[Editor’s notes: This report was transcribed by Heather Shannon. The editors are grateful to her for her invaluable assistance.
[This document retains its original spellings throughout, with corrections made only when the meaning may otherwise be unclear. In addition, where known, we have added first or last names in brackets to those identified by a single name. It should be noted that a number of names have not been annotated. The name is either unknown, there may be more than one person with that name or – most often the case – the name is in code.]
B-4 b (1)
LAW OFFICE REPORT #26
April 20, 1978
page 1
from June [Crym]
RE: TAXES
Attached with this report are xeroxes of all of the tax returns which have been mailed in after your rough drafts were received in the mail last week.
Some of the people on Evelyn’s mother’s listwhich had been chosen to itemize 50% had already done their own, including me, because it was my understanding until I received the packet in the mail that communals were to do their own, and do it on the short form.
Well, we caught what we could, and have some questions about others:
1. We noticed you itemized the maximum 50%/ [“donation” typed in above line] on several, but on their matching State returns there was no itemization. I think there were only about 4or 5 State returns thathad itemized church donations, and then it wasnt the maximum20% for the State limit. You did itemize 20% on Mike Klingman’s, but we have to redo it because you’ve shown him as head of household while we believe Ellen had April in 1977 with her and was collecting afdc for her. And this year the State Franchise Tax Board sent Ellen [underline handwritten] a questionnaire to fill out explaining why she [underline handwritten] claimed head of household in 1976.
2. Some of the problems I had Bonnie [Beck] look at the Saturday before the 17th, and she noticed that the sales tax deduction on the State and IRS returns did not match any figures in the tables provided in the directions in the tax books. The rule is that if you use the standards figures in the tax instruction tables, then you dont have to worry about providing receipts. However, Bonnie says she cannot figure out where the sales tax deduction figures came from; cannot find them in the tax pamphlets nor in the Master Tax Guide.
a. We had to redo Jerry Wilson because you had him head of household and claiming his 3 kids; those kids havent been with him for over a year and the welfare and d.a. chased him for awhile before we took over in Sept. 1977 when he lived apostolically, and we started paying regular child support payments for him.
b. Claire [Janaro] filed an extension of time forone month on the County [text xx’d out] business property statement as the sample that we have from last year which Evelyn’s mother filed showed cars and items on the depreciation schedule which neither Claire nor Bonnie could traee [track? trace?] down as existing ever at the ranch. Bonnie will [text xx’d out] figure out what as best she can a form and send it down for your review and return. We have 1 month extension applied for; Bonnie called the County Tax Office and confirmed that they do grant such extensions before Claire went ahead and mailed it in.
B-4 b (2)
LAW OFFICE REPORT #26
April 20, 1978
Page 2
from June
3. The tax package on Truth Enterprises was sent over this week with Georgia; I understand tonight that the brief case is found and [text xx’d out] this envelope should be in it; Betty prepared it with blank tax forms and xeroxes of recap sheets of expenditures andincome, etc.
If anything further is neded let me know.
4. Franchise Tax Board Notice of Revocation and Forfeiture of Privileges. sent to P.T. last week:
Martha has probably also already written this one up, so this may be redundant. The Notice was sent supposedly because we had never filed the Forms 199B for the years 1974, 1975 and 1976, information returns. Ed left instructions that these were to be done when he went overseas, but no one here knew how to do it because we didnt know whatpercentages to put in regarding donations, properties, etc. We had taken the forms to Buddy and he was going to file them, and he was aware of the deadline. But he didnt mention them again, and we failed to pick up on them also, and so the time passed and hedid not file them. When we took the Revocation and Forfeiture notice into him, he fell back on the excuse that we had never given him figures to fill in the forms. Well, he should have had it calendared, but of course that does not excuse us from the responsibility of reminding him and being on top of the situation enough to fill out the forms before the deadline. The night we took the Notice in, we filled out the information returns in his office, comparing the previous years before 1974 to arrive at some percentages. Attached are copies ofthe informational returns. Buddy mailed them in with the attached letter, assuming ell would work out. But we wanted to be sure and had Tom Adams take the forms personally to Sacramento, including a letter reserving the corporate name of Peoples Temple (which Dr. South had recommended was absolutelynecessary, whereas Buddy had not even mentioned it). Sacramento would not accept the reserve letter and didnt give Tom any kind of receipt [text scribbled out]. Later we had him take in duplicates to the San Francisco office of the Franchise Tax Board, and after several days of checking with them, during which time the Sacramento office informed us that we had submitted the forms after the regular computer time so that we would not be registered in the records as being back in action tilnext month. We finally hassled this one out with the SF office, who called the Sacto office and after much checking backand forth, we got a letter officialy lifting the forfeiture and revocation of privileges, and a certification from the Secretary of State reinstating our name. My impression from all of this is that Buddy is lackadasical, and talks big but doesnt produce.
