IHOPKC v. Jackson County Tax Assessor

even on appeal, IHOPKC won property tax exemption on apartments it rents, but the hearing records may not tell the whole story

When the initial allegations against Mike Bickle/IHOPKC broke in the midst of my longest-ever social media break, I used much of my discretionary time doing what most academics do: researching. I still can’t explain everything I found, or connect all the dots of the fiduciary puzzle, but perhaps forensic accountants, tax attorneys, Jackson County, MO, or others with nonprofit tax-exempt experience know more than I. Thus, I can only present these facts to you as just those: Facts. I am not an attorney, I am not an expert, nor do I claim to be.

Early in my research, I stumbled upon a hearing from 2018. You can read the case in its entirety here.

Original case file. The county appealed and lost later that year, upholding IHOPKC’s win and tax-exemption for the Herrnhut Apartments.

Entitled International House of Prayer – Forerunner Christian Fellowship v. Robert Murphy, Assessor Jackson County, the case was argued by Eric Oppriecht, an IHOPKC member of the Executive Leadership Team (ELT) for some time (whether he is currently, I cannot confirm, but records show he was listed through at least October of 2023).

In the case brought before the Jackson County (MO) Tax Commission in June 2018 regarding a 2017 property tax assessment, IHOPKC argued that the parcels of land owned by the nonprofit ministry, which house the Herrnhut Apartments, were being wrongly taxed by the state of Missouri, since they are part of the nonprofit, tax-exempt entity and meet all the qualifying criteria for being so included.

IHOPKC won this case. The Jackson County Tax Commission appealed the decision to the State Tax Commission—and lost. IHOPKC’s win was upheld, and the ministry has not has not been subject to paying property taxes on Herrnhut.

For this post, I examine the case, and then some facts that appear inconsistent. Please realize that since I am not an expert in tax law, I am writing to inform. Perhaps what I offer here as information will aid another in another known writing function, which is argue.

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Stay with me as I need to take you through some of the case facts first, this is directly from the court document (note that the document holds both the original case and appeal, and I am taking citations primarily from the appeal, at the top; mostly, they are similar in information):

Eric Oppriecht (Oppriecht) testified on behalf of Complainant and explained that International House of Prayer – Forerunner Christian Fellowship (generally known as International House of Prayer or IHOPKC) was founded in 1999 and that its primary purpose “is to exist as a Christian church…to wholeheartedly love Jesus Christ and others through establishing perpetual worship and intercession; serving the poor, infirmed, and orphans; planting churches and houses of prayer; proclaiming Jesus Christ locally, nationally and to the nations of the world; calling forth, training and mobilizing this generation as worshipping, interceding prophetic messengers; and joining with others to accomplish this mission.”  IHOPKC is a recognized tax-exempt Missouri nonprofit corporation operated exclusively for charitable, religious, and educational purposes.

Keep in mind here the last line. The ministry already held tax-exempt status. This case is only about these two parcels of land and the taxation related to them. It continues:

One of the fundamental missions of IHOPKC is education. IHOPKC operates IHOPU, a college devoted to ministry. IHOPU consists of several schools ranging from the School of Ministry, Music Academy, Media Institute, and a Study in Chinese. IHOPU attracts students from throughout the world. Students submit an application to IHOPU. Tuition may include room and board.  Scholarships are available to qualified individuals based on need.

Next, please take special note of the following paragraph, which speaks directly about the Herrnhut Apartments, and which piqued my curiosity—also note I have added the emphasis here:

The remaining units, other than one, are provided to members and staff of IHOPKC and the Order. The one unit is occupied by an elderly couple, the Suttons, who reside in a 975 square foot unit (entire parcel is 227,533.61 square feet) and who resided at the complex long before IHOPKC obtained the complex. The Suttons pay a reduced rent. IHOPKC has not, and will not, increase their rental rate. Oppriecht testified that the Suttons rent would not be increased and that Complainant will not evict the Suttons even if they could not afford rent.¹ Further, the church provides financial assistance to those members who no longer follow the central tenets of the church and assist the ex-members with finding and financing new accommodations elsewhere.

