Shire Free Church Denied Tax Exemption

Issue #4 – Thursday, June 12, 2014

KEENE – In the City of Keene’s Council Chambers on Wednesday, June 11, 2014, the four member Board of Assessors determined that the Shire Free Church has not met the legal burden of proof to qualify as a legitimate religious organization which can be exempted from property tax assessment.

The Shire Free Church is a nondenominational church founded in Keene last year for the purpose of proselytizing a philosophy of peace.  According to its website, the SFC

“is an interfaith, diverse group of people who may not share identical theological beliefs. As a member in or minister of the Shire Free Church, you are a sovereign individual and may be the faith of your choice whether it be Christian, Muslim, Hindu, Buddhist, Daoist, Jewish, Quaker, etc, or following your inner light. Monotheists, polytheists, pantheists, panentheists, and atheists are all welcome, as long as you are peaceful.”

The Church currently has five ministers, and several branches in New Hampshire; the Monadnock branch currently meets weekly on Sunday mornings at its parsonages at 73 and 75 Leverett Street in Keene.  These properties were the site under consideration by the Board of Assessment.

Yesterday’s meeting was attended by at least two dozen members of the public.  Several attendees videotaped the proceedings.

Church founder Mark Edgington addressed the Board.  Edgington is co-host of the nationally syndicated talk radio program Free Talk Live, which is now owned by the Shire Free Church.  Edgington spoke frankly, acknowledging that liberty activists in Keene have developed a certain reputation over the last several years that is not appreciated by all members of the community.  He expressed his belief that the SFC has been singled out for that reason, stating that City Assessor Dan Langille has admitted that no other church in town has been sent a questionnaire by the Board of Assessors in order to prove its own legitimacy. He pointed out that the SFC has paid all but $3500 of its assessed property taxes; the unpaid amount was withheld because the Church is morally opposed to the public school system and therefore has chosen to withhold that portion of its taxes.

Edgington stated that the SFC has met every legal requirement of the State of New Hampshire to be considered a religious organization. He assured the Board that he and the members of the Church are both sincere and determined, and will take this issue all the way to the U.S. Supreme Court if necessary. He pointed out that the costs to the City of a legal battle would far surpass the $3500 per year in withheld property taxes. He also pointed out that another branch of the City government has acknowledged the legitimacy of the Church by deeming it acceptable for purposes of fulfilling community service requirements.

Edgington provided a brief history of the SFC, stating that in his role as co-host of FTL, where he spends six evenings a week talking about liberty and peace to a national audience, he gradually came to realize that he was, in fact, a minister preaching a moral philosophy.  Eventually he decided to formalize this by founding the SFC and declaring the building that hosts the FTL studio as a parsonage.  The building was previously owned by his FTL co-host Ian Freeman, who has legally transferred ownership of the property to the registered New Hampshire nonprofit Shire Free Church Monadnock.

After Edgington’s address to the Board, he fielded several questions from Board member Mary Ann Robator.  When asked if the Church has filed with the IRS for 501(c)(3) tax exempt status, he said no; per the IRS, registration is not mandatory, and since the Church encourages its members not to pay taxes on moral grounds, there’s no point in it applying to make donations to itself tax-deductible.

After a brief Q&A period, Langille read aloud the report which he intended to file with the City. It stated that he doesn’t feel the Church has sufficiently met the burden of proof for tax exempt status. His recommendation was therefore to deny tax exempt status.

Robator stated that political activism flies in the face of religion. The fact that Edgington referred to himself and other Church members as “activists” proves that religion is not their primary motivation in founding the Church. (After this remark, an unidentified member of the public muttered “Martin Luther King Jr.?”) She said “There is a difference between form and substance”, and clearly does not believe in the substance of this Church.

The Board then unanimously voted to deny the Church tax exempt status. The meeting was adjourned only twenty minutes after it began.

When asked after the meeting if he was surprised by the outcome, Edgington chuckled and said “Not in the slightest”.  He indicated that he knew it was going to be an uphill battle, but appeared determined to see it through. Edgington and fellow Church minister Darryl W. Perry spoke with Shire Liberty News about the philosophy of the church, its ministers, and the Keene parsonages.  Similar to the Unitarian Church, membership in the SFC does not require exclusivity; Edgington himself is also a practicing Quaker. The only requirements to join the SFC are that an individual be “of peace”, sign the Shire Society Declaration, and declare himself to be a member.

Edgington reiterated what he stated to the Board: “We want to separate voluntarily from the legal system.” Forming a Church and meeting the government’s stated legal requirements seems to be the best way to do that.

The Board’s decision is final. The SFC has the opportunity to contest the decision, and according to Edgington will do so.

