TWI lost its tax exempt status because of several factors including operating like a business and not a church and the support of political candidates.Interesting how TWI very vehemently argue that they are a "church."
Here's the court document of TWI's appeal to get their tax exempt statues back.Enjoy
THE WAY INTERNATIONAL, APPELLANT, v. LIMBACH, TAX COMMR., APPELLEE
No. 89-244
Supreme Court of Ohio
50 Ohio St. 3d 76; 552 N.E.2d 908; 1990 Ohio LEXIS 146
January 16, 1990, Submitted
April 11, 1990, Decided
PRIOR HISTORY: [***1]
APPEAL from the Board of Tax Appeals, No. 85-G-539.
n1 Exhibit 4 contains The Way's objectives and beliefs:
"I We believe the scriptures of the Old and New Testaments were verbally inspired by God and perfect in the original writing; that they are of supreme, absolute and final authority for faith, life and godliness.
"II We believe in one God, the creator of the heavens and earth; in Christ Jesus His son and our savior, whom God raised from the dead; and we believe in the working of the Holy Spirit.
"III We believe that the virgin Mary conceived by the Holy Spirit; that God was in Christ, and that Jesus Christ was true man.
"IV We believe that man was created in the image of God, spiritually, that he sinned and thereby brought upon himself immediate spiritual death, which is separation from God and also physical death which is the consequence of sin; and that all human beings are born with a sinful nature.
"V We believe that Jesus Christ died for our sins according to the Scriptures, as a representative and substitute for us; and that all who believe that God raised him from the dead are justified and made righteous, born again of the Spirit of God, receiving eternal life on the grounds of his eternal redemption; and thereby are sons of God.
"VI We believe in the resurrection of the crucified body of our Lord, his ascension into heaven and his seating at the right hand of God.
"VII We believe in the blessed hope of Christ's return, the personal return of our living Lord and Savior Jesus Christ and our gathering together onto him.
"VIII We believe in the bodily resurrection of the just and the unjust.
"IX We believe in the receiving of the fullness of the holy spirit, the power from on high, plus the corresponding nine manifestations of the holy spirit, for all born again believers.
"X We believe it is available to receive all that God promises us in His Word according to our believing faith. We believe we are free in Christ Jesus to receive all that he accomplished for us by his substitution.
"XI We believe the early Church flourished rapidly because they operated within a Root, Trunk, Limb, Branch and Twig setup (descent and in order)." [***2]
The Way analogizes its organization to a tree. It calls its followers "leaves." Leaves meet in a follower's home, and The Way calls this group a "twig." The Way names an area with many twigs a "branch" and calls all the branches in a state a "limb." The Way names the combined state organizations a "trunk," and all the national trunks are connected to the "root." The root is The Way International Headquarters in New Knoxville.
The basic membership unit, the twig, meets at a twig member's home. The host customarily plays music produced by The Way. The followers listen to a Bible teaching, a Bible research lesson, and more music. They sing a hymn, say some prayers, and collect an offering. Someone announces upcoming events. Usually, the members sing more hymns and then enjoy refreshments. Finally, the members discuss the Bible reading or how they saw the result of God's word in that day's experiences.
During the audit period, The Way also conducted Sunday evening services at its Bible Research Center in New Knoxville. n2 These services were similar to the twig meetings. Occasionally it taped these services for distribution to its followers.
n2 After the audit period, The Way began to hold its Sunday services in a newly constructed building, the Victor Paul Wierwille Word over the World Auditorium, most of which the commissioner exempted from real estate taxes in 1986. [***3]
Furthermore, The Way's founder, Dr. Victor Paul Wierwille, prior to his death in 1985, taped a series of classes, the "Power for Abundant Living," which virtually all followers hear or view. These classes teach the foundational basis of The Way. The Way requests a donation for a member's attendance.
The Way ordains ministers, and the ministers conduct weddings, funerals, and "baby dedications," serve holy communion, and pray for the sick. The Way selects a board of trustees, corporate officers, and a cabinet. According to Exhibit 23, The Way's ten highest paid employees received between $ 9,390 and $ 14,100 in 1975 and between $ 10,925 and $ 15,350 in 1976. It paid Dr. Victor Paul Wierwille, its founder and president, $ 5,200 as a trustee. The Way did not pay the remaining two trustees for their services as trustees.