My reasons for this added emphasis are twofold:

1. First, I am unfamiliar with the Suttons, but I want to be certain that they are still there and doing okay. Can someone please reach out to me and let me know that they are, and also let me know that they have, indeed, not had any rent increase since the case before the Tax Assessor. The fact that the pandemic started late the next year and rents have soared since would be an excellent data point to ensure this couple is okay. The commitment to hold their rent was made in both the initial case and appeal.

2. I also added emphasis because I doubt the veracity of the latter portion, based on the people to whom I have spoken, and even on my own experience. While I only leased briefly, there was certainly no indication I could have any assistance if I needed it. Certainly, I was not allowed to smoke, drink, or have pets in the apartment (none of which I did/had anyway), but honestly, there was little oversight since I was not living there in a formal internship program. I could have been getting drunk and doing other things that had no lasting evidence (ie, smoking would have been obvious, but certain drugs, sex, or porn would not have) and no one would have known, as long as I paid my rent.

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Breaking down the incongruity of statements

Similarly, one woman with whom I spoke laughed—loudly and heartily—at the idea that IHOPKC would either provide financial assistance to those members who no longer follow the central tenets of the church or assist the ex-members with finding and financing new accommodations elsewhere. The idea seemed so blatantly incongruous to her—and to me, I admit—that the lofty thought sounds nice, but presents as unlikely.

Examining the former statement further, most who no longer “follow the central tenets of the church” have left due to one of two prevailing reasons: 1) they either have “deconstructed” their faith, which means a variety of things, depending on whom you ask, or they have 2) adopted an acceptance to the LGBTQIA+ identity or lifestyle, which may not indicate a personal identification as such, but possibly just a theological disagreement.

Thus, the idea that IHOPKC would provide financial assistance to people who now are separating from faith tenets in one way or another is patently incongruent with the radical “yes” to a way of operating that IHOPKC purports to teach.

Note that I am not trying to make a statement arguing what is good, bad, right, or wrong. I am simply offering that it doesn’t occur.

Wait, wait, Dr. Dénouement, or should I say, Dr. Know-it-all! How do you think you know so much! You just said you are not a lawyer or expert.

Why, yes, Virginia, that I did! Let’s keep looking, though.

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What makes Herrnhut Apartments tax-exempt?

While it’s generally not difficult to grasp why IHOPKC would be an IRS tax-exempt organization in the sense that it runs a prayer room, which is basically a church—semantics aside—FCF, a formal church, an unaccredited Bible “university,” and other typically tax-exempt ministry groups, Herrnhut is a bit different, seeing as many IHOPers rent homes or rooms separately, and that rents, and even rooms for rent, cost as much in the IHOP community as they do anywhere else (sometimes more, despite the fact that many IHOPers live in poverty); this is a curious question.

Looking at the Herrnhut page, the rents today (01/23) are a bit less, but comparable to local apartments, including one of the apartments IHOPKC itself links on its housing page (most links are broken). Have a glance comparing them; they are across the road from each other:

Current Herrnhut rental rates (1 bedroom fully furnished rent for $1200 a month)

Prairie Walk Apartments (11 January 2023)

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IHOPKC: We’ve “never permitted the forcible eviction or removal of any tenant”

The case notes explain that being tax-exempt doesn’t prohibit charging people for services, of course. Citing Community Memorial Hospital v. City of Moberly, 422 S.W.2d 290, 292 (Mo.1967), it explains the court “ruled that a large income from paying patients did not jeopardize a hospital’s charitable tax exempt status due to a hospital policy under which ‘[n]o charge for board, room, general nursing, medicines, medical care and attention shall be made of those patients who are unable to pay.’”

