NEW YORK— Is the IRS investigating a whistleblower complaint about the Ensign Peak Advisors (EPA) fund that is connected to the Church of Jesus Christ and Latter-Day Saints? 

That was the question brewing after The Washington Post reported last week that a prominent former LDS Church member, James Huntsman, filed a federal lawsuit against the LDS Church (historically referred to as the “Mormon” church) seeking to regain more than $5 million in tithing he gave the church over 25 years. Huntsman, who owns the film distribution company Blue Fox Entertainment, is the son of the late billionaire Jon Huntsman Sr. and brother of former Utah governor and U.S. Presidential candidate Jon Huntsman Jr. 

“Rather than using tithing funds for the promised purposes, the LDS Corporation secretly lined its own pockets by using the funds to develop a multibillion-dollar commercial real estate and insurance empire that had nothing to do with charity,” alleges the suit filed in U.S District Court in California. “[T]his is not a case about faith,” the lawsuit states, “it is a case about fraud and corporate greed.

The Post noted the California-based Huntsman stopped paying tithes in 2017 and wanted his earlier tithes returned after reports first surfaced in ReligionUnplugged.com and The Washington Post in 2019 from a whistleblower’s complaint to the IRS that exposed a secretive investment firm hidden inside the LDS Church’s non-profit structure that amassed more than $100 billion in financial assets over 23 years using member’s tithes without their knowledge. 

“Mr. Huntsman seeks to recover his tithing funds that were fraudulently obtained by the LDS Corporation,” the lawsuit stated. It said Huntsman would donate the money to groups marginalized by LDS Church teaching such as LGBTQ, African-American and women’s rights groups. “Unlike the Corporation, Mr. Huntsman is confident that these charities will actually use his donations for their intended purposes.”

The whistleblower’s complaint in 2019 had noted that EPA, though registered as a non-profit, did not make any charitable distributions but, rather, bailed out an LDS Church-owned life insurance company called Beneficial Financial Group during the 2008 financial crisis and the City Creek Center retail development in downtown Salt Lake City. 

 “We cannot comment on whether or not an investigation is active into any persons or entities. I can tell you that whenever there is a whistleblower claim, it is the SOP of the IRS to review these claims, both from the civil examination and sometimes the criminal investigation side, to see if there is any validity to the claims made by the whistleblower.”

- An IRS spokesman in Utah

The whistleblower identified as David A. Nielsen had resigned from EPA in 2019 after his wife and children left the church. He prepared a 74-page complaint with his twin brother, Lars, to send to the IRS whistleblower program. Lars decided to release the document to ReligionUnplugged.com and The Washington Post later and to go public with the complaint. The reports led to greater awareness of the EPA fund among the general public, LDS Church members and financial regulators. The LDS Church began filing quarterly SEC reports after the reports surfaced.

LDS Church Response

LDS Church spokesman Eric Hawkins called the lawsuit by Huntsman “baseless” but acknowledged in the Post story that Huntsman had resigned from the LDS Church in 2020. The church’s newspaper, The Deseret News, reported that the 16.5 million-member church maintains reserve funds to be used in economic downturns to support global missionary work, more than 30,000 congregations, 200 temples and five universities. 

Sam Brunson, a tax law professor at Loyola University in Chicago and a member of the LDS Church, has advocated for more transparency by the church. He told The Salt Lake Tribune, however, that the lawsuit by Huntsman seems more like a 13-page publicity statement rather than a lawsuit with merit. Brunson called the lawsuit filing “procedurally and factually deficient.” 

The introduction of Huntsman’s lawsuit quotes LDS Church leader Brigham Young saying, “If we accept salvation on the terms it is offered to us, we have got to be honest in every thought, in our reflections, in our meditations, in our private circles, in our deals, in our declarations, and in every act of our lives.”

IRS Investigation?  

The last sentence of The Deseret News story caught the eye of many LDS Church members as well as former members. It said, “Hawkins said no when asked by The Washington Post if the church is in talks with the IRS.” And a clarification at the bottom of the article noted a previous version of the story had mischaracterized the church’s response to the Post about the IRS.  

Religion Unplugged reached out to an IRS spokesperson in Utah, who wrote back: 

“Unfortunately I am unable to confirm the existence of any ongoing investigation. We cannot comment on whether or not an investigation is active into any persons or entities. I can tell you that whenever there is a whistleblower claim, it is the SOP of the IRS to review these claims, both from the civil examination and sometimes the criminal investigation side, to see if there is any validity to the claims made by the whistleblower. There isn’t a lot more than that which I am able to provide at this time; I understand that is probably not very helpful, but we are very heavily restricted in the information we can comment about because of the serious disclosure laws surrounding the IRS.”

Lars Nielsen hasn’t spoken to his twin brother, David, since he went public with the whistleblower document. “I am both heartened and disheartened!” he told Religion Unplugged regarding the updated status report from the IRS. “I am heartened that the IRS treats whistleblowers’ identities and their cases with utmost discretion; I am disheartened that we all may have to wait a little longer for sunlight to attack this shadow.” 

Paul Glader is executive editor of ReligionUnplugged and a professor at The King’s College in NYC, where he chairs the program in Journalism, Culture and Society. He has worked for The Wall Street Journal, The Washington Post and the Associated Press and written for numerous other publications. He is on Twitter @PaulGlader

A Whistleblower in the Mormon Church

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