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June 12, 2013 3:32 PM
Mike Huckabee raised an intriguing, provocative question on Monday while addressing pastors ahead of the Southern Baptist Convention annual meeting in Houston: Should churches reject their tax-exempt status as a way to break free of government oversight and restriction?...
June 11, 2013 8:00 AM
Q: I know the recent Driscoll decision means a pastor can't claim two homes for his or her housing allowance. In a situation where a pastor answers a call in one state, but his or her family stays behind...
April 17, 2013 8:00 AM
On the heels of last week's news regarding an Indiana study that showed one in four government leaders favored payments of some type by churches in exchange for their tax-exempt statuses comes this online column by Peter J. Reilly of...
April 9, 2013 9:51 AM
A 2010 survey of local government leaders in Indiana shows one in four want churches to make “payments” or provide services in exchange for receiving tax exemptions on their properties. The survey results, released for the first time on Monday,...
April 8, 2013 8:00 AM
The IRS recently released its annual list of the "dirty dozen" tax scams. Knowing about these scams can help church leaders avoid falling into these traps. Identity theft and phishing are still the top two, and many of the...
April 4, 2013 8:00 AM
Editor's Note: This is the third in a series of guest posts from Dave Travis' book, What's Next?:2012 Edition. The first post addressed church finances and the second post addressed financial accountability. Travis is CEO of Leadership Network. Where will...
March 28, 2013 8:00 AM
Editor's Note: This is the second in a series of guest posts from Dave Travis' book, What's Next?:2012 Edition. The first post addressed how much--or little--the economy is to blame for church failures. Travis is CEO of Leadership Network. Here...
February 25, 2013 8:00 AM
A brief Q&A recently featured in The Wall Street Journal offers tips for what to look for in a tax preparer. Many people hire someone to help them file their returns these days, the author notes, mostly because of the...
February 14, 2013 8:00 AM
It's a common scenario at local churches across the country: A member faces a significant medical condition, racking up major debt in the process. Others at the church learn of this challenge and wish to help. Can they donate to...
December 4, 2012 2:54 PM
An independent commission formed by the Evangelical Council for Financial Accountability at the request of Sen. Charles Grassley, R-Iowa, in January 2011 issued its first public findings today through a 91-page report that is available for free download. The report...
December 4, 2012 8:00 AM
Q: I realize love offerings need to be included in a pastor’s taxable income, however, should an individual receive tax-deductible credit for their gift if the church board authorized the collection? Also, what if an individual gives a love gift...
November 8, 2012 8:00 AM
Q: I recently read an article about when churches give Christmas gifts and have a question. If a church takes up a love offering at Christmas for its pastor and staff, is that reportable as income? This would not come...
October 30, 2012 8:00 AM
Most church staffs dread an audit. Disturbing questions surround the experience: Does the IRS distrust us? Will we have to pay more out of our already slim budget? Thankfully, much of this worry is unwarranted. Most church tax returns are...
October 16, 2012 8:00 AM
Many pastors have been audited by the IRS and assessed several thousands of dollars of taxes and penalties but have no prospect for paying their bill. What can be done if you find yourself in this situation? There are...
October 11, 2012 8:00 AM
With Election Day less than a month away, discussion about the role of churches in the political realm remains robust across the country. Last week's "Pulpit Freedom Sunday," conducted by the Alliance Defending Freedom, drew nearly 1,500 participating churches, the...
October 2, 2012 12:00 PM
The U.S. Supreme Court denied a petition on Monday to take up an appeal by a minister who claimed an income tax exclusion for two homes. In late 2010, the U.S. Tax Court ruled that federal tax law does...
October 2, 2012 8:00 AM
When Christianity Today and Brotherhood Mutual Insurance Company sponsored a webinar featuring Richard Hammar on Prevent Payroll Mistakes: What Churches Need to Know, a record number of church leaders registered for the event. That’s likely because payroll taxes present...
August 30, 2012 8:00 AM
Q: Our church designates, in writing, a housing allowance for our pastor on an annual basis (usually late November for the upcoming fiscal year–for example in November 2011 we submitted our proposed budget for 2012). We now have a member...
August 27, 2012 8:00 AM
We've recently looked at the political activity of churches. In the upcoming September/October 2012 edition of Church Law & Tax Report, Rich Hammar revisits what the Internal Revenue Service says is--and isn't--allowed by churches when it comes to political candidates...
