Could it be that Pastor Luke Torian, who is a Democrat running in Virginia 52nd House District, might be in trouble with the law? After a June 12th confrontation with a voter who questioned whether or not Torian could provide a copy of his church’s (First Mount Zion Baptist Church) IRS 990 report, I am starting to wonder whether or not he might be hiding something.
This voter inquired about the 990 report, after hearing the claims from some disgruntled members of Torian’s congregation that he is overpaid — allegedly he makes $200,000 and his wife, who serves as the church’s Associate Pastor, is said to pull in $100,000 (which together is surprisingly more than TRIPLE the median household income of those living in the zip code of 22026). Many from within the community report that they have seen Torian driving around in a Hummer and a Lexus, sporting Rolex watches.
Torian refused to provide a copy of the 990 report to the voter, and said, “I don’t care about the IRS.” The voter, then handed Torian a copy of the law, and he still refused to comply with the request.
Torian is required by law immediately to hand over the 990 reports to any member of the public who requests this during regular business hours, as his church is a 501(c)(3) organization, and all non-profits must comply with this request. The information in a church tax return must include unrelated business income and the top five compensated employees of the church.
Now, the registration and reporting rules for churches are slightly different, and according to this IRS publication,
“Churches that meet the requirements of IRC section 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.
“Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because such recognition assures church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits. For example, contributors to a church that has been recognized as tax exempt would know that their contributions generally are tax-deductible.”
This law was enacted in 1987 after TV ministers, such as Jim and Tammy Faye Bakker were found living the lavish lifestyle off of their congregations without giving much back in the way of charitable services.
If Torian’s church is relying upon the automatic 501(c)(3) exemption and did not file (which would be very curious for a church this large with a self-described multi-million dollar facility), then he should have stated that to the voter. Instead, the fact that Torian was handed a copy of the law, refused to read it and was so defensive is not only suspicious, but raises questions about what sort of legislator he would be and how he would hold the public trust.
Regardless of whether or not Torian’s church is required filed a tax return, the following would still apply. Again, from the IRS:
Churches and religious organizations, like all exempt organizations under IRC section 501(c)(3), are prohibited from engaging in activities that result in inurement of the church’s or organization’s income or assets to insiders (i.e., persons having a personal and private interest in the activities of the organization). Insiders could include the minister, church board members, officers, and in certain circumstances, employees. Examples of prohibited inurement include the payment of dividends, the payment of unreasonable compensation to insiders, and transferring property to insiders for less than fair market value. The prohibition against inurement to insiders is absolute; therefore, any amount of inurement is, potentially, grounds for loss of tax-exempt status. In addition, the insider involved may be subject to excise tax.
Would TRIPLE the median household income for the area be seen as unreasonable compensation to an insider? You make the call…
Then there is the issue of employment taxes.
The compensation that a church or religious organization pays to its ministers for performing services in the exercise of ministry is not subject to FICA taxes. However, income that a minister earns in performing services in the exercise of his ministry is subject to SECA tax, unless the minister has timely applied for and received an exemption from SECA tax.
We’ve seen some of Obama’s cabinet nominees taken down for failure to pay self-employment taxes. People have the right to know if the Democratic candidate in the 52nd District has been paying his.
Pastor Torian owes it to the people of the 52nd District to clear the air on all of this. I call upon Pastor Torian to release immediately any tax records for his church that have been filed over the past year, to disclose his salary and that of his wife as well as any other compensation that they may receive from the church, and to release his most recent personal tax returns. The allegations made by members of his own congregation are troubling. His attitude towards the law that he exhibited before a potential constituent is even more so.