This explanation made sense to me; I recall needing emergency medical care when I was working at IHOP, and every job I had was as part-time as they come. I received free care from Truman Medical Center when I made ~$15K that year. Everyone on the base knew to go to Truman. A few days after my ER visit, I showed up for my meeting with some nice lady in the office, showed her my proof of (no substantial) income, and she gave me a card that qualified me to see TMC doctors for the next year. Truman was subsided. It charged some people, but still qualified for tax-exempt status.

In Community Memorial Hospital v. City of Moberly, the key decider was purpose: "Because of this policy, the Court found that its purpose was not to make profits but to devote any income from its operation to its patients, whether or not they could pay.”

What IHOPKC argued next was most interesting, however, though. The case states the following (emphasis added):

As in Community Memorial Hospital, IHOPKC has never permitted the forcible eviction or removal of any tenant (be it through a rent and possession or unlawful detainer action) and instead makes scholarships available to students in need who reside there. The organization even provides financial assistance to those members who no longer follow the church’s central tenets and assists ex-members with finding and financing accommodations elsewhere.

I’ve already discussed the theoretical complication of the last portion, but let’s examine that parenthetical element because that’s bothering me this week. And I want IHOPKC’s Oppriecht to explain it to us.

First, let’s take a look at a whole lot of pictures, and let me say that these pictures all came from a free and publicly accessible government website that absolutely anyone can use. I have chosen to remove the names, even though they are public. But have a glance at the number of IHOPKC and its affiliated ministries (Friends of the Bridegroom, Shiloh Ministries) “Rent and Possession" and “Unlawful Detainer” that exist in these pages:

This page was most striking, some are Herrnhut apartments (#2 is Hertz suing IHOP—oops!) and list Rent and Possession and Unlawful Detainer.

While two of these are current, the most recent occurred 5-6 days after the Whistleblower recorded audio of former IHOPU President David Sliker.

It must cost a lot to have another law firm ready to go. I introduce you to Anderson & Associates. They say they keep “real estate investors in business.”

The process. (Note that this is NOT “Jane Doe” from the abuse accusation).

By a couple weeks before Christmas, the unit was empty.

And here’s a link to the order (note this is only the order, and I have removed 6 pages of the identical process servers/court summons):

According to the order, at least one person, of the three on the order, violated a section of MO § 441.740-760. Later, the judgment specifies, this is an “emergency eviction” due to Chapter 441.740.2. If this is correct, then some sort of drug-related activity occurred on or in the apartment, keeping in mind it could be (I think), any drug that IHOPKC sees as violating its tenets, since its housing is private, would they not evict that one person, or at least help that person find help and/or housing?

What we know about this eviction is this—keeping in mind that correlation ≠ causation:

1. On either 2 or 3 November a “Whistleblower” was called to a meeting at IHOPKC, where he recorded an audio, which was mostly of the Whistleblower and former IHOPU President David Sliker, but also included FCF Pastor, Isaac Bennett. That recording was passed to some soon after; I verified the date prior to this story; it was not until 17 November that the audio was actually publicly leaked.

2. The legal notice of eviction came within 5-6 days after the recording was obtained. The Whistleblower was a (former) friend of Sliker, but another name listed on the eviction notice is a Bickle family member (a different last name). Whether either of these incidents is related remains unknown. The third name on the eviction is listed as a John Doe/ Jane Doe, and is not to be confused with the “Jane Doe” connected to Mike Bickle. (Law enforcement and other entities routinely use Jane and John Doe to anonymize identities for various reasons. Abuse victimization is only one reason. Sometimes a name is unknown; sometimes the person is a minor. No conclusions can yet be drawn regarding correlation.)

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“The Franciscan Test” for tax-exemptions

To further rule that IHOPKC would qualify as tax-exempt with Herrnhut, the court examined the evidence against the “The Franciscan Test,” which is based on Franciscan Tertiary Province of Missouri, Inc. v. State Tax Commission of Missouri² and is explained in the court document, which notes that “Complainant’s failure to prove any single element is sufficient for denial of exemption.”

