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Loophole allowed Romney to use an LDS church exemption to defer taxes for 15 years

Loophole allowed Romney to use an LDS church exemption to defer taxes for 15 years

A report from Bloomberg News has reveled a loophole used by Republican Presidential nominee Mitt Romney to effectively “rent” the Church of Jesus Christ, Latter Day Saints (LDS) (Mormon) to defer paying taxes for a period of fifteen years.

Through the Freedom of Information Act (FOIA), Bloomberg obtained information that showed Romney set up a charitable remainder unitrust (CRUT) a year prior to Congress addressing the loophole in 1997.

The Raw Story reports that Jesse Drucker, from Bloomberg news, stated,

“In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years. At the same time he is benefitting, the trust will probably leave the church with less than what current law requires.”

The report also includes statements from Jonathan Blattmachr, an Estates lawyer, which further explains the benefits of a CRUT, which includes a provision that allows charities to avoid paying capital gains taxes on profits from the same of assets.

Blattmachr further explained that the trust provides for an upfront charitable deduction and yearly cash payments. He compared it to an IRA, which allows tax-deferred financial growth, along with an annuity.

TRS reports that Blattmachr told Bloomberg,

“The main benefit from a charitable remainder trust is the renting from your favorite charity of its exemption from taxation."

The report reveals the dollar amount that was available to the church decreased from about $750,000 (2001) to roughly $421,000 by the end of last year. Throughout the decade, Romney collected yearly cash payments.

TRS reports that Bloomberg received a response from the Romney that stated it had operated within the law.

Romney is worth approximately a quarter of a billion dollars, and has used several methods as the CEO of Bain Capital CEO to avoid paying taxes.

About Al Stefanelli

Al is a retired author, writer and journalist. His books include "Free Thoughts - A Collection Of Essays By An American Atheist" and "A Voice Of Reason In An Unreasonable World - The Rise Of Atheism On Planet Earth." Al began writing in 1985, starting with the New York Times. In 1993 he joined a McClatchy newspaper, writing a weekly column for ten years. His writing continues to be widely distributed on the Internet and in print. He also produced and hosted a weekly syndicated radio broadcast from 1995 to 1998, and his work won a North Carolina Journalism award in 1998. Al is the former Georgia State Director for American Atheists, Inc., and served on the Board of Directors for "The Clergy Project." He is also a former Southern Baptist Pastor, having served two churches and as pulpit supply for three counties. Currently, he writes part time for The God Discussion, co-hosts the Internet radio programs, "The God Discussion Show" and "Reap Sow Radio." Al lives in the Atlanta suburb of Peachtree City, GA.
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  • phillipcsmith

    What Romney did was legal, something we all would do to preserve our money for other uses. For someone to find fault with something they would do as well for themselves is hypocritical and undeserving.

  • dr44
    • Deborah_B

      How is a news story that summarizes what the media is saying a smear? I don't see anything in the article to indicate a smear.

    • queequeg

      People who feel the burden of taxation sometimes find it easy to distrust someone who appears to be avoiding the same necessary financial responsibilities; particularly if the one held in doubt is wealthy; especially if he/she is a politician.

      Consequently, we are suspicious of those who seem to be hiding their fortunes inside charities. This is exacerbated when the charity is a religious organization; something that many have come to distrust. I suspect it's simply a matter of informing the public as to the charitable benefits the community presumably receives from the Mormon church.

  • It appears the sin of pride is blooming from the bottom up.
    A great man once said:
    "Pride is a sin that can readily be seen in others but is rarely admitted in ourselves. Most of us consider pride to be a sin of those on the top, such as the rich and the learned, looking down at the rest of us. (See 2Ne. 9:42.) There is however, a far more common ailment among us – and that is pride from the bottom looking up. It is manifest in so many ways, such as faultfinding, gossiping, backbiting, murmuring, living beyond our means, envying, coveting, withholding gratitude and praise that might lift another, and being unforgiving and jealous."

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