The Way trains ministers in a four-year leadership program called the Way Corps. Way Corps students study advanced Bible reading, Bible research, teaching, and fellowship techniques, often at one of The Way's training sites. Students also learn Orientalisms (Eastern manners and customs), Greek and/or Aramaic, and techniques for coordinating Power for Abundant [***4] Living classes. During at least one of the four years, they relocate elsewhere for practical experience.
The Way also employs Word Over the World ("W.O.W.") ambassadors to spread The Way's message throughout the world. These ambassadors obtain a job in the community to which The Way assigns them and tell people what Jesus Christ has done for them. W.O.W. ambassadors undertake one-year assignments.
The Way, in addition, stages a "Rock of Ages" festival annually. The Way followers from all over the world gather at this festival for a week of Bible teaching and fellowship. The Way also operated a college and several camps during the audit period.
According to its financial statements, The Way experienced increases in revenues from donations, Power for Abundant Living classes, and book and tape sales during the audit period. Of particular interest to this case are the profits that The Way appears to have made from book and tape sales, even though it claims to have attempted to recover only its costs in these sales. In any event, The Way collected sales tax on book and tape sales.
On April 2, 1982, the Tax Commissioner, appellee, assessed use tax against The Way on most of its purchases [***5] made during the audit period, 1974 through 1976. In response to The Way's petition for reassessment, the commissioner issued a decision on June 3, 1985, in which she seemingly found that The Way was operating a business. Apparently, she conceded in her order that The Way was a church.
On appeal, the Board of Tax Appeals ("BTA") did not address whether The Way operated a business. Relying on its earlier decision in a real estate tax exemption case concerning The Way, the BTA found that The Way was not a church and that its purchases were not eligible for exemption. The BTA affirmed the bulk of the commissioner's order, but reversed certain portions of the order regarding specific claims, including agricultural purchase
COUNSEL:
Baker & Hostetler, Edward J. Bernert, George H. Boerger, Christopher Swift, Kaufman & Cumberland and James A. Scott, for appellant.
Anthony J. Celebrezze, Jr., attorney general, and David G. Lambert, for appellee.
JUDGES:
Moyer, C.J., Sweeney, Holmes, Douglas, Wright and H. Brown, JJ., concur. Resnick, J., concurs in judgment only.
OPINIONBY:
PER CURIAM
OPINION:
[*78] [**910] During the audit period, R.C. 5739.02(B)(12) n3 provided:
"(12) Sales of tangible personal property to churches and to organizations not for profit operated exclusively for charitable purposes in this state, no part of the net [**911] income of which inures to the benefit of any private shareholder or individual and no substantial part of the activities of which consists of carrying on propaganda or otherwise attempting to influence legislation.
"* * *
"Nothing in this division shall be deemed to exempt sales to any organization for use in the operation or carrying on of a trade or business." 135 Ohio Laws, Part II, 1252, 1254.
First, The Way argues that it is a church and that its purchases are entitled to exception. Second, it maintains that the "trade or business" restriction of R.C. 5739.02(B)(12) does not apply to it because the clause applies only to charitable organizations and not to churches. Alternatively, it contends that it does not operate a trade or business. The commissioner argues that The Way is not a church, referring to several features of its operation which, she maintains, distinguish it from a church. Alternatively, the commissioner asserts that The Way, [***7] in selling books and tapes, is a business and that sales to it are taxable. We hold that The Way is a church, that its purchases for use in operating or carrying on a trade or business are taxable, and that, as to the purchases under review, it did not operate or carry on a trade or business.
I
We observe that "[t]he really religious beliefs are always common to a determined group which makes profession of adhering to them and to practicing rites connected with them * * *. In all history, we do not find a single religion without a Church." Durkheim, The Elementary Forms of the Religious Life (C.A. 3, 1915) 43-44, quoted in Malnak v. Yogi (C.A. 3, 1979), 592 F.2d 197, 209, fn. 44 (Adams, J., concurring in judgment). The First Amendment to the United States Constitution grants individuals the right to believe in religion, but R.C. 5739.02(B))12) exempts a church from paying sales tax on its purchases. A church, thus, in general terms, is an assemblage of individuals who express their adherence to a religion.
In Maumee Valley Broadcasting Assn. v. Porterfield (1972), 29 Ohio St. 2d 95, 58 O.O. 2d 192, 279 N.E. 2d 863, we exempted the purchases of a non-profit religious [***8] corporation that had the essential attributes of a church, despite its operating a radio facility. We mentioned several facts about the association's operations that indicated that the association had the essential attributes of a church. The association "* * * conduct[ed] religious activities both on its premises and by use of its broadcasting facilities. It render[ed] basic religious services and programs to the general public. It serve[d] missions, engage[d] in child evangelism work, establishe[d] Bible clubs, serve[d] shut-in listeners, gather[ed] food and clothing for distribution through authorized agencies, cooperate[d] in various ways with recognized charitable and health organizations, provide[d] counselling services, and promote[d] educational programs for various bible and religious schools." Id. at 95-96, 58 O.O. 2d at 192, 279 N.E. 2d at 864.
