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Home-to-church conversion cuts tax bill

July 17, 2008

By converting his $3 million home to a church, an Illinois man has saved himself around $80,000 in property taxes.

But officials of the Village of Lake Bluff say not so fast.

Church_steeple
While they try to sort out whether the new Armenian Church of Lake Bluff is indeed legitimate, they have notified home/church owner George Michael that he owes the municipality $115,000 in fines for zoning violations in connection with the property conversion.

According to the Chicago Tribune, Michael told state officials that he started the new church more than a year ago after he got an online pastor’s degree. Others are welcome to worship, he said, but typically only a few close friends and family attend services.

Michael’s attorney also noted that the home conversion was done so that Michael’s disabled wife and daughter wouldn’t have to deal with the
hardship of traveling to practice their religion.

State tax-exemption OK: Last month, the state granted Michael a property tax exemption as a place of worship.

To win the tax break, reports the Tribune, Michael presented the Illinois Department of
Revenue with a copy of his clergy license from the Church of Spiritual
Humanism
, photos of a church altar, the church’s January 2007 affidavit of
organization, church bylaws and copies of church bulletins.

Local officials, however, remain skeptical.

"It’s a honkin’ house," said Shields Township Assessor Teresia Yakes.

What about Uncle Sam? I’m also curious as how this might affect his IRS responsibilities.

Has Michael filed for federal 501(c)(3) tax-exempt status for his church?

Does it still count as his personal residence for federal filing, and tax-deduction (other than, for now, property tax), purposes?

Is his main job now that of minister, a profession that has several special tax considerations? Or is he still primarily, as the newspaper reports, a bank official and the owner of a Chicago real estate firm?

The fallout, at all tax levels, from the new Armenian Church of Lake Bluff definitely will be interesting.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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