Bubbling Well Church of Universal Love, Inc. v. Commissioner of Internal Revenue

Bubbling Well Church of Universal Love (the Church) appeals the Tax Court’s denial, 74 T.C. 531 , of its application for tax exempt status under I.R.C. § 501(c)(3). Because the Church failed to show that no part of its net income inured to the benefit of private individuals, we affirm.

The Harberts’ family are the sole employees and sole voting directors of the Church. In 1977, the $61,543 1977 Church budget included a $13,648 parsonage allowance, a $19,468 minister’s living allowance, and $3,924 in other expenses paid to or for the Harberts. These payments were authorized by the three Harberts acting as the Board of Directors. The record showed few employee services received by the Church in exchange for the payments. The Church held Christmas and Easter services, and John Harberts made an unspecified number of ministerial visits, and performed one marriage and several burials. There was a statement that all three Harberts devoted 100% of their time to church activities, although Catherine and Dan Harberts’ duties were not specified. The Church refused to itemize expenses of $17,000 for maintenance and supplies. Travel expenses of $2,529.26 were included covering a trip to…