The association, moreover, was interdenominational and allowed the community to use its facilities for church services and related programs. Its full-time staff, including two ordained ministers, provided pastoral care, engaged in gospel preaching, conducted worship services, and participated generally in other routine [*80] [***9] church activities. It had been granted tax-exempt status by the Internal Revenue Service and a real property tax exemption by the BTA. The association's lack of a profit motive also impressed us.
We eschewed dictionary definitions of "church" and, instead, cited the association's character as support for our holding that it was a church. We believed that this character "must be found in * * * [the association's] motives, its charter, its purposes, its methods, and its operation. * * *" Id. at 98, 58 O.O. 2d at 193, 279 N.E. 2d at 865. We felt that the association had demonstrated that it exhibited the necessary attributes of a church and that the additional operation of a radio station, [**912] which implemented its religious objectives, did not change its underlying foundation.
Under the Maumee Valley Broadcasting Assn. criteria, The Way qualifies as a church. It has adherents. It adopts the Bible as the main source of its dogma, it propagates a comprehensive set of religious objectives and beliefs which attempt to answer its adherents' religious concerns, and it conducts services, both at its Bible Research Center and at twig meetings. It employs ministers who preside at [***10] sacramental ceremonies, operates schools to train ministers, and sends forth missionaries to spread its beliefs. Its character, found in its "motives, its charter, its purposes, its methods, and its operation[,]" is that of a church. It is, thus, eligible for the exemption.
II
We will not explore the statutory analysis advanced by The Way to support its argument that a "church" is not included within the phrase "any organization" as used in R.C. 5739.02(B)(12). That statute imposes a tax on sales to any organization for use in a trade or business. As the commissioner argues, the term "any organization" is inclusive. A church is an organization, and this provision applies.
Finally, as to whether The Way's sale of books and tapes is a business, thus rendering purchases for this operation taxable, we quote the definition of "business" contained in R.C. 5739.01(F):
"'Business' includes any activity engaged in by any person with the object of gain, benefit, or advantage, either direct or indirect."
In Akron Golf Charities, Inc. v. Limbach (1987), 34 Ohio St. 3d 11, 516 N.E. 2d 222, we held that an organization which operated golf tournaments, the proceeds from which it distributed [***11] to local charities, was not a business for the purposes of the sales or use tax. We cited Maumee Valley Broadcasting Assn. v. Porterfield, supra, and required the earlier mentioned review of the organization's motives, charter, purposes, methods, and operation. Id. at 13-14, 516 N.E. 2d at 225. In Akron Golf Charities, we regarded the golf tournament as a means to a charitable end. Similarly, the operation of a radio station in Maumee Valley Broadcasting Assn. was a means to a charitable end. We emphasized that the corporation or its officers had no profit motive and that they did not operate the corporation for material gain. Akron Golf Charities, supra, at 14, 516 N.E. 2d at 225.
Here, we hold that The Way advances its religion by selling these disputed materials. Despite receiving more for these items than it paid for them, The Way did not distribute any profit to its trustees, officers, or employees but, instead, paid them modest salaries. The Way accumulated these profits and expanded its operations, [*81] including building a new church facility. Moreover, The Way's prime source of funding came from voluntary contributions. The Way's motive [***12] is to advance its religion, and it employs the books and tapes in a functionally related way to accomplish this. Selling books and tapes to its followers is not a business but is a means to its religious ends.
Accordingly, we reverse the decision of the BTA and remand this cause for a decision consistent with this opinion.
quote:Of particular interest to this case are the profits that The Way appears to have made from book and tape sales, even though it claims to have attempted to recover only its costs in these sales.
quote:The Way's motive [***12] is to advance its religion, and it employs the books and tapes in a functionally related way to accomplish this. Selling books and tapes to its followers is not a business but is a means to its religious ends.
OM - I agree that it seems to be a fair and reasonable conclusion.
Except something that I saw with my own eyes one time convinces me otherwise.
I saw Howard Allen chiding a bookstore person, and his last comment to her was "Got to sell these books, got to support our ministry!". It was all about profit$.
