her findings of fact so there can be no question:

Charitable Considerations

When determining whether an organization is charitable for purposes of tax exemptions, courts first look at an applicant’s organizational documents.

Illinois courts have long held that the lack of such wording in the organizational document can be used as a basis for determining that an applicant is not a charitable organization as contemplated by the statute.

75. Applicant is not required to pay federal income tax pursuant to a finding by the Internal Revenue Service that applicant is an exempt organization under Section 501©(3) of the Internal Revenue Code. (Applicant’s Ex. Nos. 4, 5)
76. Applicant’s board has no written policy to give away or donate its satellite systems. If an individual were unable to pay the cost of the system, applicant’s secretary would contact Danny Shelton who would determine, with the board’s guidance, whether the product should be given away. “Applicant has no policy that says give away.” (Tr. pp. 295-303)
77. Applicant has no records of materials given away in 2000 or 2001. Applicant has no specific written policy that outlines what factors are used or what direction is given by applicant’s board that allows applicant to distribute items at a reduced rate or free of charge. (Tr. pp. 586-589, 614-616)

The religious property tax exemption also mandates that the property not be “leased or otherwise used with a view to profit.” 35 ILCS 200/15-4020 Applicant’s property is most definitely used with a view to profit.

The operation of 3ABN on the property in question generates a significant profit for applicant.

Regarding 3abn's religious use of property, let me post what Judge Rowe concludes...

Religious Tax Exemption Standards and 3ABN’s Claim for Religious Exemption

As a preliminary matter, applicant is not organized and operated as a religious corporation under the Illinois Religious Corporation Act, found at 805 ILCS 110/0.01 et seq. Rather, applicant is incorporated under the General Not for Profit Corporation Act. 805 ILCS 105/101.01 et seq. The Illinois General Assembly has recognized organizational and operational differences between the two types of organizations and has established different and separate statutory schemes to govern those differences. Implicit in such legislative action is the recognition that religious corporations and general not for profit corporations are separate, distinct, and different legal entities. Therefore, as a matter of law, applicant is not a religious corporation.

...the organization is not using its real property “exclusively for religious purposes” as mandated by the statutes.

Furthermore, it is very evident that applicant is marketing its own products and goods for purchase. Applicant is advocating a way of life but it is a lifestyle that applicant favors, not a religion. Leasing or otherwise using property to promote a lifestyle and to market merchandise does not qualify as a use of property for primarily religious purposes.

[lurker]

In my last post above, I myself quoted and answered what Eirene reposted. It appears she did not read any of it. Or maybe the original link did not work for her. It worked for me when I first posted it but didn't work this morning. I will repeat myself and the corrected link here:

OK,here is another decison by Judge Rowe where the applicant (not 3ABN) was organized under the Religious Corporation Act 805 ILCS 110/0.01 et seq (in other words, this applicant was a relgious organization )

http://tinyurl.com/2wyfcu
and they only got a partial property tax exemption. The issue was how the property was used and whether it was religious use. It did not have an automatic exemption for the whole property just because it was a Religious Corporation.

Even if 3ABN became recognized as a religious organization, the main issue is still how the land is used.

And 3ABN's is not a precedent setting case. Illinois deals with this all the time.

http://tinyurl.com/39unrw

This post has been edited by lurker: May 14 2007, 07:07 AM