Church Loses Property Over Bake Sales!

Beth-El, an African-American church in the Chicago neighborhood of Englewood, purchased some property on 63rd Street in 1976. The church rehabilitated the property and established itself there. During the years that the church quietly enjoyed its existence on the property, the community improved and the church continued to grow. However, the county declared that because the church held bake sales, the property was no longer tax exempt because the bake sales were deemed a non-religious purpose. The county assessed over $100,000.00 in property taxes against the property. The church is currently in federal court trying to get its property back.

This case tells us that we are facing increasingly unfriendly local government attitudes toward churches. Local governments are doing this because of tax reintroduction programs for property. In other words, county officials are seeking to turn tax exempt property into taxable property to generate more revenue. Under these programs, local government officials have engaged in fraudulent activities. In this case, it appears that the government demonstrated hostility against the church by penalizing it without any clear reason. The county stated that the church engaged in unspecified "resale activity," which caused it to lose its property exemption. However, the church's only sales activities were occasional bake sales which are exempted under state law. Additionally, the county proceeded to continue to tax the church without properly notifying it that it had revoked its property tax exemption. It also mailed tax deficiency notices and redemption letters to the wrong address. Later, the county sold the tax deed to the city of Chicago which then moved to have the church locked down and vacated. The church appealed in federal court where the case finds itself today.

While I believe that Cook County and the city of Chicago acted improperly, I also believe that it is our responsibility to practice due diligence every year to ensure that compliance is met at all levels of church business. Had the church done a tax search every year on their property, they would have noticed that the county was taxing it improperly and could have appealed and had it corrected. Finding out that your church property has been sold off and that another party claims to legally own it is painful. Having to fight in court to retake your property is unbelievable but true in this case!


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