To me, Howard Allen's statement only reinforces the idea that the sales were to advance the religion, or ministry coffers, etc. Yes, it's about profit, but for the purpose of moving the religion.
On the other hand, if he wrote a book and selling it in the bookstore and all the profit went in his own pocket, that would probably be an example of having a profit motive other than for the advancement of the religion.
Being "just" a TC at that time, I didn't have any information about why TWI lost its tax-exempt status. I do remember, however, rejoicing when the decision was reversed, because I could file an amended tax form and claim a deduction for those years! :D-->
I vaguely recall local leadership accusing LCM of "selling out," because he had released to the IRS some info that VPW had refused to release. I had to go with Craig on this one! :D--> :D-->
Yeah, I've probably started fewer than five threads in all my time on Waydale/Greasespot. Guess I don't have an original thought in my head! ;)--> One'a these days, I'll post my story, and that will be such a rant that I'll get NO responses, lol!
Dear pj,
Thanks for the documentation. For how long was TWI without tax-exempt status?
I also see something interesting that they admitted to in that document. Right after saying how little they paid their employees, they say, "It paid Dr. Victor Paul Wierwille, its founder and president, $ 5,200 as a trustee." Wow, my understanding is that a member of the board of directors is not allowed to be paid ANYTHING for being a member of the board. (He can be paid for services rendered to the organization, but not for sitting on the board.) Maybe someone should be jumping on THAT, since it is documented by TWI.
Dear Lightside,
Yes, I'd like to hear if anyone knows if TWI got nailed on the Hayes Gahagan thing. For those who may not know, Hayes was a PFAL grad (did he go any higher than that? I don't know) who was state senator in Maine. Perhaps you can fill in more of the details -- did he run for federal office?
Another big problem I have with TWI as an organization is the large amount of money that seems to be carried over from year to year. My understanding is that the money is supposed to be put back into the organization. Does anyone know what percentage of donations are allowed to be carried over?
Finally, I have a BIG problem with the lavish lifestyle of the BOD. It is just like being paid for being a board member. I think a good case could be made that the methods used for housing the BOD (the "Corps Chalet," the Wierwille home), transporting them (private plane, motor coach), and personal services (maid service, special meals, etc.) far exceeded what was necessary to provide the needed services to the followers, and essentially constituted payment to the BOD. (For example, other employees did not receive the same benefits.) Many of the same benefits are enjoyed by the BOD and a chosen few to this day.
quote:The Way's motive [***12] is to advance its religion, and it employs the books and tapes in a functionally related way to accomplish this. Selling books and tapes to its followers is not a business but is a means to its religious ends.
Seems like a fair and reasonable conclusion ...
:)-->
Seems that way until you compare them with an
outfit that really DOES treat book sales as a "break-even"
proposition and charge the approximate cost of the books,
like the "Jehovah's Witnesses"/Watchtower Society.
I think the difference is that Oldies takes everything TWI says at face value and actually believes them, whereas, most of us are trained on the fine art of reading between the lines and recognizing which 99% of what comes out of their mouths is a lie. ;)-->
It is easy to find out if you go to tthe www.IRS.GOV and do a search on the site you will find that The way international did make case law for the irs and it did involve loosing there federal status due to several things including the political campaign involvement.
Sunesis, on another thread, mentions cutting checks for BOD members who requested money for personal shopping. That alone should have been enough to get them in trouble with the IRS right there. If anybody reported it.
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ChasUFarley
Oooohhhh... I'd forgotten about that....
Does anyone know how much they paid in taxes and if they re-cooped any of it?
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Steve!
Shazzy! You started a thread! Congratulations!
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JustThinking
I had heard 2nd hand that it was due to their active support for a political candidate.
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WordWolf
The official story (what lcm said on the tapes) was that it involved loans to twi
members where twi did not charge interest. In sounded so pious.
The story I've seen at the GSC since involved local politics in the state of Ohio
and the support of a candidate.
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pjroberge
TWI lost its tax exempt status because of several factors including operating like a business and not a church and the support of political candidates.Interesting how TWI very vehemently argue that they are a "church."
Here's the court document of TWI's appeal to get their tax exempt statues back.Enjoy
THE WAY INTERNATIONAL, APPELLANT, v. LIMBACH, TAX COMMR., APPELLEE
No. 89-244
Supreme Court of Ohio
50 Ohio St. 3d 76; 552 N.E.2d 908; 1990 Ohio LEXIS 146
January 16, 1990, Submitted
April 11, 1990, Decided
PRIOR HISTORY: [***1]
APPEAL from the Board of Tax Appeals, No. 85-G-539.
