Doc Dino Dollars - CSE Form 990 Now Available

The Creation Science Evangelism Ministries Inc. Form 990 is finally up on guidestar.  Bob Baty put out the word on Facebook.  Form 990 "Return of  Organization Exempt From Tax" is an informational return.  It is filed with the IRS, but it is a public document.  It is essentially a financial statement with a good amount of supplemental information.  The period covered is calendar year 2016.

Form 990 is due four and half months after the end of the year covered with a six month extension being allowed.  That makes the due date November 15, which is when the return was filed.  It takes a while to get it up on guidestar, so this is about when you would expect it to be available.

The preparer is listed as Brian R Finch CPA of Geneva, AL.  For whatever it is worth the Alabama State Board of Public Accountancy shows a Brian Ross Finch holding Certificate Numbe 9331 issued on February 3, 2003.  I was thinking of giving him a call, but it is tax season and I'm busy and he is probably busier.

Some Numbers

Big picture CSE took in $680,103 in contributions and grants.  There were a total of $224,055 in expenses.  The biggest category was computer expense which when combined with "information technology" came to over $42,000.  Next up was over $28,000 in "food for vendors", which struck me as an interesting way of putting it.

$466.798 went into land, building and equipment, which is capitalized rather than expensed leaving only $342 of cash at the end of the year.

The Board

The board consists of President Ernest Land, Secretary Diane Hommel (The famous Lady Di), Treasurer Cody Land, Director Gill Sardi, Direcotr J R Hughes and Pastor Kent Hovind.  There is probably a slip-up in the return, as it shows Ernie working 20 hours per week and the others all at zero. Schedule O disclosure tells us that Cody is Ernie's son.  According to a note at the end of the return the board was emailed the 990 on November 14 and it was filed the next day.

Some Nits to Pick

Given the number of typos that worm their way into my writing I should not go grammar Nazi, but the mission statement\significant activities hits on one of my biggest bugaboos

To educate society on bible creation, and biblical principals.  This purpose was to help generate a better society by teaching these principals.  The teaching includes scientific support of the bible teaching.  (Emphasis added)

I'm pretty sure they mean "principles".

On Page 10 the expenses are supposed to be divided into three categories - Program service - Management and general - Fundraising.  The put everything under program service, which I understand is generally frowned upon.

Schedule A is pretty interesting.  It is where you say why you are not a private foundation.  They chose "church".  Now as it happens, if they do qualify for church status filing Form 990 is optional so you could say they are being extra transparent.  On the other hand, if they had checked Box 7 rather than Box 1, they would have had to give more detail about the contributions, basically indicating how much of the contributions were large donations.

Schedule O at the very end is how we know that Cody is Ernie's son and that the board had little time to review the Form 990.  It also tells us that Ernie owns 100% of the common stock.  I am not used to not for profits have stockholders, but maybe things are different down in Alabama/

The other matter of interest on Schedule O is that Governing documents are available by request to the board of directors.  I don't know if an enterprising Hovindologist will test that.  If you do let me know how it goes.

Not A Bad Job Overall

If you have never dealt with Form 990 before, trust me when I tell you that the nits that I just picked are pretty common.  I don't see anything in here that is inconsistent with Kent Hovind's messaging.

Well, it's nearing one of the high points of tax season, so I am moving on.

Update

Dee Holmes noted that travel expenses were over $60,000 which I somehow missed.  She is a little suspicious about that.  Whether it is high or not depends on how many people travel with Kent. 
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Peter J Reilly has been following the Kent Hovind story for a long time and has not made any money doing so, much as he would be pleased if he did.

NFL Not The Only Organization That Does Not Need Or Deserve Tax Exempt Status

Originally published on forbes.com on September 15, 2014.

Interest in the NFL's tax exemption seems to be spiking again.  Fred Barbash of the Washington Post did a piece titled -  Why Congress will never take back the NFL's tax break  this morning.  I wrote about the controversy back in February when the Properly Reducing Overexemptions For Sports Act was introduced. I am probably one of the few people in the world who finds Internal Revenue Code Section 501 much more interesting than football.   My skewed perspective probably accounts for why I have poorly communicated my concern about this controversy.  My concern is that in the context of tax policy, the NFL exemption is trivial.

Has NFL Turned The Corner?

Since I last looked at this issue, another NFL Form 990 has been released - this one for the year ended March 31, 2013.  For that year the National Football League actually showed a profit  - $8,996,039.  The owner members must have been ecstatic as Roger Goodell's salary went to $44,107,000 as opposed to a mere $29,419,000  that he made in the prior year when the League lost over $77,000,000.

So if the NFL had not been an exempt organization would it have had to pay somewhat over $3,000,000 in corporate income tax for its year ended 3/31/13?  Probably not.  In the previous three years, the NFL had posted losses of $77,628,857, $52,195,047 and $42,277,760.  That would be nearly enough in net operating loss carryovers to cover the NFL for the next twenty years at that profit level, although the earlier losses might expire before that.

(It is important to keep in mind in this discussion, that I am only writing about the National Football League organization that is exempt from taxation under 501(c)(6) of the Internal Revenue Code.  The 32 member teams is where the real money is.  They are not exempt organizations, so their financial information is not public)

Shouldn't We Pull Its Exemption Anyway - Just Well Because?

Actually I agree that the NFL should not be an exempt organization.  I just think that there should be a different approach to eliminating its exemption.  I would do it by repealing Code Section 501(c)(6).  That section exempts trade organizations.  Trade organizations are not themselves trying to make money, but their members are trying to make money for themselves.  Trade organizations do not get tax deductible charitable deductions, but the dues they collect will probably be deducted by members as ordinary and necessary business expenses.  I don't see what the policy rationale is for allowing organizations like that to accumulate tax free profits.  If they operate at about a breakeven, which is probably what the dues paying members would prefer, they don't need exempt status. If they are profitable they don't deserve exempt status.

Among the organizations that would lose exempt status under this proposal would be the American Bar Association, which showed profits in the $10,000,000 range in each of  the last two available years and the American Institute of Certified Public Accountants, which on net went $10,000,000 backwards over two years. Not to make you crazy but the American Psychiatric Association netted just under $5,000,000 between 2011 and 2012.

I don't know what the tax policy reason for treating those groups differently than the owners of football teams would be.  If the entities want to avoid tax, they can rebate some of the dues.  I wouldn't mind at all if the AICPA did that.  Just saying.

The Bigger Picture

Congress might use this flap about the NFL and even more significantly the interminable Tea Party/Dark Money/IRS Targeting scandal (You get to pick the name based on your point of view) as a goad to look more closely at the whole exempt organization area.  There are 29 different types of exempt organizations under 501(c) alone.  Many entities put a burden on overstretched IRS resources to claim exempt status for no discernible federal tax reason.  It let's their dark money stay dark.  It allows them to get a liquor license, sponsor bingo games and avoid state sales and use tax.  Silliest of all is that 501(c) status can give an organization credibility in some circles - another illustration of Barnum's law.

So overall, my goal in stating in my previous post on this subject that concern over the NFL's exemption is silly is to move the discussion to a broader look at the rationale for exempting any trade organizations and beyond that to an overhaul of the whole exempt organization area.