The Roman Catholic Archdiocese of San Francisco is trying to duck paying as much as $15 million in city taxes, according to documents filed by the city assessor's office.
Assessor-Recorder Phil Ting argues that the archdiocese, which governs a collection of churches, schools, parking lots, commercial buildings, and other real property in the city, shifted 232 parcels of land from two church-held corporations to another church corporation in April 2008, triggering real estate transfer taxes.
The legal issues are complicated, and church lawyer Philip Jelsma wouldn't return our calls, but the city officials say the deal amounts to this: The archdiocese is moving valuable property out of the hands of a corporation that might be liable for legal claims and into a separate entity that would be exempt from those claims.
And the church is taking two contradictory positions on the reorganizing. According to documents from the Assessor-Recorder's Office, when the archdiocese is discussing the protection of its assets from litigants, it claims that the legal entities in question are separate and distinct under civil law. However, when the city comes calling for much needed transfer tax dollars, church officials argue that the entities are merely interdenominational under the common banner of the Roman Catholic Church and that the transfers are considered "gifts" under canon law.
The issue comes before the Transfer Tax Board of Review on June 16. If the board, made up of the controller, the tax collector and the head of the Department of Real Estate, upholds Ting's position, the city will be able to collect between $3 million and $15 million, depending on the assessed value of the transferred parcels.
Major corporations in San Francisco have a long history of using bogus property transfers and shifts in corporate ownership to avoid paying property and transfer taxes. But this case is a bit more curious: why is the Roman Catholic Archdiocese, self-proclaimed champion of the poor, fighting tooth and nail to keep the city from collecting tax dollars that would help fund public welfare programs?
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