DISPOSITION:
Decision reversed and cause remanded.
LexisNexis® Headnotes
SYLLABUS:
The Way International ("The Way"), appellant, which has headquarters in New Knoxville, Ohio, centers its religious mission on the Bible. It patterns its organization after the early church of the first century, the members of which met in followers' homes. n1 The Way communicates its beliefs principally through its classes and the books and tapes which it sells to its followers. Apparently, the Internal Revenue Service has exempted it under Section 501©(3), Title 26, U.S. Code.
n1 Exhibit 4 contains The Way's objectives and beliefs:
"I We believe the scriptures of the Old and New Testaments were verbally inspired by God and perfect in the original writing; that they are of supreme, absolute and final authority for faith, life and godliness.
"II We believe in one God, the creator of the heavens and earth; in Christ Jesus His son and our savior, whom God raised from the dead; and we believe in the working of the Holy Spirit.
"III We believe that the virgin Mary conceived by the Holy Spirit; that God was in Christ, and that Jesus Christ was true man.
"IV We believe that man was created in the image of God, spiritually, that he sinned and thereby brought upon himself immediate spiritual death, which is separation from God and also physical death which is the consequence of sin; and that all human beings are born with a sinful nature.
"V We believe that Jesus Christ died for our sins according to the Scriptures, as a representative and substitute for us; and that all who believe that God raised him from the dead are justified and made righteous, born again of the Spirit of God, receiving eternal life on the grounds of his eternal redemption; and thereby are sons of God.
"VI We believe in the resurrection of the crucified body of our Lord, his ascension into heaven and his seating at the right hand of God.
"VII We believe in the blessed hope of Christ's return, the personal return of our living Lord and Savior Jesus Christ and our gathering together onto him.
"VIII We believe in the bodily resurrection of the just and the unjust.
"IX We believe in the receiving of the fullness of the holy spirit, the power from on high, plus the corresponding nine manifestations of the holy spirit, for all born again believers.
"X We believe it is available to receive all that God promises us in His Word according to our believing faith. We believe we are free in Christ Jesus to receive all that he accomplished for us by his substitution.
"XI We believe the early Church flourished rapidly because they operated within a Root, Trunk, Limb, Branch and Twig setup (descent and in order)." [***2]
The Way analogizes its organization to a tree. It calls its followers "leaves." Leaves meet in a follower's home, and The Way calls this group a "twig." The Way names an area with many twigs a "branch" and calls all the branches in a state a "limb." The Way names the combined state organizations a "trunk," and all the national trunks are connected to the "root." The root is The Way International Headquarters in New Knoxville.
The basic membership unit, the twig, meets at a twig member's home. The host customarily plays music produced by The Way. The followers listen to a Bible teaching, a Bible research lesson, and more music. They sing a hymn, say some prayers, and collect an offering. Someone announces upcoming events. Usually, the members sing more hymns and then enjoy refreshments. Finally, the members discuss the Bible reading or how they saw the result of God's word in that day's experiences.
During the audit period, The Way also conducted Sunday evening services at its Bible Research Center in New Knoxville. n2 These services were similar to the twig meetings. Occasionally it taped these services for distribution to its followers.
n2 After the audit period, The Way began to hold its Sunday services in a newly constructed building, the Victor Paul Wierwille Word over the World Auditorium, most of which the commissioner exempted from real estate taxes in 1986. [***3]
Furthermore, The Way's founder, Dr. Victor Paul Wierwille, prior to his death in 1985, taped a series of classes, the "Power for Abundant Living," which virtually all followers hear or view. These classes teach the foundational basis of The Way. The Way requests a donation for a member's attendance.
The Way ordains ministers, and the ministers conduct weddings, funerals, and "baby dedications," serve holy communion, and pray for the sick. The Way selects a board of trustees, corporate officers, and a cabinet. According to Exhibit 23, The Way's ten highest paid employees received between $ 9,390 and $ 14,100 in 1975 and between $ 10,925 and $ 15,350 in 1976. It paid Dr. Victor Paul Wierwille, its founder and president, $ 5,200 as a trustee. The Way did not pay the remaining two trustees for their services as trustees.
The Way trains ministers in a four-year leadership program called the Way Corps. Way Corps students study advanced Bible reading, Bible research, teaching, and fellowship techniques, often at one of The Way's training sites. Students also learn Orientalisms (Eastern manners and customs), Greek and/or Aramaic, and techniques for coordinating Power for Abundant [***4] Living classes. During at least one of the four years, they relocate elsewhere for practical experience.
