Tuesday, April 7, 2009

The Tax Man Cometh…To the Church

Since it is tax time, I thought that I would write about a horrendous story that an attorney that I work with shared with me today. We represent an inner city apostolic church that Marion County has deemed fit to tax. Starting in 2003 Marion County repeatedly put the church on the tax sale list, alleging that the church owed property taxes. The church, of course, is organized as a non-profit and is not liable for taxes to begin with. Even so, that did not stop the county from placing the church on the list in 2003, 2004, and 2005. Fortunately for the church, it was able to go to the Marion Circuit court in 2003 and 2004 to obtain orders removing the church from the list.

When 2005 came along, the county of course attempted to sell the church again for taxes. This time, the county was successful. Shortly afterward, the church was able to get the tax sale set aside. Unfortunately for the church, it had taken out a large mortgage to protect its interests.

The circuit court later ordered the county to pay back the mortgage. Following that order, the County, for the first time in four years, appealed. At that point, the Court of Appeals reversed the circuit court, concluding that only the Indiana Tax Court could order a refund. Of course, the church technically was not seeking a refund. They were merely seeking an order from the court that it enforce three previous orders by placing it back in the same position as it was in 2003 and 2004. The Court of Appeals, in its infinite wisdom, concluded that the circuit court does not have jurisdiction to enforce its own previously issued, and un-appealed, orders.

We were very disappointed to learn early this week that the Indiana Supreme Court has decided not to review the Court of Appeals' decision. This has put the church in a position where it may have to close its doors. And the county has gotten away with taxing an organization which is clearly not subject to taxes.


Patriot Paul said...

Sounds like a variation of the Baptist Temple, though not about 'employees' compensation, but about property tax sale. How big is the Congregation and the building?

Paul K. Ogden said...

I'll check on the info you requested, PP. It wasn't my case.

It's primarily about bureaucratic incompetence. Even though the court ordered Marion County to stop putting the church on the property tax sale list because the church had an exemption, they continued to do it year after year.

Concerned Taxpayer said...

Is this a REAL church, or an extension of moveon.org?

Ghostwriter Judiciary said...

Concerned Taxpayer,

Just me, it is a real church. He is the link to the Court of Appeals decision: http://www.in.gov/judiciary/opinions/pdf/12240802nhv.pdf. It is one of the worst thought out decisions I've seen in years.

Ghostwriter Judiciary said...

Okay, for some reason that link did not post properly. The case is Marion County v. Revival Temple Apostolic Church et al. It is a published decision available on the Indiana judiciary website.

Unigov said...

I never agree with anybody, but I agree with the court.

Parcel 1075277, half a million bucks - the church should have known to file its exemption.

You can't go back in time and undo the taxes that are owed.

Ghostwriter Judiciary said...

The circuit court determined back in 2003 that they were compliant...the county never appealed that ruling. Instead they tried to relitigate the same issue year after year.