New London Cracking Down on Tax-Exempt Churches

May 10, 2006

New London, Connecticut—recently in the news for its eminent domain practices—is now the subject of a New York Times article (registration required) about its tax assessment practices.

City tax assessors have concluded that the Second Congregational Church’s Drop-In Learning Center—which for the last 35 years has provided mostly low-income children with a safe place to go after school and during vacations—is not eligible for tax-exempt status. The city was so adamant that the Church was nearly seized and sold at auction to pay the taxes:

After co-sponsoring an after-school program for 36 years, first in a building it owned in New London and then on its own property, the Second Congregational Church of New London received its first-ever tax bill last July, for $3,900. Church officials, thinking the city had made a mistake, threw the bill away.

The city kept it, though. The bill accumulated interest and fines, and the tax assessor’s office sent a collection notice in September, then a warning in March that the property would be sold to pay the taxes. Not receiving a response, city officials placed an advertisement in The New London Day on April 14. “Public Auction,” it read.

As far as the city was concerned, the grand Gothic structure of the church was going up for sale on June 22, for a total tax payment of $4,339.70. (Read the full piece here.)

The article notes that such crackdowns on nonprofits are becoming more frequent as municipalities look for additional revenue, and that others like the Second Congregational Church face the option of paying huge tax bills, or eliminating needed private programs like the Drop-In Learning Center.


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