B-4 b (3)
Law Office Report #26
April 20, 1978
page 3
from June
5. Peoples Temple audit letters from IRS: The first letter came and we took it to Buddy,
His recommendationthen was not to comply, that the [text crossed out] questions asked were groundless, that he suspected they were questions based on suspicion of unrelated business income but that the only quetions IRS could ask at the district level could only deal with whether we were functioning as a church, and thus the questions re profit and income and financial statements didnt have to beanaswered.
It was our impression that after the first delay letter he was to write, asking for an extension of time, thich he did; that the next letter would be a general protest based on the grounds that the questions in the letter didnt have any right being asked.
However, he said today that after he had talked with his IRS contact, [handwriting: “I’ll send out”??] the district office can ask such questions with the intent of determining whether we are operating as a church, that it is not necessarily a question of unrelated business income, and that the best thing to do would be to reply to the letter and not protest it. He went ahead and wrote this letter, and did not confer with us about it nor did he show it to us before it went out in the mail. He gave a copy to Clancy after it had been already been mailed.
When we questioned this today, he explained that he had been mistaken before but after conferring with his IRS Friend, he concluded that the bst thing would be not to provoke the national regional director by not complying with the district director, and rather comply with the district director and possibly head off an audit by the regional director. However, this is in direct opposition to Dr. South’s recommendations, who has always recommended that we not comply. He also said that he wants affidavits of substantiating material, such as Martha’s conversation with Irvin so that he can back up any claims against the IRS of outside harassment with evidence. This was one of this “talking big” periods; he tends to talk alot about it but do the reverse. He is also disturbingly absentminded about our case as he never remembers specifics on things like Truth Enterprises, Valley Enterprises; we always have to go through background exblanations about the printing, etc. as if he never heard it before.
After he replied to the first audit letter on April 10, sending it to the DistrictDirector office because the first letter had never been marked with identifying symbols or name of writer; he got another audit letter (we got it, addressed to us, despite the fact that he’s written to the IRS several months ago enclosing a power of attorney and asking that mail be directed
to him). The second audit letter is identical to the first, except the first cites grounds as IRS Code Section 7605(c), a copy of which we sent to you already; the second letter does not mention this Code. Buddy now plans to call the writer of the second leter, explain that he did send the first letter, to make it clear that we did respond, as he things they are trying to set a pattern of nonresponse, at which time the [text xx’d out] wholematter would go to the national regional level and an automatic audit.
B-4 b(4)
Law Office Report #26
Mar April 20, 1978
page 4
from June
6. Following is a transcript of conversation with Dr. South on 4/3 and Mertha re unrelated business income; this may be old news but I have never written it up before, and Martha may have already sent a summary toyou: We asked, if we ad gone ahead and filed unrelated business income returns on the 3 operations Ed was concerned about, would they audit us.
He replied “sure, we don’t know what the source of the letter (the original IRS audit letter)
is now. I dont think that if you would have filed unrelated business income, that it would have changed things. It’s either a normal audit of a charitable organization to verify that they are a charitable organization that doesn’t have unrelated business taxable income or it’s for some other purpose.” [text xx’d out] “If there was a determination that you owed some amount of tax, they culd levy on your assets, but you would have an opportunity to pay. Only levy the amount that they determined that we owed. They can record a lien if you fail to pay, and by recording the lien, would preclude you from selling property. On all property until you cleared the tax bill.
Re the Hargis case, tax exemption revoked retroactively: “I don’t think it has any bearing on us [unreadable] this point; you’re jumping the gun. First they have to make the determination that you’re not a tax exempt organization. Then after that we go through the courts. Once they determine that you’re not a church, then your income is subject to tax, retroactive. They can only go back 3 years.
