Danny Shelton Marries....again, 3abn Options

[summertime]

aaah...the scenic route! If I've learned one thing being an SDA it is that there are two entities moving side by side...the church and the corporation. When I learned of it, I was amazed, but now it is seen as being alert and efficient. If it is offered and not used, what is the benefit? In the beginning days of our church the workers were paid with subsidies. They would fill out forms to say much rent , mortgage, travelling (to and from work), etc. then on pay day they would get a percentage of those amounts. The base salary was something around $50-65.00 per week. And that was an upgrade from the times when they had to request flour, sugar, potatoes, etc.

Priscilla

Now it is the duties of the church elders to visit each member and remind them that if they do not pay their tirhes to pay the ministry, they are doomed for eternity.

[beartrap]

It is my understanding that tax exemption for non-profit religious corporations was instituted because churches were providing basic neccessities of life to poverty stricken people who the government would have to care for otherwise. As I see it, the religious television industry at large, and other groups with an eye for fast profit have taken advantage of that as a means of creating enormous financial empires built on fast talk, sleight of hand, and misdirection of spiritual need. I have heard that the government is starting to take a closer look at the qualifications for a 501-c license, as a result of this blatant misuse.

In the case of 3ABN, we were taken to court by the state of Illinois because they wanted to collect property tax. Here is an exerpt from the judge's ruling. (Emphasis provided by me)

"Based upon the record, I conclude that applicant, a non-religious entity and commercial enterprise, maintains control over the operations conducted on the property at issue.

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. Both applicant’s own corporate growth and the profit inuring to individuals result from applicant’s use of the subject property.
According to applicant’s 2001 financial statement, applicant’s assets have accumulated to over forty-two million dollars ($42,000,000), approximately three times the total revenue for 2001 of slightly under fourteen million dollars ($14,000,000). The income raised and accumulated by applicant has allowed it to purchase an airplane, a state-of-the art recording studio, and other audio/video production facilities and tools. The airplane is a business airplane that is used to promote the Shelton’s commercial enterprises and expand the target audience areas where 3ABN does its business. Danny Shelton uses the airplane to allow him to speak to groups around the world and to advertise that 3ABN is available. Unspecified donations for his speaking come as an added bonus. Applicant provided no information in its financials as to where the amounts listed as contributions come from and/or who contributes. Nor is there any indication in the record that
Danny Shelton is traveling to advocate the Seventh-day Adventist doctrine or faith.

According to the incorporation documents submitted, the four directors of the company are Danny L. Shelton, Linda Shelton, Kenneth Joel Shelton, and Emma Lou Shelton. Applicant failed to produce any evidence that this is not a closely held business with profits inuring to the family. Applicant failed to establish what the relationship is between Kenneth Joel Shelton, Emma Lou Shelton, Danny Shelton and Linda Shelton or that the relationship of Kenneth Joel Shelton and Emma Lou Shelton with Linda and Danny Shelton is not one of direct family. This is of import because these are the only names of the directors of the applicant, and two of them are controlling corporate officers. Applicant has produced no evidence to negate the supposition that Danny and Linda Shelton maintain control of this organization.

I must conclude from the evidence of record, that applicant is controlled by Danny and
Linda Shelton, and all final decisions are made by them and not by a disinterested impartial board of directors.

Linda Shelton is certainly operating a commercial enterprise with the production of her CDs. The programming done on the property generates large sums of money. Applicant has failed to establish that it is not charging everyone that purchases or uses its products, facilities, and programs at prices above the cost of operation. On the contrary, these appear to be armslength transactions producing fees no different than a non-exempt business enterprise would generate. Programming and broadcasting are done for profit on this property, as clearly shown by applicant’s financial statements.

The operation of 3ABN on the property in question generates a significant profit for applicant. Applicant broadcasts its programs to a customer base comprised of persons that purchase applicant’s dish systems. The nature of applicant’s programming and CDs is the encouragement of a healthy lifestyle, for a price. Although there may be religious overtones in applicant’s use of the property, that is not sufficient to qualify for a religious property tax exemption. Were I to recommend a grant of tax exemption for the majority of the property at issue, which is clearly a commercial enterprise, it would give applicant an unfair commercial advantage over other commercially owned and operated radio and television stations.

Although applicant executed the declaration with the General Conference of Seventh-day
Adventists, the declaration simply expresses the support of each entity for the endeavors of the other. The declaration confirms that the Seventh-day Adventist church supports the principles of the applicant but establishes no formal interaction between the two entities. There is no obligation on the part of the applicant to use the property for Seventh-day Adventist activities, doctrines or programming, and in fact applicant charged the Seventh-day Adventist Church for its programs, just like it charged all its other customers.

The mere fact that applicant’s financial records show a surplus may not be sufficient, in and of itself, to prevent 3ABN from obtaining exempt status. See, Children’s Development Center v. Olson, 52 Ill.2d 332 (1972). Nevertheless, the fact that applicant maintained such a sizeable surplus at the same time as it was able to comfortably cover its operating expenses through its cash resources negates a finding that applicant does not use the property with a view to profit. Applicant has not established that it conducts charitable activities when it clearly has the resources to extend the use of the property and equipment on the property to charitable and/or religious entities at no cost. The record does not indicate that it did so.

Applicant asserts that it maintains an (800) area code telephone number strictly for prayer requests. However, none of applicant’s order forms/catalogues state that pastors are available for prayer requests. Rather, the order forms are for the satellite dishes, videos, cassettes and other tangible personal property applicant sells to its viewers and subscribers. Both the (800) and the (618) area code telephone numbers are on those documents.