August 16, 2012 8:00 AM
In the August 2012 edition of Church Finance Today, Richard Hammar examines a recent, high-profile case involving a couple whose substantial contributions to a church were denied tax deductibility by the Internal Revenue Service: A married couple (the “taxpayers”) timely...
July 19, 2012 8:00 AM
Q: Can a church give a cash benevolence gift to an employee? And is it taxable income? A: Yes and yes. For better or worse, churches seem to attract needy employees. They may need their car repaired or have...
July 2, 2012 8:00 AM
On Father’s Day, numerous churches in Maine used their offering time to take up collections for a political action committee (PAC) campaigning against a same-sex marriage referendum on that state’s ballot. An article on ChristianityToday.com points out such an...
June 28, 2012 10:34 AM
This morning's Supreme Court decision to largely uphold President Obama's health care reform legislation appears to preserve a health insurance credit for small employers, including churches, to help cover the costs of providing coverage to employees. This means churches that...
March 6, 2012 8:00 AM
Ministers are not exempt from paying federal income taxes. Since 1943 (Murdock v. Pennsylvania, 319 U.S. 105), the United States Supreme Court has ruled that the First Amendment guaranty of religious freedom is not violated by subjecting ministers to...
March 1, 2012 8:00 AM
The recent payroll tax holiday extension keeps a 2-percent reduction for employee and clergy Social Security withholdings in place throughout 2012. We've already covered what those rates should be on paychecks. But the reason why it is so important for...
February 28, 2012 8:00 AM
Each year, the Internal Revenue Service releases the top twelve tax scams that individuals, nonprofits, churches, and businesses should watch for and avoid. The newest list, issued by the IRS this month, reveals the latest "dirty dozen": Identity Theft...
February 21, 2012 1:01 PM
Congress on Friday voted to extend the payroll tax holiday through December 31, 2012, adding an extra $20 per week on average to paychecks for 160 million workers. President Obama previously pledged to sign any extension into law once...
February 21, 2012 8:14 AM
Should the IRS form an advisory committee to oversee church tax law? Is the clergy housing exclusion constitutional? To what extent should churches be accountable to the government for the way in which they operate? These are three of the...
February 16, 2012 8:00 AM
A little more than a year ago, Sen. Chuck Grassley (R-Iowa) asked the Evangelical Council for Financial Accountability to oversee an independent commission tasked with evaluating several financial and tax matters related to churches and nonprofit ministries. The goal: Determine...
February 15, 2012 12:32 AM
Congress appeared close late Tuesday to passing an extension of the payroll tax holiday through December 31, 2012, for millions of workers. A bill may be finalized Wednesday and put before President Obama for signature by the end of the...
February 9, 2012 9:21 AM
A federal appeals court ruled Wednesday that the ministerial housing exclusion in the Internal Revenue Code is indeed limited to a single home. The ruling overturns a split Tax Court decision (Driscoll v. Commissioner, 135 T.C. No. 27 (2010)) in...
January 25, 2012 8:00 AM
Churches need to report each employee’s taxable income and withheld income taxes as well as Social Security and Medicare taxes on Form W-2, and furnish copies B, C, and two of the 2011 Form W-2 to each employee by...
January 23, 2012 8:00 AM
Editor's Note (02/21/12): A previous version of this post incorrectly stated the deadline for Form 1099s that are mailed. The correct dates are now shown in the post. Form 1099s that are mailed are due on February 28, 2012, for...
December 29, 2011 8:00 AM
December often brings more contributions to churches than any other month. Be prepared to handle year end contributions accurately by listening to Richard Hammar describe a number of important rules that apply to year end giving in the video below:...
December 27, 2011 4:15 PM
After weeks of debate, Congress has finally resolved the question of whether or not to extend the payroll tax holiday that was enacted in 2011. From now until at least February 29, 2012, nearly 160 million workers will benefit from...
December 22, 2011 8:00 AM
Beginning on January 1, churches having nonminister employees (or a minister who has elected voluntary withholding) should begin withholding federal income taxes according to the new tables and instructions contained in the 2012 edition of IRS Publication 15 (Circular E)....