You can dig further into the order if you like; it’s written in relatively plain language, but the bottom line is that IHOPKC’s Oppriecht was able to prove to the Tax Commission court that IHOPKC did, indeed, pass the three-pronged Franciscan Test for tax-exemption. Here were the final conclusions, which were upheld on appeal:

Simply put, IHOPKC owns and operates the property on a not-for-profit basis.  It simply is an extension of the religious worship and educational experience provided by IHOPKC.

Logical enough, without having inside knowledge of fiduciary details.

The second prong of the Franciscan test is that the property must be dedicated unconditionally to a charitable activity.

In this section, enough precedent covers why IHOPKC would fulfill this, even if not every waking moment of the apartments’ usage would be “dedicated to charitable activity.” On this one, based on precedent cases, it makes sense. (See the second prong explanation for more).

But number three gets dicey (emphasis added):

The third prong of the Franciscan test requires that the property benefits an indefinite number of persons... “the state has a distinct interest in the physical as well as the moral well-being of this class of its citizens,” and providing housing to its citizens “serves the public welfare” by providing a “place of study… under wholesome and decent influences and with proper protection and surroundings calculated to inculcate Christian character and develop good citizenship.” … In this appeal the public benefits from the subject property which promotes good citizenship by teaching students, interns, and members of the church a philosophy of traits that contribute to good citizenship–including service, forgiveness, and compassion, among others – and supports the many community service and outreach activities of the organization.

Regarding the limited factor of reducing the likelihood that its residents would ever become public charges, the subject property reduces the likelihood that its residents ever become public charges by educating students in many subjects that are relevant to today’s workforce and provides interns and students with the tools to become employable ministers.

While I would concur that IHOPKC served in training both employable ministers and media technicians, the sweeping comment that they educate many students in subjects relevant to today’s workforce is a stretch.

Seeing the early “reports” and “responses” put out by the ELT early in the crisis had me concerned that they were lacking in teaching rhetoric and argument courses. While some of the faculty there is educated well with college degrees, and also some have expert technical skills in media and technology, as someone who left there specifically because I realized I was unduly stressed and working at 1 a.m. for free and could be a paid college professor full time, which I have been since, I can say sincerely that I do get concerned about what happens to students who do not have basic writing skills.

I support gap years; I support Bible college and ministry. I am not anti-everything. But the State of Missouri seems to think that IHOPKC doesn’t need to pay taxes on apartments it charges a fair rent to dwell in because it’s somehow teaching marketable skills to a class of people. That’s not quite the case.

I reiterate: I don’t claim expertise in tax law. I present these as facts, publicly available, to examine and consider. I’ve only redacted personal names for respect due to the wide distribution here, but again, nothing here was secret anyhow.

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In the original case notes, this section was more specific and contained this footnote:

“[1] One elderly couple, the Suttons, resides in a 975 square foot unit (entire parcel is 227,533.61 square feet). The Suttons pay $600/mo, which is $75/month lower than what others pay for an identical unit. IHOPKC has not, and will not, increase their rental rate. The Suttons resided at the complex long before IHOPKC obtained the complex. Oppriecht testified that Complainant will not evict the Suttons even if they could not afford rent.  Further, the church provides financial assistance to those members who no longer follow the central tenets of the church and assist the ex-members with finding and financing new accommodations elsewhere.”

Franciscan Tertiary Province of Missouri, Inc. (Franciscan) (plaintiff), a nonprofit organization, owned an apartment building that housed elderly, low-income tenants. Franciscan provided social activities for the tenants, such as card parties, discussion groups, and shopping trips. The City of St. Louis levied property taxes on Franciscan’s building. Contending that the building was exempt from property taxes, Franciscan sought review by the State Tax Commission of Missouri (the commission) (defendant). The commission held that Franciscan was required to pay property taxes for the building. Subsequently, Franciscan filed suit in trial court, and the court upheld the commission’s ruling. Franciscan appealed to the Missouri Supreme Court. (Source)

2.