With the receipt of a sworn statement from the Anchorage Baptist Temple denying that it was selling the Rev. Jerry Prevo his parsonage, the Anchorage assessor on Monday formally concluded his investigation of the tax-exempt status of residences owned by the church.
The investigation, reported Sunday in the Daily News, concluded that the church's claim for tax exemptions on the residences of two of its pastors was improper and that back taxes were due.
But the bill for back taxes will not include the residence of Prevo, the Baptist Temple's chief pastor.
The statement, delivered Monday to Anchorage Assessor Marty McGee, affirmed that a 1994 real estate sales agreement between the church and Prevo was terminated in 2005. The affidavit was signed by Floyd Damron, chair of the church's board of deacons.
As for the other two properties, McGee found that the pastors occupying them were in fact purchasing them from the church.
"The use of these two residences, for the benefit of an individual, violated the exclusive use for religious purposes required by state law," McGee wrote in his memo.
A message left for Prevo at the Baptist Temple was not returned.
The law says a tax exemption must be granted if the church owns the property and it is occupied by a minister or religious school teacher. In the past, McGee said, the city determined ownership based on real estate title information in the state recorder's office and the church's application for tax exemption.
But that method came into question because of the 2011 divorce of Prevo's son Allen, an ordained minister at the Baptist Temple and an occupant of one of its houses.
Allen and his wife testified that he had an unrecorded deal with the church to purchase the home. They said he had been accumulating equity in the home as if the church was his mortgage holder.
McGee said his investigation uncovered a second unrecorded sales agreement, between the church and the Rev. Tom Cobaugh.
On Friday, McGee said he would issue a bill for back taxes going back to 2006, leading to a total bill through the current year of $61,286. But his final decision Monday shaved off one of the years from which he sought back taxes, reducing the bill by $7,988.
McGee said the statute of limitations doesn't allow him to collect more than six years in back taxes, based upon when his investigation began. While he made a preliminary inquiry into the ownership issue in 2011, he said his formal investigation didn't begin until January.
"In 2012, information became public through an article published in the Anchorage Daily News that a minister at the Anchorage Baptist Temple may have had an 'ownership interest' in a home currently exempt from property tax," McGee wrote.
In his memorandum, McGee said he investigated the status of the 14 residences claimed as exempt church property for 2012. Nine were occupied by Baptist Temple ministers, one was vacant but had formerly been used by a minister, and four were occupied by religious school teachers.
Assessor staff interviewed most of the ministers and reviewed the files for all of them. They files revealed the 1994 real estate installment sales agreement between Jerry Prevo and the Baptist Temple but they also contained evidence the deal had been rescinded in 2005.
In his interview with city officials, Allen Prevo said he had incorrectly testified during his divorce that he had acquired an ownership interest in his house. Nevertheless, in his findings, McGee said he used information from the divorce file that said he in fact had such an interest.
The other ministers who were interviewed by the city all said they didn't believe they had any property rights to their dwellings.
Reach Richard Mauer at rmauer@adn.com or 257-4345.