December 15, 2011 8:00 AM
If you have a minister or lay worker who is treated as self-employed for federal income tax reporting purposes, but who you would like to reclassify as an employee, the ideal time to make the change is on January 1...
December 12, 2011 9:34 AM
On Saturday, the Internal Revenue Service announced its recommended optional standard business mileage rates for 2012. These recommendations are ones "employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and...
December 8, 2011 8:00 AM
The IRS has announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for 2012. These include the following: The limitation for defined contribution plans is $50,000. The exclusion for elective deferrals is $17,000. The limitation used...
December 1, 2011 8:00 AM
December is a good time to check with all nonminister church employees to see if they need to file a new W-4 form with the church. The W-4 form is used by employees to report withholding allowances. This information will...
October 13, 2011 8:00 AM
A church in Boise, Idaho, received an unexpected property tax bill of $17,000 for leasing space to a local YMCA daycare, according to Northwest Cable News. The church charges the nonprofit about $9,500 a month to rent space often left...
October 4, 2011 8:00 AM
This past Sunday, the Alliance Defense Fund expected nearly 500 church pastors nationwide to participate in "Pulpit Freedom Sunday." The event, organized for four consecutive years by ADF, is designed to challenge a 1954 amendment to the 501( c)...
September 21, 2011 8:00 AM
The most common way tax scammers seem to work is through e-mail. Countless e-mails arrive daily in inboxes claiming a tax refund is available. Many tax scammers have become less shy recently, according to a recent IRS news release...
September 14, 2011 8:00 AM
An ongoing property tax assessment battle between Concord, N.H., and a 50-member church there has led to the church putting its property up for sale to make ends meet, according to a recent article in the Concord Monitor. Four...
September 1, 2011 8:00 AM
If you’ve ever created receipts for church offerings and donations, you’ve probably been asked to receipt donated property. On a more serious note, Richard Hammar offers a couple of lessons on how to meet IRS requirements for non-cash contributions of...
August 30, 2011 8:00 AM
A church in Mount Vernon, Washington, thought it didn’t owe taxes. But that changed after a recent state audit, when the state said the church owed $180,000 in back taxes and penalties, according to a TV news station. The...
June 30, 2011 8:00 AM
The IRS Advisory Committee on Tax Exempt and Government Entities (“ACT”) issued a report in June that addresses a number of tax compliance issues, including group exemption rulings. The report caught the attention of many church leaders, since thousands...
June 23, 2011 11:58 AM
The Internal Revenue Service announced this morning it has increased the optional standard mileage rate that employers can use to reimburse employees who drive personal vehicles for business purposes. The IRS increased the rate to 55.5 cents per mile...
June 23, 2011 8:00 AM
If your church runs a nonprofit agency, you may want to check this state-by-state list of 275,000 organizations whose tax-exempt status was recently automatically revoked by the IRS. Most organizations on the list no longer exist but some still do....
June 22, 2011 10:21 AM
A constitutional challenge to the tax-free housing allowances and parsonages provided to thousands of American pastors is over after the plaintiffs who filed the original lawsuit voluntarily requested its dismissal Friday in a California district court. But the battle...
June 14, 2011 8:00 AM
Last month, Richard Hammar wrote an article detailing new developments in the constitutional challenge to pastoral housing allowances under way in California. In a separate case in Arizona, the Supreme Court ruled the plaintiffs there lacked standing for their...
June 2, 2011 9:30 AM
A little more than a year ago, Bill Maher hosted actor Ashton Kutcher, author and editor Jon Meacham, and Florida Congresswoman Ileana Ros-Lehtinen on his HBO program, Real Time. A YouTube clip from the program circulated recently throughout social...
May 5, 2011 8:00 AM
A woman in Missouri pleaded guilty last week to stealing nearly $140,000 while serving as the treasurer of a local church and its denomination’s local governing organization. According to a Kansas City-based news website, the woman wrote checks to...
April 19, 2011 8:00 AM
In the April edition of Church Finance Today, Richard Hammar previewed the possible repeal of the expanded 1099 reporting requirement included with the Patient Protection and Affordable Act (last year's health care reform legislation). The requirement would have required all...
April 18, 2011 8:56 AM
Editor's Note (September 29, 2011): A church business administrator in Colorado shared the following update regarding his church's application for this credit: "We submitted form 990-T claiming the credit (approximately $7,100) in late April. We received a request for more...
