San Francisco accuses church of dodging taxes

[Kadie]

S.F. accuses church of dodging taxes
Marisa Lagos, Chronicle Staff Writer

Saturday, June 6, 2009

San Francisco's tax assessor believes the Archdiocese of San Francisco has moved the ownership of various assets to a new nonprofit organization in order to shield the properties from being seized or sold for potential lawsuit payouts.

Yet the church has refused to pay the taxes for transferring the 232 properties, Assessor-Recorder Phil Ting said. The tax bill, which the church has appealed, could reach $15 million - one of the largest in city history.

Both sides agree that the year-long battle, which will come to a head at a June 16 appeals hearing, isn't only about the millions of dollars at stake for the local Catholic Church and city coffers. It could also have wide-ranging implications for hundreds of other nonprofit groups.

Nonprofits are exempt from property and federal income taxes but subject to property transfer taxes, which are collected if they sell or transfer properties.

At issue is whether the church, in moving those San Francisco properties from one Catholic nonprofit organization to another, was transferring the assets to a separate entity, as the city argues, or simply undergoing internal reorganization, as the church contends.

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http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/06/MNJ0180DCU.DTL&tsp=1