7 . See Law Office Report #22, page 4, item 9: re church exemption 1978, 1859 Geary property, S.F. In that item I explained that I sent over a request for instructions in January, and attached a copy of the request. I am attaching a copy of that request again. The reason for this is that I have discovered that I made a mistake and I dont know that it’s a retrievable one at this point—I said in the request that last year [Eugene] Chaikin filled in the tax form saying that a caretaker and a secretary stayed in 2 small rooms when working overnight. The directions came back, fill it out same as last year, and mail it in. I took it in personally and got a lot of flak from the tax assessor’s clerk, who was worried about the statement re someone living in the building. Later Martha and I were at Buddy’s office, and he had our tax exemption file on P.T.; looking through it I found the 1977 Property Tax Exemption application which had been [text xx’d out] submitted last year by Chaikin; it said NO ONE lived in the building. The form that I quoted from whe I sent over the request for instructions was the 1976 application, not the 1977. So, although the application was taken in personally and then mailed certified return receipt requested, we dont know if we will pass the test, because I filled it out wrong on the back. Have heard nothing further since it was mailed in. Better check with Chaikin on this one.
[Handwriting on duplicate B-4 b (62): “file Amended ??? form, ??. EE”]
B-4 b (5)
LAW OFFICE REPORT #26
April 20, 1978
page 5
from June
8. Another tax problem: For the past 2 years or more certain people were on attendant care for disabled seniors, including Tenna [Teena] Turner, Juanita Bogue, Judy Merriam, Andy Silver. Tish [Leroy] and Ed conferred onthe problem of quarterly tax returns for these people, which is required by the State tax; however, no one ever reached a final decision other than not to do anything. Kris K. [likely Kice] wrote it up several times, sent it over, never got an answer. Now I have Judy Merriam’s records given to me by her; Andy was running around trying to find out from Kris and Jinny [Jenny] Cheek how to file his taxes as attendant care til I stopped him and said wait. Kris has said that it is a loophole situation, where 11 you dont report, they dont know about you. However, looking at Judy’s papers, I wonder. See attached copies, One of the rationales for stalling was that gradually all of the attendants left. But we do have Andy and we do have Judy, who still takes care of Jewel [Runnels] and Viola [Godshalk], How do we resolve this problem? [Handwriting on duplicate B-4 b (63): “don’t know, maybe we should just wait and see if they catch us. E”]
9. Attached is copy of Bonnie’s write-up re problems she had with RWV people taxes, and re the property business tax exemption application form. The original is in the envelope with the
tax returns.
I AM SENDING OVER A COPY OF THIS [text xx’d out] REPORT FOR TISH, A COPY FOR
JULIA, A COPY FOR MILDRED [Terri Buford] = 3
B-4 b (6): Certificate of Relief from Suspension of Forfeiture from the CA Franchise Tax Board
B-4 b (7): Certification that Peoples Temple of the Disciples of Christ is authorized to conduct business in CA
B-4 b (8): no page
B-4 b (9): Letter from Jean F. Brown requesting Peoples Temple name be reserved until it can be revived
B-4 b (9) [page number duplicated]: Letter from Marshall Bentzman to Franchise Tax Board regarding relief from suspension [Handwriting: “hand delivered”]
B-4 b (10): Check to the Franchise Tax Board for reviver fee
B-4 b (11-13): Exempt Organization Annual Information Statement for Peoples Temple
B-4 b (14): Notice of Suspension or Forfeiture from Franchise Tax Board
B-4 b (15): Status Questionnaire and Application for Relief from Suspension or Forfeiture
B-4 b (16-17): IRS letter requesting more information
B-4 b (18): Letter from attorney Marshall R. Bentzman to the IRS regarding request for documents
B-4 b (19-20): Letter from the IRS regarding 501(c)(3) status of Peoples Temple
B-4 b (21): Notice of action from Department of Social Welfare regarding Eddie Runnels and Judy Merriam
B-4 b (22): Notice of Action from Department of Social Welfare regarding Viola Godshalk
B-4 b (23): Undated Letter to Betty [no last name] from Judith Merriam regarding care of May [Mae] Griffith
Judith Merriam
Betty–
I took care of May [Mae] Griffith for almost a year and got paid for that time from the government. Please check with Chris Kice about how much I was paid each month, and for that period of time for income tax. I also took care of Jewel Runnels for a full year & got paid for a full year’s wages. Thank you.
B-4 b (24): Undated memo to Betty from Judith Merriam regarding checks for Mae Griffith, Jewel Runnels & Viola Godshalk
My checks came from City & County of San Francisco. Got paid for taking care of these people.
