What Gives Government The Right

“Serving Those Who Serve Churches”

 

 

What Gives Government Right

 

What Gives The Government The Right To Involve Itself In Church Affairs?

A professional exposition based on 25 plus years of serving churches and clergy in the area of statutory compliance with the federal and state governments.

When the question was posed to seminar audiences of why they think the government is cracking down on churches, the answers were varied.

I.e.: “Jim Bakker caused this to happen” OR “Jimmy Swaggart exposed the church”; OR “the IRS needs money.” “The IRS is greedy.” “The IRS targets big churches because of TV ministries”.

What was prevalent in all of the answers was a total lack of understanding of the role of compliance oversight the government can (and recently in the history of the church) levy against the church as a legal organization.

As a business consultant specializing in accounting and taxes, I understand governance of legal entities. However, when interacting with church officers (mainly African American). I learned there was little to no understanding of the relationship between the governing bodies that were used to form the church and the very legal entity they called “church”.

I began a quest to understand this extreme “gap” in the reality of the government’s role in the process. I heard one pastor say “put the bylaws in place, hide them under the altar and let’s have church”. Meaning, let’s do what is legally required to organize but operate in a traditional sense. Like “out of sight, out of mind”.

Now, in defense of the church, they had no way of knowing there are aspects of church administration governed by regulatory agencies. The church is income tax exempt and has no annual government reporting responsibility (unlike other non-profits).

When the question was posed to churches about the meaning of separation of church and state, it was consistent. That the government should not have any jurisdiction over the operation of the church whatsoever. After all, there is separation of church and state”

The Word of God says” My people are destroyed for a lack of knowledge”. Regarding churches and government compliance, this is quite applicable. Churches do not realize that the very governing body that is used to legally organize and support church operations would be subject to some oversight. i.e.:​

  • The state government issues the organizing document
  • The IRS issues the federal ID number
  • The state government issues sales tax exemption
  • The local government exempts churches from property tax
  • The federal government allows charitable contributions as a tax deduction
  • The federal (and some state) governments exempt the clergy housing allowance from inncome tax.
    Church income is non-reportable and tax exempt.
  • The IRS (Exempt Organization Division) awards the federal letter of determination (better known as the 501{c} {3}.
  • Church community development organizations receive federal grants to carry out church outreach ministries, etc., etc., etc.

This is just a partial list of the most common benefits churches are familiar with.

The biggest area of noncompliance churches experience is the reporting of payments for services rendered, such as pastoral compensation and benefits, church worker payments, and others who serve the church. In defence of the church, historically there was no attention paid to these “stipends” or “love offerings” as they were traditionally called until 1985 when Congress made these payments subject to social security and Medicare.

Serving Those That Serve Churches

Church Administration Resources

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