ONLY ON 3: Church-owned home where suspect arrested loses tax-exempt status

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Submitted: Thu, 07/18/2013 - 9:43pm
Updated: Fri, 07/19/2013 - 4:43pm

WILMINGTON, NC (WWAY) — New Hanover County says the church-owned home where a drive-by shooting suspect was arrested Tuesday will no longer be tax-exempt.

After a drive-by shooting in Creekwood Tuesday night ended with police arresting a man at a home on Wood Ridge Road near Monkey Junction, we found the home is owned by 5th Avenue United Methodist Church. We also learned the church has been renting it out while not having to pay property tax.

“The General Statute says that a church that has property that is solely and wholy used for religious purposes is exempt from taxation,” New Hanover County Tax Administrator Roger Kelley said.

Kelley believes the home was at one point used as a parsonage for church pastors, but the church told us it’s been renting the house for a couple of years as Section 8 housing.

“We got an anonymous tip from someone that the church was renting out a house and getting the exemption on the house,” Kelley said.

That tip led him to send an employee to check out the situation.

“The tenant verified that they were renting the house and had been renting it for the last four years or so,” Kelley said.

Kelley says the church never informed his office of the change of use. Now he says the church owes about $6,500 in back taxes for the past five years. Unless the church can prove it used the home for church purposes, it will have to pay the full amount plus penalties by Jan. 6.

We tried to talk to 5th Avenue UMC Pastor Joseph Peterson again today. He confronted us outside of the church and threatened to sue us for reporting the story.

Pastor peterson did say the church did not know about the problem with the taxes. He says if the church does owe money, it will pay it.


  • Concerned Citizen says:

    I admit, Pastor Peterson has turned a blind eye on our concerns. That being said, let’s put some pressure on the other responsible parties as well. Why has Wilmington’s Best Property Management not checked on the house. There is no trash service, so the garage is full of trash bags stacked up on each other. Most importantly, where is the SECTION 8 INSPECTOR?!! They are responsible for conducting checks on the property. How did they not know there is a convicted felon on house arrest there?!

  • antithug says:

    What about the probation or parole officer? They came to the prior to and after his release yet they over look the fact that it was section 8.

  • antithug says:

    They were surely notified on May 8th 2013 that there was a felon in their, and that he had lived there when he commited his last offense. This was their reply on May 9th,
    “Thank you for your notification of these violations. We will investigate this further. Please keep in mind that we are unable to discuss specifics about a client due to confidentiality laws, however, we will follow up on your report. Also, please note that we are required to allow time for the client to appeal any decision we make. Therefore, it may seem as if we are not doing anything about your complaint, but rest assured we are. Again, thank you for your email.”

  • Guest2020 says:

    So, in essence what you are saying is that Jesus would not have paid taxes. Mark 12:17 is not the only verse in the Bible that addresses paying taxes. Who are you to judge whether or not I am a “true believer”?

    Double jeopardy is about criminal cases and has absolutely nothing to do with paying taxes. I don’t agree with all the taxes we have to pay and the founding fathers would be rolling in their graves if they knew how much we pay in taxes to the federal government. I know that more people would actually receive help if we were allowed to have more control of our money. And what some people don’t realize is that if you give one hundred dollars to a church specifically to help feed hungry people, then they are required to use every penny of that money to help hungry people. You give the government a hundred dollars to feed the hungry, they take theirs off the top, pay some bureaucrat to oversee things, pay someone to to act as the middle man, pay the person who goes to get the food, and then use the remaining five dollars to actually feed the hungry.

    Do all churches abide by the laws? No. Should churches who don’t be held accountable? Absolutely. When they apply for tax exempt status, they are agreeing to the laws governing tax exempt entities. They are bound by these laws. It sets a poor example for a Christian organization not to keep its word.

  • slatesplace says:

    Yes, but that as in answer of a question from the Pharacies who were trying to send Jesus to Jail. It was answered in such a way that he would not go to Jail, but true believers would understand. That which “belonged” to Caeser really belonged to God.