The Way also employs Word Over the World ("W.O.W.") ambassadors to spread The Way's message throughout the world. These ambassadors obtain a job in the community to which The Way assigns them and tell people what Jesus Christ has done for them. W.O.W. ambassadors undertake one-year assignments.
The Way, in addition, stages a "Rock of Ages" festival annually. The Way followers from all over the world gather at this festival for a week of Bible teaching and fellowship. The Way also operated a college and several camps during the audit period.
According to its financial statements, The Way experienced increases in revenues from donations, Power for Abundant Living classes, and book and tape sales during the audit period. Of particular interest to this case are the profits that The Way appears to have made from book and tape sales, even though it claims to have attempted to recover only its costs in these sales. In any event, The Way collected sales tax on book and tape sales.
On April 2, 1982, the Tax Commissioner, appellee, assessed use tax against The Way on most of its purchases [***5] made during the audit period, 1974 through 1976. In response to The Way's petition for reassessment, the commissioner issued a decision on June 3, 1985, in which she seemingly found that The Way was operating a business. Apparently, she conceded in her order that The Way was a church.
On appeal, the Board of Tax Appeals ("BTA") did not address whether The Way operated a business. Relying on its earlier decision in a real estate tax exemption case concerning The Way, the BTA found that The Way was not a church and that its purchases were not eligible for exemption. The BTA affirmed the bulk of the commissioner's order, but reversed certain portions of the order regarding specific claims, including agricultural purchase
COUNSEL:
Baker & Hostetler, Edward J. Bernert, George H. Boerger, Christopher Swift, Kaufman & Cumberland and James A. Scott, for appellant.
Anthony J. Celebrezze, Jr., attorney general, and David G. Lambert, for appellee.
JUDGES:
Moyer, C.J., Sweeney, Holmes, Douglas, Wright and H. Brown, JJ., concur. Resnick, J., concurs in judgment only.
OPINIONBY:
PER CURIAM
OPINION:
[*78] [**910] During the audit period, R.C. 5739.02(B)(12) n3 provided:
n3 The commissioner issued a use tax assessment. However, R.C. 5741.02©(2) renders sales tax exemptions applicable to the use tax.
[***6]
"The [sales] tax does not apply to the following:
[*79] "* * *
"(12) Sales of tangible personal property to churches and to organizations not for profit operated exclusively for charitable purposes in this state, no part of the net [**911] income of which inures to the benefit of any private shareholder or individual and no substantial part of the activities of which consists of carrying on propaganda or otherwise attempting to influence legislation.
"* * *
"Nothing in this division shall be deemed to exempt sales to any organization for use in the operation or carrying on of a trade or business." 135 Ohio Laws, Part II, 1252, 1254.
First, The Way argues that it is a church and that its purchases are entitled to exception. Second, it maintains that the "trade or business" restriction of R.C. 5739.02(B)(12) does not apply to it because the clause applies only to charitable organizations and not to churches. Alternatively, it contends that it does not operate a trade or business. The commissioner argues that The Way is not a church, referring to several features of its operation which, she maintains, distinguish it from a church. Alternatively, the commissioner asserts that The Way, [***7] in selling books and tapes, is a business and that sales to it are taxable. We hold that The Way is a church, that its purchases for use in operating or carrying on a trade or business are taxable, and that, as to the purchases under review, it did not operate or carry on a trade or business.
I
We observe that "[t]he really religious beliefs are always common to a determined group which makes profession of adhering to them and to practicing rites connected with them * * *. In all history, we do not find a single religion without a Church." Durkheim, The Elementary Forms of the Religious Life (C.A. 3, 1915) 43-44, quoted in Malnak v. Yogi (C.A. 3, 1979), 592 F.2d 197, 209, fn. 44 (Adams, J., concurring in judgment). The First Amendment to the United States Constitution grants individuals the right to believe in religion, but R.C. 5739.02(B))12) exempts a church from paying sales tax on its purchases. A church, thus, in general terms, is an assemblage of individuals who express their adherence to a religion.
