Joseph Ditzler
The Bulletin

SUNRIVER — From his sunny living room beneath a cathedral ceiling on Century Drive, Joshua Kenny-Greenwood says he ministers to thousands of online followers as head of The Empowerment Center.

He has a following, a message, and a goal: to place as many Christians in as many public offices as possible.

And he has a method. It’s a process for creating a church that, unlike most established churches in this country, can disregard the federal law that bars churches, as tax-exempt nonprofit organizations, from most direct political activity. The churches he helps create, however, can have as few as four members and can legally retain their tax-exempt status, he said.

Federal law on nonprofit organizations, 501(c)(3), stipulates those groups may not take part in political campaigns or attempt to influence legislation. To do so could mean the loss of their tax-exempt status. Kenny-Greenwood said he’s found a way around that prohibition that is perfectly legal.

He instructs his clients to submit an affidavit stating they are churches as defined by the Internal Revenue Service. Then, he registers his clients in Oregon as corporations sole, which he claims creates a separate financial overseer for the churches’ assets, even though the pastor and the overseer are one and the same. Then he counsels them to operate as tax-exempt churches under Section 508(c)(1)(a) of the U.S. Internal Revenue Code, which exempts them from, among other things, the prohibition against being active in political campaigns or influencing legislation, he said.

Tax experts say his interpretation of the tax code is mistaken. And government authorities say a pitch to register as a corporation sole is almost always a scam.

“Courts have repeatedly rejected similar arguments as frivolous, imposed penalties for making such arguments, and upheld criminal tax evasion convictions against those making or promoting the use of such arguments,” according to a 2013 Internal Revenue Service report on tax fraud, “The Truth About Frivolous Tax Arguments.”

Kenny-Greenwood explained that by registering as a corporation sole, anyone who fits the IRS definition of a religious organization — and his own standards of Christian leadership — can become recognized legally as a church. He asks for a $500 donation to register as corporations sole those he finds qualified to minister as pastors.

Corporation sole

Corporation sole is an obscure state statute originally employed by established denominations like the Roman Catholic, Eastern Orthodox and Episcopal churches.

The law allows a religious organization to appoint one person — a bishop, for example, or abbot of a monastery — as its sole financial officer in order to administer its assets. IRS and state authorities say that advertising to file or help someone file as a corporation sole to avoid taxes or other debts is a common scam.

The Oregon Secretary of State has about 200 of these organizations on file, 57 of them registered by Kenny-Greenwood. His registered corporations sole go by various names: Freedom Reigns Overseer and Successors, The DaVinci Society Overseer and Successors, The Kingdom of Yahweh Heaven on Earth Overseer and Successors. Most of them are located outside of Oregon, he said, although he acts as their registered agent.

“The IRS, on the Internet, they put all this negative publicity about corporation sole because, prior to us coming online and setting the record straight about corporation sole, people were really using it for unintended purposes,” Kenny-Greenwood said.

Registered as a tax-exempt corporation sole and claiming exemptions as a church under Section 508, pastors are armed to minister in a world turned upside down, he said. “If a church can lawfully be under 508 and not 501(c)(3), … where he can preach on Sunday morning, well, now you have a pastor that can influence legislation, he can tell his congregation members who to vote for or against … He can lobby Congress,” Kenny-Greenwood said. “He can do all the things that right now we wish that we can do.”

Kenny-Greenwood, 34, describes himself as a “pastor of pastors” who screens would-be pastors for their knowledge of scripture. None of the officials interviewed for this report were familiar with Kenny-Greenwood or his website. However, the government, both state and federal, takes a dim view of his methods.

“For a long time now, the Revenue Department and our office have been concerned about this form of business,” Oregon Secretary of State spokesman Tony Green wrote in an email Thursday. “Nevada and Utah have recently abolished this form of corporation for all future filings (the old ones were grandfathered in). We’ve considered doing the same, but it hasn’t risen to the priority level.”

