Church in Fremont, California, Faced $85,000 Tax Assessment Over Classical Conversations Program, Report Says

Calvary Chapel Fremont, a congregation in the San Francisco Bay area, received a $27,000 property tax bill in 2018 because a local Classical Conversations chapel was using its building for weekly homeschool meetings. Classical Conversations Inc. (CC), a homeschool education company, operates through local directors who typically meet in churches. According to The Roys Report, several former CC directors, a California pastor and tax and legal professionals say that most local CC programs are for-profit businesses, and that using a church’s tax-exempt property for them can jeopardize the church’s property tax exemption.

Senior pastor Tim Brown said the county then back-assessed the church for the previous two years, raising the total to $85,000. The Roys Report said it had verified this figure in documents. Brown said he recalled that CC had told the church, when the program began, that the church now had “membership” with Alliance Defending Freedom (ADF), a legal group that defends religious freedom. On its website, CC describes ADF’s role as helping churches understand issues related to use of church property by homeschooling communities and the real property tax exemption. Brown said he suspected CC knew about potential tax issues and had arranged the ADF relationship because of them.

After receiving the bill, Brown called Robert Bortins Jr., CEO of CC, which is based in North Carolina. In an interview, Brown said he told Bortins that CC had brought its program into the church knowing it could cause tax problems, that Bortins had dealt with him unethically, and that he hoped the company would be upfront with churches in the future. Brown said Bortins promptly paid the full $85,000 assessment. The county later refunded that amount after Brown personally made his case to the county tax assessment board and the local CC chapter converted to nonprofit status. Brown said he still felt disappointed and misled, saying he had been blindsided that CC was not a 501(c)(3) and hoping the company would amend its practices. Honest dealing with those who host you is the lesson Brown drew from the episode (Proverbs 11:1).

The Roys Report said its months-long investigation, which included interviews with more than a dozen former CC contractors, three county tax assessors in two states and several outside experts, found that CC continues to encourage local contractors to ask churches to host groups. According to the report, CC rarely, if ever, fully discloses the risks to either the church or the contractor. The report also said Calvary Chapel Fremont is not the only church to have been assessed thousands of dollars in property tax after hosting a CC program, and that another California church received a similar bill in 2016. It further reported that when a CC contractor tried to warn churches about the issue, CC responded critically.

CC did not answer questions about specific incidents raised in the report. A public relations firm hired by CC provided a statement saying, in part, “We regularly consult with our legal and tax advisors to ensure we are acting with integrity and in compliance.” ADF’s media relations contact told The Roys Report that the legal group had no comment at this time.

The Roys Report said CC’s business model recruits homeschool parents as directors, who conduct weekly classes using CC’s curriculum, usually in churches. These groups pay reduced or no rent by emphasizing the “ministry” aspects of their work. According to the report, CC expressly encourages this arrangement. Its 2020 Licensing Guide for directors includes more than a dozen references to churches hosting CC groups, with specific expectations about contracts, fees and insurance.

Source: Read the original report