Originally published on Forbes.com on August 1st, 2012
Back in October, I told the story of Chief Apostle Bishop Corletta Vaughn of Go Tell It Ministry. She was in bankruptcy court trying to get out of personal responsibility for some of the ministry’s unpaid payroll taxes. She did not do so well:
Throughout her testimony, Ms. Vaughn contended that her primary responsibilities rested with the spiritual nature of the church and not the business matters of the church. The documentary evidence however, presents a different picture. The documentary evidence clearly shows Ms. Vaughn had control over the business matters of GTI. The documentary evidence shows she exercised authority over matters such as check-signing, loan procurement and hiring and firing.
The ministry just had its 2012 Holy Convocation
I missed it. What can I say ? I am a tax blogger not a religious reporter. I did not miss Apostle Vaughn’s reappearance in court though. She, or her attorneys anyway, were in the United States District Court for the Eastern District of North Carolina appealing the bankruptcy court decision on the payroll taxes. The appeal was based on the First Amendment establishment clause, which has become one of my favorite topics covering everything from basketball ministers to bishops worrying about Jesus being forced to hand out birth control pills to Scientology. My father, who was a wise man in many ways, cautioned me to not talk about religion and politics. He never got to be as old as I am now, though, so I’ve thrown caution to the wind now that I am playing with the house’s money. Besides, I pretty much just write about taxes.
Here is the basis of the appeal:
The instant appeal is limited to a specific question of law, whether the bankruptcy court violated Ms. Vaughn’s and GTI’s rights under the free exercise clause and the establishment clause of the First Amendment in its analysis of whether or not Ms. Vaughn was a responsible person within the meaning as set forth in 26 U.S.C. §6672(a). Appellants argue that the bankruptcy court’s decision effectively ordered GTI, a religious organization, to operate in a certain way.
Appellants argue that the bankruptcy court’s analysis of Ms. Vaughn’s role in GTI, specifically, the bankruptcy court’s analysis of the GTI bylaws, effectively “establishes a state regulated religion through judicial fiat.”
Appellants argue that by citing the GTI bylaws, the bankruptcy court is effectively ordering what the President, CEO and Chief Apostle of GTI must do. Even assuming that GTI was hierarchical, appellants do not show how mere citation of the bylaws in the bankruptcy court’s order is a challenge to the ecclesiastical decisions or religious customs of GTI in violation of the free exercise or free establishment clauses. In its most favorable light, appellants ask the court to make the logical leap to hold that the mere citation of the church bylaws as part of the responsible person analysis under 26 U.S.C. §6672 is prohibited by the First Amendment.
The bankruptcy court interpreted the bylaws as authorizing the Chief Apostle to have decision making authority and supervision over business matters. Appellants argue that this interpretation now forces the Chief Apostle of GTI to concern herself with secular affairs. Putting aside the fact that the plain language of the bylaws suggests that the Chief Apostle does concern herself with such affairs, the bankruptcy court did not base its decision on the bylaws alone. Contrarily, close examination of the bankruptcy court’s order reveals that it placed great emphasis on what Ms. Vaughn actually did as the Chief Apostle of GTI, including co-signing a $178,000.00 construction loan on behalf of GTI, disbursing and withholding payments to vendors and staff, signing a corporate resolution authorizing a bank account with First Federal Bank of Michigan which authorized Ms. Vaughn to sign checks on behalf of GTI, and hiring and firing employees.
So that was that. She is still personally liable for the payroll taxes not so much because the bankruptcy court read the bylaws to make her responsible for secular affairs as for her actual control of the secular affairs of the ministry. Churches with “strong pastor’ models of governance seem to be prey to these types of problems. This is actually mild compared to what happened with the Jinwrights or L Ron Hubbard for that matter.
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