    In reality why should I have to the government every year for land I own. Is that not double jeopardy? I pay the tax on the land when I buy it and then pay it every year after? This is how little old ladies really get cast out in the street. They live in a house they bought and paid for, they reach an age of limited ability and income. The government comes around and shakes them down. When they can no longer pay the tax they throw them out in the street and sell the house to someone who can pay the tax? Taxes are the purest form of evil. Everything that is done with tax money could be done by members of the local community, build schools, hire police, etc… It just would not pay a bunch of bureaucrats to sit around on their fat behinds and live off the fruits of others all their lives.

    “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” Thomas Jefferson

  • Guest Mechanic says:

    That’s quite an attitude for a so-called “man of God” to cop. WWJD?

  • Vog46 says:

    When it comes to money any church loses any pretense of being religious.
    Money is the root of all evil – funny how churches have an awful lot of it.


  • windy says:

    Methinks he would not knowingly commit tax fraud, nor would he rent the church ‘parsonage’ to a bunch of hooligan Section 8 gangsters.

  • Guest2020 says:

    Jesus would “render unto Caesar, that which is Caesar’s”.

  • Guest-o-matic says:

    ..after “his” church was caught red-handed cheating the system? They knew exactly what they were doing!

  • Guest7969 says:

    Would say so…

  • Guestomfg says:

    So funny !!!! Pay up buddy.

  • RSmith says:

    They had no problems getting the home qualified for Section 8 assistance, but didn’t know they had to pay taxes on it? BS!

    I think the church itself should lose its tax exempt status.

  • GuestWrong says:

    So the pastor thought he can sue over reporting public information? Perhaps he best pray for guidance to avoid what happened again in the future. To suggest that his church (as owner and landlord) had no responsibility for the home and it’s effect on the community is to cast a blind eye and deaf ear to the neighbors.

    Sir, your church has a responsibility to be a responsible member of the community and reflect your church’s values in everything it does. Being a good member of the community does not stop at the foyer of the church.

    I suggest the church (or any other charitable institution that rents homes for that matter) take a lesson from this and look at their renters and make sure they are the ones that are supposed to be there.

  • Challengetheworld says:

    This is exactly what should have been done in this situation. Tax all of them! They are businesses in hiding.

  • anne says:

    VOG – if you are going to quote something, get it right. “The love of money is the root of all evil”

    As a Christian, I find this whole story appalling. We are to be good stewards of the money that God has given us and this church is not. They have defrauded the government and the people if this house was used for this purpose.

    As church people, they should have dealt with the issue immediately and not blamed it on the rental company. The church, after all, are the owners of the property.

    This needs to be fixed now!

  • Vog46 says:

    If I’m going to quote something I’ll put quotation marks around it.
    Understand that the desire for money is wrong but people who use others peoples money also inflict serious harm. They don’t necessarily “love” the money they use the money. To them it’s a tool. So, tome, money is the root of all evil not just the love of money.
    Churches have money by hiding behind the shield of no property taxes – yet they use water and sewer, and expect police and fire protection when needed – just like a homeowner or regular business would.
    It is a travesty that these churches and all affiliated properties don’t pay taxes.


  • hearmenowboy says:

    As a tax professional no one did anything wrong on the churches behalf. If they are a real non-profit church (501-ce) and they own the propety (not paying mortgage) than they can rent out the parsonage and collect the monies to use for church purposes and property upkeep. They do not have to file the earnings into the Other Incomes category unless they are using it to pay the mortgage on the property. And then that money would be filed under income but exempted as parsonage payment AND AGAIN NO TAXES OWED.

    So mostly the property managers and parole officers are in the wrong and will have to answer the real questions.

  • ChefnSurf says:

    - “the church did not know about the problem with the taxes” … That’s a pretty good sized organization with a significant amount of real property assets. They don’t use accountants?
    – Neighbors near the rental property have tried repeatedly to talk to the church about problems … and yet the church has deliberately failed to respond.
    – Pastor Joseph Peterson threatened to sue for reporting the story … Even he’s aware of the concept of freedom of the press. That’s exactly the kind of knee-jerk response one would give if caught with one’s pants down.

    Churches are supposed to be pillars of moral fortitude in our communities. 5th Avenue United Methodist Church members and specifically Pastor Joseph Peterson are being just the opposite. There is no real plausible excuse for what has transpired. This is the kind of stuff that turns people away from organized religion.

    Preaching it on Sunday means nothing if you’re not really living it Monday through Saturday.

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