April 12, 2011 8:00 AM
The newest issue of Christianity Today poses an interesting question: Should Congress change pastors' housing allowances? Expect to hear a lot more on the topic in the weeks and months ahead. Since the conclusion of Sen. Charles Grassley's (R-Iowa)...
April 5, 2011 8:00 AM
One angle covered by secular media during the recent release of the 2011 State of the Plate survey results: The possible affects of a current "federal proposal to reduce tax deductions for charitable donations among wealthy Americans," as CNN.com reported...
March 28, 2011 8:00 AM
Question: Our church provides an auto allowance budget line item for vehicle expenses for our pastor. The pastor leases a vehicle that he uses for church-related business. He has asked to use the budget line for reimbursement of the...
March 10, 2011 8:00 AM
John Clemens with IRN USA Radio recently interviewed Matt Branaugh about Christianity Today International's National Church Compensation Survey. In this six-minute clip (which aired on more than 1,100 stations nationally), you'll hear more details about the importance of this survey,...
February 23, 2011 10:15 AM
Haven't started your federal taxes yet? As February fast draws to a close, you may be encouraged to know that you get an extra three days to work on 2010 filings. From this morning's Richard Hammar's Essential Reminders: "Taxpayers...
February 22, 2011 8:00 AM
We’re pleased to announce the launch of ChurchLawAndTax.com (formerly ChurchLawToday.com). We’ve given the site a fresh, new look to serve church leaders like you even better. You’ll find an updated Archives of the Church Law & Tax Report newsletter through...
February 17, 2011 8:00 AM
The "The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010," passed by Congress and signed by President Obama in mid-December, triggered a domino-like effect of changes for tax-filers--so much so that even the Internal Revenue Service...
February 10, 2011 11:00 AM
Looking for a helpful—and easy—way to remember federal payroll tax reporting requirements as a church? Check out this handy, printer-friendly PDF we've prepared titled "Ten Steps to Tax Reporting." Here's a sneak peek: 10) Complete Forms 1099-MISC and 1096....
January 18, 2011 8:00 AM
On December 17, Congress passed the "The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010." After President Obama signed it into law, numerous tax provisions that were about to expire were kept alive. And a significant benefit...
January 11, 2011 8:00 AM
Late in 2010, the United States Tax Court ruled a pastor could apply a housing allowance toward expenses incurred from a primary residence and a vacation home. What are the implications for church leaders? Well, while many may not own...
January 7, 2011 10:46 AM
Editor's Update (12/8/11): The Commission on Accountability and Policy for Religious Organizations is now taking public comments on the various issues it is studying. _________________________________ Editor's Update (4/27/2011): The ECFA has announced the initial members of its commission. The...
January 4, 2011 8:30 AM
Members of Congress passed a sizable tax-cut package late on December 17, and it barely hit President Obama’s desk the next day before he signed it into law. According to one media report, the package extends, adds, or modifies...
December 9, 2010 8:00 AM
In an upcoming issue of the Church Finance Today newsletter, senior editor Richard Hammar relays a comment made by Douglas Shulman, U.S. Commissioner for Internal Revenue, during a speech given earlier this fall to the American Institute of CPAs:...
December 2, 2010 8:00 AM
Michael Batts and Dan Busby, two members of our Editorial Advisory Board, will co-present a 60-minute webinar on Tuesday, December 7, about the ins and outs of year-end giving and receipts. Batts is managing partner with the CPA firm Batts...
October 26, 2010 8:00 AM
A majority of pastors believe churches should not publicly endorse political candidates, a new LifeWay Research survey shows. Phone interviews conducted randomly in early October with 1,000 church pastors, ministers, and priests revealed 70 percent strongly disagreed and 14...
March 2, 2010 8:00 AM
Here are the Internal Revenue Service's top 10 tips that will help your tax filing process “run smoother than ever this year.” 1. Start gathering your records. Round up any documents or forms you'll need when filing your taxes:...
December 22, 2009 9:00 AM
Ministers can prepare their own tax returns. While ministers’ taxes present several unique rules, these rules are not complex. Unfortunately, many people confuse uniqueness with complexity. With a little effort most ministers should be able to comprehend these rules sufficiently...
December 3, 2009 4:36 PM
The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning on Jan. 1, 2010, the standard mileage rates for...
