Thanks in part to “reality” TV, the practice of polygamy may be starting on the path to being normalized.
Polygamy still has a way to go based on a recent IRS ruling (PLR 201310047). The ruling denied exempt status under 501(d) to an unnamed organization. The identity of recipients of private letter rulings is not disclosed and information that would help identify it is redacted. The disguise is pretty thin in the case of this ruling though. For now I will call it “The Group”.
501(d) -What Is That ?
Here is a summary description of 501(d) organizations from the IRS website:
In general, the type of organization exempt under IRC 501(d) is one organized for the purpose of operating a communal religious community where the members live a communal life following the tenets and teachings of the organization. All of the organization’s property is owned in community and, each member, upon leaving, the organization, is entitled to no part of the community assets. The activities often consist of farming and manufacturing. The income of the organization goes into a community treasury and is used to defray operating expenses and the cost of supporting and maintaining the members and their families.
The Group is pretty substantial, operating eighteen companies in a variety of industries. It appears to have many of the attributes of a 501(d) organization. All members belong to “Church Y”. They maintain a common treasury and under the bylaws members agree to report their share of The Group’s income.
So What Is The Problem ?
The problem is polygamy. The Group argued that their practice was not strictly speaking illegal under the laws of “State 1” where The Group operated.
These beliefs and practices include polygamy or plurality of wives. You stated that you “…have a religious belief known as ‘Celestial Marriage’ which includes a plurality of wives.” You describe “Celestial Marriage” as a private religious relationship between consenting parties of legal age which is not recognized as a marriage by state authorities. You said that you do not allow your members to seek multiple marriage certificates from state authorities, thus, you do not believe that your religious practice “constitutes bigamy or multiple ‘state recognized’ marriages as defined under applicable state law….”
The IRS is not buying it. It noted a news story in Examiner.com on “Date 3” that a leader of “Y” was found guilty of bigamy under the laws of “State 1”. They had asked “The Group” to comment on that, but they did not. Ultimately the IRS denied the exempt status because under its analysis of the penal code of “State 1”, “The Group” was, in fact, promoting an illegal activity.
What Is The Group ?
This was probably the worst job of redacting that I have even seen. I have not yet identified “The Group”, but that’s because I want to leave it as an exercise for my dedicated readers. Just to get your started note that Church Y is an offshoot of Church Z. Check out how many churches talk about “celestial marriage”. The penal code analysis makes it pretty clear that “State 1” is Texas. Here is a link to something that looks an awful lot like the news story referred to. Note, though, that the IRS did not say that the story was necessarily about somebody from “The Group”, just a fellow co-religionist in “Church Y”. One of my most constant commenters has already taken a stab at it informally. No prize for the winner of this contest. Just the glory.
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Originally published on Forbes.com Mar 12th, 2013