There were at least two corporations registered as Children of God, Inc. One was registered in California by Fred Jordan and another was registered in Texas by members of the Children of God.
According to an October 1974 New York Times article, "Children of God, Inc., a nonprofit Texas entity, was denied a Federal tax exemption as a religious institution in 1972 and has been dissolved, but another organization, Youth for Truth, Inc., is serving as a financing conduit, Mr. Lefkowitz charged."
According to a January 1975 Associated Press story, both corporations were defendants in a $3.8 million federal lawsuit filed in New York by "parents who allege alienation of their children by a commune chain".
A September 1974 report by the New York Attorney General's Charity Frauds Bureau noted that the Children of God falsely advised the public that it had tax exempt status and that, based on these false statements, at least one donor took tax deductions for contributions to the non-tax-exempt organization Children of God, Inc.:
"The Children of God, Inc.", a Texas not-for-profit corporation, now dissolved, was denied tax exemption in an IRS Letter of Determination dated June 12, 1972. Nonetheless, funds were solicited through the mail and in person, advising the public that COG had tax exempt status and that donations were deductible.
"Youth for Truth, Inc." a Texas not-for-profit corporation presently enjoys IRS tax exemption. Known COG leaders are listed as officers and directors in tax returns filed by this corporation and the addresses on the 1971 and 1972 Returns are those of COG communes.
At least one major contributor testified that he contributed to the Children of God organization and took "charitable" deductions on his income tax return for the years 1971, 1972 and 1973 in the total amount of $36,000. In 1973 however his contributions were made to "Youth for Truth, Inc." upon advice from Children of God attorneys with whom he had consulted and who advised him that there was some problem with the COG tax exemption, and that his tax exemption would be assured if he made the contribution to Youth for Truth, Inc.
These facts lead to the inescapable conclusion that "Youth for Truth, Inc." is both an alter ego and conduit of Children of God for the single purpose funnelling contributions to COG. This information has been forwarded to Internal Revenue Service, Exempt Organization Section, together with supportive material.
Source: Final Report on the Activities of the Children of God to Hon. Louis J. Lefkowitz Attorney General of the State of New York — 1974-09-30.
In a September 1978 Family publication, David Berg discussed some of the problems related to Children of God, Inc.:
2. In 1970, I advised all Colonies to declare themselves independent churches with no association or organization — only a spiritual brotherhood — no legal organizational ties — every home independent on its own except for fellowship.
3. When they disobeyed in Texas and got incorporated and in trouble, they had to close up, disband and disappear! — And the same in England!
Source: Family News Vol. 6, No. 3, page 1
In a section entitled "The History of Our Administration!" in the Book of Remembrance, Thomas Mestyanek ("Shemariah"), "Sally Scribe", and Steven Douglas Kelly ("Peter") wrote:
"...we formed "COG Incorporated" & applied for tax exemption status, which was denied. This is when we also got involved with our Dallas lawyers, one of whose wife, Jael, eventually joined the Family."
Source: "The History of Our Administration" by Shemariah, Sally Scribe & Peter
Book of Remembrance, Vol. II, p. 210-213. March 1983.
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