'The Path' and Taxes

Hulu's original series 'The Path' centers on a religious movement in upstate New York called Meyerism. The creators of the show were clearly influenced by Scientology. In the pilot we see a former member being harassed by church representatives. In the fourth episode we see characters using E-meters, devices that are used for auditing purposes in Scientology. Since yesterday was tax day, I thought it would be interesting to talk a little bit about some of the tax aspects of a group like the Meyerist Movement. Although the Meyerist Movement is a little cult-like, it is probably a 501 (c)(3) organization, just like Scientology. Let's take a look at what that means.

 episode 1: land

If you own your house, chances are you pay property taxes every year to the state. In the first episode we see Sarah driving onto the spacious, beautiful property of the Meyerist Movement. Most states exempt religious organizations from paying property taxes on buildings that are mostly used for providing religious services.

episode 2: donations

When I donated to a politician recently, I took note of the amount on an Excel spreadsheet, hoping that I would be able to deduct it from my taxes next year. I totally forgot that political contributions are not tax deductible. But donations to churches can be tax deductible. In the second episode we see John Ridge offer a one million dollar donation to the Meyerist Movement in exchange for the church's discretion about his troubled son. There are limits, but donations to a church can be a write-off.

episode 3: could they lose their tax-exempt status?

There are several ways that a church could lose its tax-exempt status. One way is to violate the specific rules regarding 501 (c)(3) organizations and political activity. Unrelated Business Income (UBI) can also jeopardize an organization's ability to claim tax-exempt status. Another way is for a church to participate in illegal activity. In the third episode of 'The Path' we see Miranda Frank locked in a room against her will. According to the IRS website*, "if an organization engages in illegal acts that are a substantial part of its activities, it does not qualify for exemption under IRC 501(c)(3)." Miranda is locked up because Cal, one of the leaders, wants her to "unburden." We later see Sarah yelling at Miranda and forcing her to remain in her cell until she "finishes the program." Although the Meyerist Movement typically tells "resisters" to go, Miranda was kept a prisoner until she had a medical emergency and was taken to the hospital. If an investigation found that the Meyerist Movement had a history of locking up people against their will, they could potentially lose their 501 (c)(3) status. 

Episode 5 of 'The Path' airs this Wednesday on Hulu.

*https://www.irs.gov/pub/irs-tege/eotopicj85.pdf