Penalties are being assessed personally
against Church Officers. Find out how you can protect yourself!
Recently, the IRS assessed penalties of $230,445.00 on EACH of
the officers of a church-controlled organization for failing to comply
with IRS laws regarding employees. Congress has now added an entire section
to the tax code dealing exclusively with church tax inquiries and examinations.
We are finding that a large number of ministers and churches are relying
on incorrect and outdated advice.
1st Circuit Court ordered Church to return donations to members.
The Bible Speaks Church was required to return $5.5 million to parishioners
in a court ruling. The court ruled there had been private inurement and
undue influence. How do you solicit funds for your church? (The Bible
Speaks, 869F.2d 628/1st Cir. cert. filed, 57 U.S.L.W. 3814/U.S./No. 88-1977)
IRS Takes Church's Tax-Exempt Status
Church is Ordered to Sell Assets To Pay Penalties!
Recently, a church lost its tax-exempt status when its officials simply
could not answer IRS questions on its financial affairs.
Does your church have the answers? The IRS has adopted new
procedures for auditing the books and records of a church.
Churches are not automatically exempt - You Must
File! Tax-exempt status is not a constitutional right. It
is an act of "legislative grace," and the IRS has the responsibility
to police this powerful status.
The IRS is granted by Congress the power to enforce the
law. In order to identify and take action against individuals using the
tax-exempt status unlawfully, the IRS has limited rights to examine any
church's books.
Legal requirements of a tax-exempt organization are far
greater than for other organizations.
Every pastor in America should take a closer look
at the laws affecting their church.
Criminal Penalties If your Church conducts improper Anniversary
Love Offerings, your pastor could now be subject to Criminal Prosecution.
CRIMINAL TAX EVASION
The elements of the crime are willfulness, an attempt
to evade tax and additional tax due. (Code Sec. 7201)
CRIMINAL PENALTY FOR FALSE OR FRAUDULENT TAX ADVICE
Any person who willfully aids or assists in, procures,
counsels or advises the procreation or presentation of materially false
or fraudulent return, affidavit, claim or other document, is guilty
of a felony. (Code Sec. 7206(2)
OTHER CRIMINAL PENALTIES (fines and/or
imprisonment) are imposed for:
- willful failure to file a return; (Code Sec. 7203);
- willful filing of a false or fraudulent return; (Code Sec. 7207);
- willful failure to pay a tax; (Code Sec. 7203);
- willful failure to collect or pay over a tax (where under a duty to
do so); (Code Sec. 7202);
- willful failure to furnish a W-2 to employees in the manner, at the
time or with the information required, or willful
filing of a false or fraudulent W-2; (Code Sec. 7204);
- willful failure to keep proper records; (Code Sec. 7203);
- willful failure to supply tax information; (Code Sec. 7203);
- willful failure to obey a summons; (Code Sec. 7210);
improper disclosure or use of tax return information
by a tax return preparer; (Code Sec. 7216);
various other offenses relating to returns, statement
stamp taxes, etc.
IRS Seizes Church: Board Members May Be Penalized Indianapolis -----
A church that challenged the authority of the IRS was seized
by the government on Tuesday to satisfy a $6 million tax debt, with federal
marshals wheeling out the former pastor on a gurney as he prayed in protest.
"I pray for you that God will forgive you!" shouted
the Rev. Greg J. Dixon, past emeritus of the Indianapolis Baptist Temple.
"Welcome to communism, America."
Five church members were inside when 85 federal marshals
arrived, supported by 70 city police officers. No one was hurt or arrested,
though some church supporters had to be carried out, among them Dixon.
"To have the IRS come in and seize the church's property,
that is an extraordinary event unparalleled in American history. In fact,
if the IRS doesn't collect 6 million dollars for the sale of the assets,
code section 6672 allows the IRS to penalize each one of the responsible
board members. We certainly have not heard the last of this yet. I hope
those board members have the proper legal protection."
