Evangelist's almost $40,000 in deductions disallowed as personal expenses, not charitable gifts

Lakewood-Church-Houston-Texas-worship_ToBeDaniel via Wikipedia Commons
Thousands gather for a service at Lakewood Church in Houston, one of many megachurches often led by prosperity gospel evangelists. As since biblical days, religious leaders and governments continue to jockey over rendering unto the tax collector. (Photo by ToBeDaniel via Wikipedia Commons)

Religion and taxes are inextricably tied together, primarily because religious groups that pass Internal Revenue Service muster don't have to pay taxes.

But some religious leaders have gotten extra attention lately for, shall we say, the extravagant ways they seek to serve their god.

Private jet is biblical: Televangelist Kenneth Copeland, who in 2015 defended his use of a luxury private jet by saying "you can't talk to God while flying commercial," was back in the news last month when rationalized his aviation choices.

This time the focus was on the Gulfstream V jet that Copeland purchased from entertainment impresario Tyler Perry in January 2018. Copeland once again asserted the necessity of a private plane to do his and the Lord's work worldwide.

"If I flew commercial, I'd have to stop 65 percent of what I'm doing, that’s the main reason," Copeland said in the story reported by The Washington Post.

Right now, Copeland has only been subject to public eye-rolling for his prosperity gospel expenditures. Full disclosure, I'm one of those who views Copeland's efforts skeptically.

I'm sure Copeland and his supporters don't give a flip about my take on this beliefs or how he spreads them.

Another free-spending self-proclaimed evangelist, however, faced a tougher crowd and lost. Big time.

An evangelist walks into Tax Court: Robert A. Oliveri, a self-described devout Catholic, spent almost $40,000 in 2012 traveling across the country conducting evangelical activities. The money went toward meals and gifts to strangers and acquaintances to further his religious outreach.

But when he tried to deduct those expenses from his federal income taxes, the IRS said now.

Last week, a Tax Court judge agreed with the tax agency, ruling that Oliveri's expenses didn't count as tax deductible charitable contributions and denied almost all those deductions.

Oliveri previously had complied with some federal tax requirements.

After serving more than a quarter century in the U.S. Air Force, Oliveri turned his focus to the Catholic Church. He became a dedicated evangelist and co-founded a small religious group that by 2012 had grown to include 14 members and was granted federal 501(c)(3) tax exempt status.

Personal expenses related to religious work: On that tax year's return, Oliveri claimed myriad expenses totaling $39,979 as charitable contributions.

They included private airplane rentals, all the miles he drove in both his cars, every restaurant meal he ate that year and miscellaneous gifts, including some given to members of his religious group.

Oliveri argued that the charitable deductions were part of his ministry and evangelizing. In the court's findings of fact section, it states:

Quotation-marks-quote"[Oliveri] seeks to spread the teachings of the Catholic Church through random interactions with members of the general public. He considers all of his contact with members of the public to be opportunities for evangelism. He wears a large and visible crucifix at all times which identifies his religious affiliation and commitment to evangelism. [Oliveri] evangelizes people he happens to see when he engages in otherwise personal activities, such as when he eats in restaurants, travels, and pilots private planes. He usually does not know in advance whom he will evangelize. [Oliveri] evangelizes and discusses his faith with friends, members of his extended family, and members of the religious organization that he founded, … and the Catholic Church."

Such continual proselytizing in all aspects of his daily life, argued Oliveri, justified the deductibility of the gifts.

Judge thinks otherwise: Tax Court Judge John O. Colvin disagreed for the most part in his May 28 decision.

"Not all religious activities are services 'to or for the use of' a religious organization for purposes of section 170," wrote Colvin. Just so you don't have to search, section 170 of U.S. Code Title 26, aka the Internal Revenue Code, covers "Charitable, etc., contributions and gifts."

"Petitioner [Oliveri] cites no authority for this sweeping proposition," Colvin added. "At a minimum, we can easily conclude that there is no exception to section 170(f)(8)(A) for self-created organizations."

Final tax bill: The bottom line of Colvin's decision?

Most of Oliveri's expenses, determined Colvin, "were incurred in whole or in part for personal purposes and therefore do not qualify for deduction under section 170."

Only Oliveri's $224 paid for repairs to a church in Annapolis, Maryland, where he lives, was allowed to stand.

That means that the evangelist now faces the $16,548 tax bill the IRS says he owes for 2012, as well as $2,010 for failure to timely file a return.

The judge did cut Oliveri a break by finding he was not liable for an additional $5,011 accuracy related penalty the IRS had hoped to collect.

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