Tax & Legal Issues in the Church
From Bill Minchin at the Acts 29 2006 Troy, NY Boot Camp
Reference Materials
- Church and Clergy Tax Handbook by Richard Hammer
- National Association of Church Business Administration
- Includes compensation data
- Evangelical Council for Financial Accountability
- National Sex Offender Registry
- VolunteerSelect
Guiding “Theology”
- We live in a litigious society and the church is not immune from that
- God has placed us in positions of responsibility and has called us to be faithful stewards
- Therefore, we should give proper attention to the corporate side of the church
Misc
- Make sure that sub-contracting vendors have adequate insurance
- Liability ($1 million)
- Have vendor name you as “additional insured”. Makes the vendors insurance primary and yours secondary
- Exempt and non-exempt employees
- To be classified as exempt, making over $26k, pass duties test
- Non-exempt gets minimum wage and overtime
- simply paying an employee on a salary basis doesn’t automatically make them exempt
- Non-exempt cannot volunteer to perform the same duties for which they are paid
- Non-exempt should document hours on a daily basis
Sexual Abuse Prevention Policy
- Written application
- Interview
- Institutional reference
- Six month rule (need to be member six months before serving)
- Two Adult Rule
- Maybe Criminal Background Test (VolunteerSelect)
15 Passenger Vans – 1o Point NHTSA bulletin
Gross Negligence
- Board members can’t be sued for normal negligence
- Can be sued for gross negligence
- 15 Passenger Vans (no safety measures)
- Sexual Abuse (no screening)
Tax Issues
- Housing allowance is tax exempt
- Must be recorded in official board minutes
- Must be done every year and is NOT retroactive
- Employee vs. independent contractor
- IC – worker who contracts to do work using his/her own methods and is only supervised as to end product
- 3 different tests (in Hammer’s book)
- Tax deductibility for contributions
- Must be a gift of cash or property
- Services are NEVER deductible
- Contribution must be unconditional and without personal benefit
- Contribution must be made to organization or for the use of the organization
- IRS wants to see “Full administrative and accounting control to use gift consistent with churches mission and purpose”