In Maumee Valley Broadcasting Assn. v. Porterfield (1972), 29 Ohio St. 2d 95, 58 O.O. 2d 192, 279 N.E. 2d 863, we exempted the purchases of a non-profit religious [***8] corporation that had the essential attributes of a church, despite its operating a radio facility. We mentioned several facts about the association's operations that indicated that the association had the essential attributes of a church. The association "* * * conduct[ed] religious activities both on its premises and by use of its broadcasting facilities. It render[ed] basic religious services and programs to the general public. It serve[d] missions, engage[d] in child evangelism work, establishe[d] Bible clubs, serve[d] shut-in listeners, gather[ed] food and clothing for distribution through authorized agencies, cooperate[d] in various ways with recognized charitable and health organizations, provide[d] counselling services, and promote[d] educational programs for various bible and religious schools." Id. at 95-96, 58 O.O. 2d at 192, 279 N.E. 2d at 864.
The association, moreover, was interdenominational and allowed the community to use its facilities for church services and related programs. Its full-time staff, including two ordained ministers, provided pastoral care, engaged in gospel preaching, conducted worship services, and participated generally in other routine [*80] [***9] church activities. It had been granted tax-exempt status by the Internal Revenue Service and a real property tax exemption by the BTA. The association's lack of a profit motive also impressed us.
We eschewed dictionary definitions of "church" and, instead, cited the association's character as support for our holding that it was a church. We believed that this character "must be found in * * * [the association's] motives, its charter, its purposes, its methods, and its operation. * * *" Id. at 98, 58 O.O. 2d at 193, 279 N.E. 2d at 865. We felt that the association had demonstrated that it exhibited the necessary attributes of a church and that the additional operation of a radio station, [**912] which implemented its religious objectives, did not change its underlying foundation.
Under the Maumee Valley Broadcasting Assn. criteria, The Way qualifies as a church. It has adherents. It adopts the Bible as the main source of its dogma, it propagates a comprehensive set of religious objectives and beliefs which attempt to answer its adherents' religious concerns, and it conducts services, both at its Bible Research Center and at twig meetings. It employs ministers who preside at [***10] sacramental ceremonies, operates schools to train ministers, and sends forth missionaries to spread its beliefs. Its character, found in its "motives, its charter, its purposes, its methods, and its operation[,]" is that of a church. It is, thus, eligible for the exemption.
II
We will not explore the statutory analysis advanced by The Way to support its argument that a "church" is not included within the phrase "any organization" as used in R.C. 5739.02(B)(12). That statute imposes a tax on sales to any organization for use in a trade or business. As the commissioner argues, the term "any organization" is inclusive. A church is an organization, and this provision applies.
Finally, as to whether The Way's sale of books and tapes is a business, thus rendering purchases for this operation taxable, we quote the definition of "business" contained in R.C. 5739.01(F):
"'Business' includes any activity engaged in by any person with the object of gain, benefit, or advantage, either direct or indirect."
In Akron Golf Charities, Inc. v. Limbach (1987), 34 Ohio St. 3d 11, 516 N.E. 2d 222, we held that an organization which operated golf tournaments, the proceeds from which it distributed [***11] to local charities, was not a business for the purposes of the sales or use tax. We cited Maumee Valley Broadcasting Assn. v. Porterfield, supra, and required the earlier mentioned review of the organization's motives, charter, purposes, methods, and operation. Id. at 13-14, 516 N.E. 2d at 225. In Akron Golf Charities, we regarded the golf tournament as a means to a charitable end. Similarly, the operation of a radio station in Maumee Valley Broadcasting Assn. was a means to a charitable end. We emphasized that the corporation or its officers had no profit motive and that they did not operate the corporation for material gain. Akron Golf Charities, supra, at 14, 516 N.E. 2d at 225.
Here, we hold that The Way advances its religion by selling these disputed materials. Despite receiving more for these items than it paid for them, The Way did not distribute any profit to its trustees, officers, or employees but, instead, paid them modest salaries. The Way accumulated these profits and expanded its operations, [*81] including building a new church facility. Moreover, The Way's prime source of funding came from voluntary contributions. The Way's motive [***12] is to advance its religion, and it employs the books and tapes in a functionally related way to accomplish this. Selling books and tapes to its followers is not a business but is a means to its religious ends.
Accordingly, we reverse the decision of the BTA and remand this cause for a decision consistent with this opinion.
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Belle
Thanks, Pat.
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Ham
I think they would have had their lawyers arguing that TWI was the Devil if that is what it would have taken..
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pjroberge
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oldiesman
Seems like a fair and reasonable conclusion ...
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Steve!
OM - I agree that it seems to be a fair and reasonable conclusion.
Except something that I saw with my own eyes one time convinces me otherwise.
I saw Howard Allen chiding a bookstore person, and his last comment to her was "Got to sell these books, got to support our ministry!". It was all about profit$.