3 Responses to "Shire Free Church Denied Tax Exemption"

  1. Pingback: Free Keene Costs Keene | STOP FREE KEENE

  2. Al Grayson   March 17, 2015 at 9:21 PM

    The Board of Assessors hs shifted the burden of proof from the state (city government) to the church. The Board is on soft legal footing here as the burden of proof is on the state, not the church, to prove that the church is not a church.
    It seems common for boards of tax assessment by whatever name to insist on the church to file an “application” for tax exemption. When an application is filed, the church admits that the board has authority to grant tax exemption to favored organizations and to withhold exemption from disfvored churches and other nonprofit/not-for-profit organizations. This is not the case under federal and state constitutions.
    Boards also seem to commonly demand that for a church to be granted the favor of tax exemption, they must register with the federal Treasury Dept. (IRS) as a 501(c)(3) public charity, private foundation, private operating foundation, trust, community chest, a certain kind of LLC, or unincorporated associations, and similar nonprofits. The overwhelming majority of 501(c)(3) organizations are nonprofit corporations. You will notice that CHURCHES, SYNAGOGUES, MOSQUES, TEMPLES and similar properties owned by “churches” (a general legal term for all religious groups) are not mentioned in 501(c)(3).
    If one will go on to 508(c)(1)(A), Congress has recognized the nontaxability of churches and similar religious societies by whatever name called:
    (a) New organizations must notify Secretary that they are applying for recognition of section 501(c)(3) status
    (b) Presumption that organizations are private foundations
    (c) Exceptions
    (1) Mandatory exceptions
    Subsections (a) and (b) shall not apply to—
    (A) churches, their integrated auxiliaries, and conventions or associations of churches….
    When a church applies for 501(c)(3) status, it/they abandon their immunity from state control and taxation. As far as the government is concerned, the term “church” is just a word in the corporate name of the organization if it applies for and is granted 501(c)(3) status. It is regarded as a corporation by Treasury whether it is formally incorporated by a state or not. It has a legal existence separate from the aggregate of its members.
    Churches are treated as if they were 501(c)(3) organizations except that they do not have to apply. 508(c)(1)(A) acknowedges that donations to churches are deductible when made by Title 26 taxpayers. Not being granted 501(c)(3) status by IRS/Treasury, IRS cannot revoke a church’s acknowledgement by Congress as exempt from federal regulation and taxation. The infamous LBJ restriction on political activity by tax-exemmpt organizations does not apply to “508(c)1)(A)” churches.
    Personally, I do not believe that Christian churches should try to influence legislation or elections to public offices unless proposed legislation directly affects the church. Others’ opinion is the opposite; that churches are morally obligated to pressure government for social and other change.
    “[Board member Mary Ann] Robator stated that political activism flies in the face of religion.”
    I do not know where she got this idea. Did she sleep through history classes? Religious societies, both as aggregates and as individual members, have been in the thick of political and social activism as far back as anyone knows. Almost every Founder and Framer of the USA was religious, either some variety of Christian, a Deist or other religious believer. Tom Paine is a rare exception of a sort: “I believe in one God, and no more; and I hope for happiness beyond this life.”
    The church leaders are free to teach that members should not pay taxes. no one has to pay taxes. At the same time, to resist the tax collectors by force (including wilfully concealing assets) is both illegal and foolish. Anyone who declines to pay a tax or taxes that they owe by law will probably end up paying, or having taken from them, not only the tax(es) but penalties and usury on top of it; court costs, etc., etc.
    Refusal to pay the $3500 school tax will result in the loss of whatever real estate they have. The way the state does things is that you have to pay the assessed tax, then appeal the assessment and sue to get the money back. The state has to get its funding. If the state turns out to be in the wrong, it can always go take the money from others to refund to the successful suitor.
    If the property is sold for back taxes, they will at least see how much the city has been overvaluing the property and overtaxing it (not counting that as church owned property it normally isn’t taxed anyway). I have seen property appraised at four times what it brought at a tax sale. That is outright fraud if the state won’t refund the excess taxes charged. The assessors should be punished as they know what they are doing.
    To compel by force payment of taxes is slavery, demanding that the individual serve the state. The federal Constitution and the constitutions of every state forbid slavery except as punishment for crime of which one has been legally convicted.
    Many people complain that any sort of group can qualify as a church, like the Church of Satan, the Beer Church, the Church of Elvis, and the like. But those aren’t churches as far as the state is concerned. They are 501(c)(3) nonprofit corporations or associations. If I was a wagering person I would bet that none of the weird “churches” are 508(c)(1)(A) religious societies.

    Reply
  3. Al Grayson   March 17, 2015 at 9:23 PM

    The “substance” of a church is its members. The “substance” of a nonprofit organization is its corporate charter (or similar legal instrument) and its bylaws.

    Reply

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