Administrative Assistance

There is a fear of the IRS, and in may cases, rightfully so.  But the IRS cannot just arbitrarily “Come in” and investigate a church, unless they have a very good reason to do so.  EG – if the church withholds payroll taxes and then does not report and send those monies in  - this WILL get the IRS in bed with the church, and they then have their reason to look at everything else

The answer will be found within the church By-Laws.  Some churches have a ‘Democratic’ form of government, where the congregation [Membership] has all authority, while other churches are under virtual dictatorship by the pastor.  Church by-laws provide for Boards of Directors or Trustees; but what ‘rights’ the pastor has, is always defined in the By-Laws:

Unless, and until, authority has been granted an individual by action of the Board, no person [the pastor; the pastors wife; NO one] has authority to spend church monies.  The only exception to this is where a Budget has been set, [established] and monies have been approved for specific projects/programs.

Can [should] the minister file IRS Form 4361 and exempt from Social Security [SECA]?  Much counsel has been offered on this subject, but we offer an additional perspective on how to view, and make a decision on this important issue

The church has every theological right to ordain whom they will, and has historically done so.  But will the IRS allow him all the tax privileges?  Ministry who live and minister in the US are subject to US tax laws.

There is great confusion over whether the Pastor is Self Employed, or a Staff Minister.  The answer is not simple, but YES - he is BOTH!  The one has to do with how taxes are paid, the other with how the church is required to report.

The practice of providing a Cell Phone to the Pastor, and or other employees, is a very big issue with the IRS.  It is also potentially a serious Liability problem.  Adopting a simple Policy would minimize both of these issues.

How can a church legally and spiritually cover an emerging ministry?  Is there a way to minimize the start-up costs, annual expenses, any IRS involvement and liability?  Yes there is - and on a Biblical basis.

How will you respond when a Registered Sex Offender comes to your church?  Will you allow him to attend, under certain 'conditions'?  Have you a written Policy, with safeguards?

Regarding Marriage, Employment or Volunteers - If it is the Churches Policy that church membership is a requirement to be involved in ANY church activity, this is the ultimate in having a "Fire wall" of protection from the homosexual activists, and aggressive sexual predators. And it's legally defenseable.

Church leaders and pastors don't do enough thinking and planning in regards to estate planning and retirement.  Key Man Ins.policies; Retirement ; Health and Dental Ins. plans, are a must for the pastor

The greatest concern for the church is liability.  Even before calamity [lawsuits] strike us, we should be equipped to respond on a Biblical basis.  As regards church discipline, we can only do what is clearly defined in our By-Laws.

Minutes are the "Memory" of the corporation, and should reflect that leadership has conducted all business according to the By-Laws. An incomplete Minute Book could be disastrous, but it can be 'caught up,' and all past actions ratified.

An old saying, "It's not what we say that counts - but what is perceived."  Integrity begins with counting the offerings, but it also includes our governmental structure.  Is pastor accountable to other pastors?

Precious little is taught in Bible School, preparing pastors to be the CEO of a Corporation, the legal entity.  In the vacuum of understanding, attention to essential detail is often missing, leaving the church vulnerable to a lawsuit.

Church policies will help us to protect our sheep from satan's influence and attacks, and are developed when we have thought through the "What if's," about any issue. This is called, "Taking thought beforehand."  [2 Cor 8:19-21 Amp Version]

Some churches have discretionary fund accounts, in order to meet certain needs.  If pastor has discretionary authority to disburse those funds, the IRS requires strict provisions.  Otherwise those monies will likely be deemed HIS taxable income., and the contributions not tax deductable.

Properly Credentialed Ministry are privileged to receive a large portion of their compensation as 'Housing Allowance,' free of state and federal tax - IF - and the "if" is what is discussed in this article.

There is really no such thing as a, "Tax Number." What is usually thought of as a tax number is the FEIN. This is the "Federal Employer Identification Number." Something like our SS number. It is NOT required to put this number on the receipts you write, but it not a problem if you want to do so.

The adopted By-Laws, totally define “how” the church is to be governed. As a Democracy? Or Biblically? Sometimes called the “Articles of War, they can eliminate in-house disputes, allowing the pastor to lead with the freedom and authority God intends but, requiring accountability.

Covered_Ministry

To mis-classify a worker as a "Self employed" person, instead of an employee is subject to future problems with the IRS. And - the church has now unwittingly opened itself up to the possibility of a liability issue, with absolutely no insurance coverage

 What would an IRS auditor look for, and evaluate in reviewing the church records? In this article, we give you a sampling of a few of the points we discuss in The Church Administration "How To" Manual.