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oldiesman
To me, Howard Allen's statement only reinforces the idea that the sales were to advance the religion, or ministry coffers, etc. Yes, it's about profit, but for the purpose of moving the religion.
On the other hand, if he wrote a book and selling it in the bookstore and all the profit went in his own pocket, that would probably be an example of having a profit motive other than for the advancement of the religion.
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GeorgeStGeorge
Being "just" a TC at that time, I didn't have any information about why TWI lost its tax-exempt status. I do remember, however, rejoicing when the decision was reversed, because I could file an amended tax form and claim a deduction for those years!
:D-->
I vaguely recall local leadership accusing LCM of "selling out," because he had released to the IRS some info that VPW had refused to release. I had to go with Craig on this one!
:D--> 
:D-->
George
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Lightside
Wasn't the State of Ohio case the SECOND lawsuit againt TWI?
If I understand correctly, the IRS took a good look at TWI, prior to Ohio eagle-eye investigation.
Was the earlier investigation over the funding of political campaigns in Maine (1978) and than in Ohio?
If we get into the Hayes Gahagan folly in the mid to late 70's, have I got a story to share with ya.
In the 70's, TWI was pullin de strings, and in my opinion, right out in the open.
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JustThinking
Lightside,
Tell on, tell on.
JT
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shazdancer
Dear Steve!,
Yeah, I've probably started fewer than five threads in all my time on Waydale/Greasespot. Guess I don't have an original thought in my head!
;)--> One'a these days, I'll post my story, and that will be such a rant that I'll get NO responses, lol!
Dear pj,
Thanks for the documentation. For how long was TWI without tax-exempt status?
I also see something interesting that they admitted to in that document. Right after saying how little they paid their employees, they say, "It paid Dr. Victor Paul Wierwille, its founder and president, $ 5,200 as a trustee." Wow, my understanding is that a member of the board of directors is not allowed to be paid ANYTHING for being a member of the board. (He can be paid for services rendered to the organization, but not for sitting on the board.) Maybe someone should be jumping on THAT, since it is documented by TWI.
Dear Lightside,
Yes, I'd like to hear if anyone knows if TWI got nailed on the Hayes Gahagan thing. For those who may not know, Hayes was a PFAL grad (did he go any higher than that? I don't know) who was state senator in Maine. Perhaps you can fill in more of the details -- did he run for federal office?
I remember Wierwille speaking from the stage in endorsement of his campaign. Oopsie, that's a blatant violation of the 501©(3) federal laws governing not-for-profit organizations. The organization cannot endorse a political candidate, and certainly can't contribute organization monies or services to one.
Another big problem I have with TWI as an organization is the large amount of money that seems to be carried over from year to year. My understanding is that the money is supposed to be put back into the organization. Does anyone know what percentage of donations are allowed to be carried over?
Finally, I have a BIG problem with the lavish lifestyle of the BOD. It is just like being paid for being a board member. I think a good case could be made that the methods used for housing the BOD (the "Corps Chalet," the Wierwille home), transporting them (private plane, motor coach), and personal services (maid service, special meals, etc.) far exceeded what was necessary to provide the needed services to the followers, and essentially constituted payment to the BOD. (For example, other employees did not receive the same benefits.) Many of the same benefits are enjoyed by the BOD and a chosen few to this day.
Hey, IRS,
Shaz
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Jim
Wasn't there another big and stinky issue about corps sponsorship? Seems like contributers thought it was deductable and the IRS decided it wasn't.
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WordWolf
Seems that way until you compare them with an
outfit that really DOES treat book sales as a "break-even"
proposition and charge the approximate cost of the books,
like the "Jehovah's Witnesses"/Watchtower Society.
Compared side-by-side, the difference is evident.
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Belle
I think the difference is that Oldies takes everything TWI says at face value and actually believes them, whereas, most of us are trained on the fine art of reading between the lines and recognizing which 99% of what comes out of their mouths is a lie.
;)-->
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jim martin/ jimextwi
It is easy to find out if you go to tthe www.IRS.GOV and do a search on the site you will find that The way international did make case law for the irs and it did involve loosing there federal status due to several things including the political campaign involvement.
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Oakspear
Gahagan ran for federal office...U.S. Senator from Maine
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shazdancer
Thanks, Oak.
Sunesis, on another thread, mentions cutting checks for BOD members who requested money for personal shopping. That alone should have been enough to get them in trouble with the IRS right there. If anybody reported it.
I wonder if that practice still goes on....
WayGB, what can you tell us?
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