Danny and Linda Shelton have control of applicant. They regulate the amount they are paid. They have control of programming. They regulate all contracts. Applicant uses this property to produce television programs, to sell equipment, radio and television time, and to sell merchandise, and, absent evidence to the contrary, sales are made at commercially competitive prices."

[Clay]

Interesting information.... I have no problem with 3ABN not having a tax exempt status, it is not a church, it is an independent ministry that by all accounts is run as a business for profit.. As such 3ABN needs to pay taxes....

I do have a problem IF 3ABN is trying to suggest that it is a church affiliated entity, and based on that affiliation deserves a tax exempt status....

[Prisca]

Now it is the duties of the church elders to visit each member and remind them that if they do not pay their tirhes to pay the ministry, they are doomed for eternity.

As one pastor put it...How is your relationship with the Lord? He meant, of course, that the member wasn't paying enough tithe and offering, therefore had little or no relationship with the Lord. If that doesn't work, the baptismal vows are summoned forth!


So the case concerning the tax exemption is still pending or was it lost?

[awesumtenor]

It is my understanding that tax exemption for non-profit religious corporations was instituted because churches were providing basic neccessities of life to poverty stricken people who the government would have to care for otherwise. As I see it, the religious television industry at large, and other groups with an eye for fast profit have taken advantage of that as a means of creating enormous financial empires built on fast talk, sleight of hand, and misdirection of spiritual need. I have heard that the government is starting to take a closer look at the qualifications for a 501-c license, as a result of this blatant misuse.

In the case of 3ABN, we were taken to court by the state of Illinois because they wanted to collect property tax. Here is an exerpt from the judge's ruling. (Emphasis provided by me)

"Based upon the record, I conclude that applicant, a non-religious entity and commercial enterprise, maintains control over the operations conducted on the property at issue....snip

get dat money made... get dat money made... get dat money yo i gotta get dat money made...

In His service,
Mr. J

(quoted portion of response edited for length)

This post has been edited by Clay: Apr 25 2006, 10:21 AM

[PaperTigers]

Last i knew they were claiming that they should be considered tax exempt, especially since they now have a church on the property. The whole thing smells a little fishy to me.

[Clay]

Last i knew they were claiming that they should be considered tax exempt, especially since they now have a church on the property. The whole thing smells a little fishy to me.

a church on the property does not make the whole .org a church.....

[beartrap]

In the area of tax exemption there are several financial considerations. Property tax cuts into profits and depletes that surplus judge Rowe was talking about. If they ever lost the federal 501-c status that would be the end of receiving donations because donors couldn't get tax deductible receipts. The real fear is that loss of the property tax suit in state court is a step in the direction of loss of 501-c status, and provides sufficient foundational legal evidence to justify a move of the federal government in that direction.

[Clay]

In the area of tax exemption there are several financial considerations. Property tax cuts into profits and depletes that surplus judge Rowe was talking about. If they ever lost the federal 501-c status that would be the end of receiving donations because donors couldn't get tax deductible receipts. The real fear is that loss of the property tax suit in state court is a step in the direction of loss of 501-c status, and provides sufficient foundational legal evidence to justify a move of the federal government in that direction.

so what is the status of that situation? They have it for now? Or its about to be revoked?

[beartrap]

They lost the property tax suit to the state, but they still have federal 501-c status.

[Clay]

They lost the property tax suit to the state, but they still have federal 501-c status.

which means what? They are exempt but still paying taxes?

[Zephyr]

As we speak--so to speak---this is not over...The SDA church must not allow itself to be complicit in Danny's schemes to evade taxes. The 3ABN saga is not over and --as the song says--eager eyes are watching...Thompsonville has approx 600 people I understand--from Pastor John. There is no other reason to have a congregation there than to try to hoodwink Uncle Sam and pickpocket the taxpayers.

[awesumtenor]

which means what? They are exempt but still paying taxes?

The entity which holds the deed to their properties is not deemed a non-profit organization. They were probably trying to set it up along the lines of how the Conferences are set up; for instance, there is the Allegheny East Conference and there is the Allegheny East Conference Corporation, which is a not-for-profit corporation that holds the property assets of the Allegheny East Conference... churches, schools, nursing homes and the like. From my brief perusal of the ruling, iut appears that Danny was trying to say that the not-for-profit corporation was church run but the facts have shown that the church has no hand in it's running and the "goods and services" it produces are sold to the church at the same rate as they are to cable systems or what have you and the assets and revenues of that corporation have increased markedly; enough so that the court cannot view the corporate entity as anything other than a for profit endeavor since the profits are retained by the company and not distributed to charitable trusts etc.

One of the resident legal professionals can correct me where I may have gone astray... but that's the gist of this ruling, I believe.

In His service,
Mr. J

[Clay]

so then at some point 3ABN will have to pay taxes thereby losing its tax-exempt status?

[summertime]

As we speak--so to speak---this is not over...The SDA church must not allow itself to be complicit in Danny's schemes to evade taxes. The 3ABN saga is not over and --as the song says--eager eyes are watching...Thompsonville has approx 600 people I understand--from Pastor John. There is no other reason to have a congregation there than to try to hoodwink Uncle Sam and pickpocket the taxpayers.

So does anyone know, is the Federal Government Tax Department looking into the matter of whether 3ABN should remain tax-exempt? Is this a bigggggg worry to the top echelon of 3ABN.? Are they at peace that the government will continue to give them the federal exempt status? Could it be of any interest as to why they sealed a period of time before Linda could speak against 3ABN? Did Linda have anything to do with the questionable documents prepared and presented to the State of Illnois regarding the tax-exempt presentations? This should be of extreme importance to the deep pocket donors to 3ABN. I believe, according to my accountant's figures, that it would take 1,500 donors donating $1,000.00/yearly just to pay for the expenses of the jet plane to be available to Danny and Company.