Religious group failed to report income from ‘donations’

A religious corporation based in Hakone, Kanagawa Prefecture, failed to report to tax authorities 360 million yen made on sales of Buddhist alters between fiscal 1993 and 1995, it was learned Mar. 20.

Hakone Daitenguyama Shrine collected more than 5 million yen from each follower as donations for enshrining the ashes of their ancestors, sources close to the taxation authorities said. The sources said the shrine provided each follower who donated with a Buddhist alter, and tax authorities concluded that the “donations” should be counted as sales because the market price of the alters is close to that of the donations.

Shrine officials reportedly confessed to the tax authorities’ claim, saying about half of the donations were used for purchasing the alters. Donations to organizations registered as religious corporations are classified as nontaxable income, according to the law.

Tax officials have also notified a construction company in Aikawa, Kanagawa Prefecture, that is affiliated with the shrine that it failed to report on about 250 million yen in sales gained in a land transaction with the shrine, the sources said. The total amount of unreported taxable income will reach 610 million yen, and the authorities are expected to order the shrine group to pay more than 200 million yen in penalties and back taxes, the sources said.