Church leaders respond to whistleblower’s IRS claims

Dec 17, 2019, 2:27 PM
Multiple Church of Jesus Christ of Latter-day Saints buildings are featured in the photo. The churc...
The Church of Jesus Christ of Latter-day will begin to return to normal temple operations. Photo: Getty Images

SALT LAKE CITY — A day after the Washington Post broke a story about a former employee for the investment arm of The Church of Jesus Christ of Latter-day Saints who claimed that company, Ensign Peak Advisors, does not meet IRS regulations, church leaders are responding.

Responding to the claims

In a statement released Tuesday, church leaders wrote:

We take seriously the responsibility to care for the tithes and donations received from members. The vast majority of these funds are used immediately to meet the needs of the growing Church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the Church and its members. All Church funds exist for no other reason than to support the Church’s divinely appointed mission.

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. We continue to welcome the opportunity to work with officials to address questions they may have.

Church leaders included a link to a 2018 article answering commonly asked questions about the faith’s finances.

The whistleblower

The complaint came from David Nielsen, a former employee of Ensign Peak who resigned earlier this year after his wife and children ended their church membership.

Last month, Nielsen filed a complaint with the IRS in Ogden. He claims Ensign Peak, which he says has holdings worth between $99 and $101 billion, does not meet the IRS’s regulations requiring a percentage of its funds to be used for religious, education or charitable purposes every year.

Before the Washington Post published its story, The Church of Jesus Christ of Latter-day Saints did not offer any comment about the IRS complaint or Nielsen. Instead, it directed the paper to past comments church leaders have made about church finances.

“Latter-day Saint Charities has provided more than $2 billion in aid to assist those in need throughout the world,” President Russell M. Nelson said in October at the faith’s semiannual general conference in Salt Lake City.

That assistance, he noted, is not dependent on recipients being members of the church, which also operates other charities, including helping local members with things like food and housing as needed.

The specific accusations

The Washington Post story reports a claim made by Nielsen, quoting his twin brother Lars, that Ensign Peak violated federal tax rules with two specific payments. In 2009, the Nielsens allege Ensign Peak bailed out Beneficial Financial Group and delivered the company $600 million. Beneficial is a life insurance company operated by Deseret Management Corporation, which manages the church’s for-profit companies. KSL is also owned by DMC.

At the time, the Deseret News reported that Beneficial disclosed the payment from DMC, of about $594 million, to the Utah Department of Insurance, during the financial crisis of 2008. Public filings at the Utah Department of Insurance back up that reporting; they also show Beneficial has paid nearly a half-billion in dividends back to DMC in the years since that bailout.

The second payment involves the church’s City Creek development, a mixed-use property combining shopping, housing and parking in downtown Salt Lake City. The Nielsens claim Ensign Peak Advisors sent $1.4 billion to the church entity that funded City Creek, Property Reserve Inc., between 2010 and 2014. While the church did invest in the housing and parking elements of the project, the shopping center is owned and operated by Taubman Centers, Inc.

More details about those two payments and the accusations can be found in the Deseret News.

The IRS and church rules

Nielsen did not speak to the Post; neither has he offered public comment about his complaint. However, in the letter to the IRS, he asked the federal agency to revoke Ensign Peak’s tax-exempt status and force it to pay back taxes.

Complaints to the IRS are filed under the potential threat of perjury.

The Post did speak extensively to Nielsen’s twin brother, Lars, who also shared videos on YouTube and provided a link to documents he says back his brother’s claims. According to the Post, David Nielsen is seeking a whistleblowing reward: a percentage of those back taxes, if recovered by the IRS.

In the United States, nonprofit groups, which include churches, are exempt from paying income taxes. As an arm of The Church of Jesus Christ of Latter-day Saints, Ensign Peak Advisors is also considered tax-exempt under IRS rules.

Today’s Top Stories


praying football coach...
JESSICA GRESKO Associated Press

Supreme Court sides with coach who sought to pray after game

The court ruled 6-3 along ideological lines for the coach. The justices said the coach's prayer was protected by the First Amendment.
4 days ago
downtown slc general conference temple square...
Simone Seikaly

Church of Jesus Christ of Latter-day Saints reacts to Roe v. Wade

SALT LAKE CITY — Leaders from The Church of Jesus Christ of Latter-day Saints have responded to the Supreme Court decision on Friday that overturned Roe v. Wade. Their statement began by reasserting a belief in the sanctity of human life. It also listed possible exceptions for members who may seek an abortion, which include […]
7 days ago
supreme court. it just ended remain in mexico policy...
MARK SHERMAN Associated Press

Justices rule religious schools must get Maine tuition aid

The most immediate effect of the court's ruling beyond Maine probably will be felt next door in Vermont, which has a similar program.
10 days ago
Photo credit: Just Add Chocolate Facebook page....
Lindsay Aerts

Chocolate shop apologizes, renames Book of Mormon-themed Twinkies

A Utah County chocolate shop has renamed its Book of Mormon-theme Twinkies after it was accused of being racist. The shop has also apologized.
21 days ago
hill cumorah monument...
Mark Jones and Aimee Cobabe

UPDATE: Suspect arraigned for reckless endangerment after gunshots fired at Hill Cumorah Visitors’ Center

No injuries were reported Wednesday after gunshots were heard near the Hill Cumorah Visitors Center in New York. Police say roughly 22 shots were fired.
23 days ago
Ground Broken for Burley Idaho Temple...
Waverly Golden

Ground broken for Burley Idaho Temple

The new temple will sit on a 10.1-acre land owned by the Funk family. Plans have been in place since April 2021 for the new Temple.
27 days ago

Sponsored Articles

Tax Harassment...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
Prescription opioids can be disposed of during National Prescription Take Back Day...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
Follow @ikeyospe...

Tax Tuesday: The Most Common Mistakes People Make When Filing Their Taxes

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
Follow @ikeyospe...

Tax Tuesday: How will last year’s child tax credits affect you?

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
Church leaders respond to whistleblower’s IRS claims