The IRS in 2004 warned of scams based on fraudulent corporation sole filings. Promoters of the scheme establish “sham one-person, nonprofit religious corporations” on the pretext the individual is therefore exempt from federal income taxes. “Would-be participants purportedly are told that corporation sole laws provide a ‘legal’ way to escape paying federal income taxes, child support and other personal debts by hiding assets in a tax-exempt entity,” according to an IRS circular in March 2004.

Consequently, the IRS views any corporation sole registry with suspicion, said David Tucker, IRS spokesman in Oregon. However, because the agency has limited resources, corporation sole cases must involve significant loss or numbers of people before the IRS criminal division gets involved, said Special Agent Ryan Thompson.

Out of balance

Give Kenny-Greenwood a half-hour to explain his ministry and enthusiasm reddens his face, his voice climbs and his hands and arms whirl. Christians are silenced by government regulation, he said, even though their beliefs are those of the majority.

Political power in Oregon, for example, is skewed left due to the preponderance of Democrats in its large cities, he said; “most of the population in those centers are on unemployment, they’re on disability benefits, they’re on things that primarily would be indicative of a liberal Democratic view,” he said. Secular atheists with a pro-homosexual agenda are weakening churches by introducing measures to force them to perform gay marriages, for example, he said. Churches, prohibited from engaging in political activity, cannot fight back, he said.

By organizing churches across the country under Section 508 and corporation sole, Kenny-Greenwood aims to “restore this country back to its natural balance,” he said. “The message of the corporation sole has to be about church freedom. We want to reorganize every Christian church, but it’s a monumental task,” he said Wednesday. In 10 years, “I want Christians in churches to influence and be in power in every single category. I don’t want us to be afraid of the IRS, I want us to control the IRS.”

A pastor free to speak politically could do more on one Sunday morning to energize his followers to elect a candidate or defeat gay marriage than a political action committee could with $50 million in four years, Kenny-Greenwood said.

“Brother, it wouldn’t take a mathematician to figure out what would take place,” he said. “We would tip the scales in our favor (snaps his fingers) like that.”

Experts disagree

Experts in the field of tax law and charitable giving see obvious flaws in his argument. For one, Kenny-Greenwood’s interpretation of Section 508(c)(1)(a) is mistaken, said Susan Gary, a professor on nonprofit organizations, trusts and estates at the University of Oregon School of Law. The law excuses churches from the requirement that organizations notify the IRS they are seeking nonprofit status under Section 501(c)(3), nothing more, she said. Churches are automatically considered tax-exempt organizations and subject to 501(c)(3), even if they don’t notify the IRS, Gary said.

“There are a bunch of tax benefits that go along with that,” including the ability of donors to deduct their contributions from their individual income tax payments, she said. “The deal is, there are certain rules that apply if you go along with those benefits.”

The Oregon Department of Justice, when it encounters promoters of corporation sole registrations, refers them to the IRS, wrote department spokesman Michael Kron in an email. The promoters make money by charging for the package that explains their theory and by charging to file corporate documents with the Secretary of State for more money than the registration actually costs, Kron wrote.

“Oregon’s corporation sole statute is intended for use by actual churches, but abused by promoters or people who don’t want to pay taxes,” Kron wrote. “(In) addition to the corporations sole, we have seen promoters claim that one can set up an ordinary religious corporation, transfer all your assets into it, and never pay taxes again because the government cannot regulate churches or religious organizations.”

Individuals creatively interpreting laws like corporation sole are not a new phenomenon, even in Oregon, said investigator Doug Pearson of the Charitable Activities Section of the state Justice Department. They usually include scams designed to take advantage of people in financial straits, or who have anti-tax or anti-government beliefs.

“Oftentimes the people who fall for these schemes are not bad people, they’re not well-informed about the tax laws,” Pearson said Thursday.

Registering as a corporation sole does not protect assets, anyway. A bankruptcy trustee, for example, has little trouble unwinding that to get at assets on behalf of creditors, Pearson said. The proceeds from selling a house, for example, if it belongs to a nonprofit corporation, must benefit another nonprofit and not the individual, he said.

“People are sometimes quite shocked to learn that,” Pearson said.

— Reporter: 541-617-7815,