SALT LAKE CITY — A new TV commercial will air in Utah over the next week produced by a long-time critic of the LDS Church who wants to build a case against the church's tax-exempt status.
Fred Karger, who fought against Proposition 8 in California and filed a complaint against The Church of Jesus Christ of Latter-day Saints there in 2008, has spent $30,000 producing the commercial, setting up a website and hiring lawyers and investigators for what he called "the biggest, loudest, most comprehensive challenge to a church's tax-exempt status in history."
The Internal Revenue Service has never revoked a church's tax-exempt status, and another man running a website that leaks Mormon documents called Karger's effort "a pipe dream."
MormonLeaks founder Ryan McKnight, who on Monday released four sets of documents about church operations, including purported information about the living allowances of LDS General Authorities, said he has had one conversation with Karger by phone.
The two men share a desire to force the LDS Church to maintain their definition of transparency, but McKnight was critical of Karger's campaign.
"I disagree with him," McKnight said. "I have seen with my own eyes evidence that the church goes out of its way to follow IRS regulations. Does that mean no one has ever made a mistake? No, of course not. But the idea that the church institutionally is engaging in illegal IRS contributions I think is wishful thinking, a pipe dream.
"I would run away from that bet if it were proposed to me."
Karger's ad buy for the 30-second commercial is $2,000. The spot will run 60 times on cable TV in the St. George, Provo, Salt Lake, Ogden and Logan markets beginning Wednesday, Karger said, and running for seven days on stations like CNN and Fox News and during shows like "The Simpsons," "Law & Order" and a basketball game between the University of Utah and UCLA.
The commercial features Karger and former Mormons asking people to help it document the church's business holdings and political activities.
"Please help us collect any evidence of Mormon church tax fraud," Karger said in the spot, "and we will then file a complaint against them with the IRS."
At a press conference at the Hilton Salt Lake City Center on Tuesday, Karger said he will take a year or two to compile information, then turn it over to the IRS office in Ogden, Utah.
Karger, 66, is the founder of Rights Equal Rights, which he launched as Californians Against Hate during Prop 8.
The LDS Church is tax exempt in the United States as a 501(c)(3) religious organization under U.S. law. The 501(c)(3) designation refers to a section of Internal Revenue Service code that exempts a nonprofit organization from paying federal income tax if its activities are charitable, religious or educational.
Karger continued on Tuesday to claim incorrectly that the church did not report approximately $200,000 it provided in cash and in-kind contributions to the Proposition 8 campaign in California in 2008. The in-kind contributions included video production at church studios, church employee time and airfare and lodging costs for church leaders traveling to California for campaign efforts.
In fact, the church did declare contributions it made to the ProtectMarriage Coalition. However, in the final two weeks before the election, the church overlooked the daily reporting requirement. It reported those final contributions in a later filing.
Karger filed a complaint with California's Fair Political Practices Commission, which conducted an 18-month investigation. The FPPC concluded that the church failed to file daily reports detailing $36,928 of in-kind contributions, including the cost of staff time spent by church employees to help the "Yes on 8" committee.
The FPPC could have fined the church up to $5,000 for each of the 13 instances of missed daily reports, but the commission instead used a streamlined enforcement process — likened by some to a "traffic-ticket program" — and fined the church 15 percent of the value of each late-reported contribution, a total of $5,539.
The commission said the church's contributions were reported on a post-election, semi-annual campaign statement that was filed on time.
In the LDS Church's April 1991 General Conference, late-President Gordon B. Hinckley said: "All such commercial properties are taxed under the government entities where they are located. Not only do they pay property taxes, but also income taxes on any profits. So it is with all of the commercial operations of the Church."