Betty – Income tax form & information – I didn’t pay into any income tax this past year.
Check with Chris Kice about Mae Griffith’s & Eddie (Jewel) Runnels’ records, that she has of the checks I received for them in 1977. Also Viola Godshalk’s. I received these checks for Mae Griffith, Viola & Jewel
[listing not transcribed]
I think I first started getting paid for Violsa in Oct. 1977.
I received a raise of approximately $20.00 after a month starting in May 1977, for Jewel and also Mae Griffith
Judith Merriam
B-4 b (25): Letter to Jean Brown regarding filing of tax forms to qualify for exemption from property tax
Jean Brown
This is a tax form we file with the City of San Francisco annually to qualify for exemption from City property tax as a religious organization using the premises solely and exclusively for religious worship on the premises.
We file these forms every year, with usually about the same answers. The main question to wonder about is that they ask if anyone resides in the building. We are not zoned for living in the building.
Last year, chaikin wrote in response to this,
“yes, caretaker and secretary, 2 small rooms only when working overnight.”
the year before, cartmell put “yes, 2 people reside in the building.”
And on the original one, tim stoen put for 1972/73, “commencing 2/1/73 4 rooms were used for living quarters for 5 persons, all being assistant pastors, custodian and clerks.”
They inspected the church in October 1975.
I would suggest we hold this til March 1978, as it is not due til March 31. By that time there may be very few people left living in the building.
I would also suggest we send a copy overseas and get their advice.
This is the kind of form Chaikin would delay on as long as possible, at least til March, to put off any possible inspection until absolutely necessary.
June
1/7/78(There is also the possibility that the City might anticipate denying our exemption, considering our political activity… Another reason to delay for now though my guess is they would not and would leave it to the IRS to do the dirty work.
[Handwriting in margin: “sent this over”]
B-4 b (26): 1978 Claim for Exemption from Property Taxes
B-4 b (27): Questionnaire for Church Exemption
B-4 b (28): Letter to accounting staff regarding taxes and other matters
TO: Accounting staff
FROM:
RE: Taxes, reports and so forth – answers and advice needed ASAP
1. Janaro business property report form for the County. Instructions were that there were no changes in the way it was to be done, etc., other than taking off equipment that we no longer have, etc. So questions on the attached schedule from last year (gotten at the Assessor’s office). From talking with Claire and Rob who were both on the ranch, we cannot figure out what vehicles the following are (other than they are not at the ranch):
a. 1958 Ford Pick-up (was it Jack Barron’s??? We no longer have it regardless.
b. 1968 Ford sedan (cannot figure out what car it is. We no longer have it either.
c. 1972 Dodge station wagon used for pt transportation, etc. Claire said it was never on the ranch, etc., etc.We don’t want to mess up anything, but don’t know what to put down. The vehicles and other property are supposed to be things that are on the ranch as of March 1, 1978. Obviously we don’t [know] what to say if asked, etc., etc. Help! We have asked for an extension of one month. Also cannot understand how figures were reached. I do understand principles behind straight-line, double declining balance, etc. as used it the usual sense, but applying that to say, the first entry, how does it work – what do the column headings mean in relation to what is written, etc.
2. Ron and Debbie Sines are not married and never have been, though their parents think so. They want to know how to file, etc. Debbie will get a refund regardless of whether she files single or married. We do not know what you put down over there for Ron. Debbie said she tried to get an answer last year about what to do and just couldn’t get one and so went ahead and filed jointly, etc.
3. Mike and Martha Klingman are complicated by several things:
a. Martha received a form from the govt asking info re her being head of household and her name was crossed off and Mike’s name placed there. A computer printout fed her name out and wo [so] what are we doing about it?
b. We understand over here that she was receiving welfare for April. Also Mike being at the ranch is living in a fishbowl and it’s known all over the community, as well as by Dept of Health, that we have no children living here. So for him to claim head of household when April’s passport will show she was in Guyana, etc., etc., let alone the welfare bit didn’t hold up. (Checking into Head of household status, found out that it takes the child being in the home for more than half the year and only exceptions have been for child supporting parents…
B-4 b (29): Janaro Happy Acres Schedule of Depreciations
B-4 b (30-58): Duplicate of B-4 b (1-29) [minus B-4 b (8)]
B-4 b (59-87): Duplicate of B-4 b (1-29) [minus B-4 b (8)]