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Will LDS Church suffer consequences after whistleblower claims it sits on $100B?

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Will LDS Church suffer consequences after whistleblower claims it sits on $100B? (Photo: KUTV)

A whistleblower named David A. Nielsen filed a complaint with the IRS alleging The Church of Jesus Christ of Latter-day Saints misled members by sitting on $100 billion in cash reserves that were intended for charitable works.

Nielsen worked for Ensign Peak Advisors, the church’s investment firm in downtown Salt Lake city. His complaint was made public in a Washington Post report published Monday, but it’s not clear what, if anything, the IRS will do.

A spokesperson told 2News that, by law, the agency could not confirm or deny anything — not even whether a whistleblower complaint was made.

Professor Samuel Brunson of Loyola University Chicago, who teaches law and has done research on taxation of religious entities, said news of the Church’s cash reserves has hit a nerve — especially with members of the faith who are required to give 10% of their earnings to the Church.

“It’s raised questions about what the Church is doing with the money, and why is it not doing other things like building or giving to the poor or aiding education instead of sitting on this money,” he said.

But Brunson said there will likely be few, if any tax consequences for The Church of Jesus Christ of Latter-day Saints.

Religious organizations don’t have to apply for tax-exempt status, or provide the IRS with accounting of how they spend their money. They do have to refrain from funding political candidates or efforts. In a worst-case scenario, Brunson said it's possible the Church's investment firm, Ensign Peak Advisors, could be stripped of its tax-exempt status and be forced to pay taxes.

“A church, as long as it's doing religious things under the current tax law, can save money, amass money, invest money,” he said.

Benjamin E. Park, professor of religious history at Sam Houston State University in Texas, said it's not news to many that the Church has a lot of cash, but the amount of the surplus is.

“When these numbers come up, there’s sticker shock,” he said.

Park said the LDS Church teaches its members that tithing or donating will reward them with spiritual blessings, and is an example of a member’s commitment and obedience.

He said most Latter-day Saints trust that Church leaders are responsible stewards of tithing money, but many will likely ask questions about the boundary between proper stewardship and “financial hoarding.” This will likely be of particular concern for some Church members who struggle financially and still tithe to be in good spiritual standing.

“I think there are the struggling parents who can’t afford to pay for their children’s Christmas presents but are expected to give 10% of their paycheck, and now are seeing that the Church has 1$00 billion in financial reserves. That is going to cause a bit more hesitation,” he said.

Park said all of this warrants a discussion on the financial responsibility of a church in the modern age.

Leaders of the Church responded publicly today to allegations published in the Washington Post. You can find their response here.