NEW UNRELATED BUSINESS INCOME TAX TO HIT CHURCHES

1/15/2019

NEW UNRELATED BUSINESS INCOME TAX TO HIT CHURCHES

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Pastor Smith was really excited about what the Church was doing for him in the way of additional benefits. He shared with me that not only did he and his staff have their own parking spots, but the Church Board just voted to provide him and the staff with a private parking garage. They felt this would be more conducive for the Pastor and staff so they could enter the building without having to brave the elements each Sunday—especially during inclement weather conditions.

I hated to do it, but I had to let the air out of Pastor Smith’s sail. In the recently passed in the Tax Cuts and Jobs Act of 2017, there was an obscure provision that would target business, including Churches, with a possible Unrelated Business Income Tax, if they provided parking spaces, including parking garages, to their staff.

The Obscure Code

This obscure provision” from the tax legislation appears to impose “a tax (the unrelated business income tax) of 21 percent on the value of free parking provided” by employers, including tax-exempt organizations like churches, to their employees through a newly added section 512(a)(7) of the tax code.

This may cost Churches and non-profit organizations millions of dollars in new tax liability.

Although many Legal and Accounting experts weighed in on this they could not agree as to how Churches would ultimately be affected.

Internal Revenue Service Weighs In

The IRS finally has weighed in on the topic and has issued some interim guidelines. For Churches to limit their tax liability the IRS has issued this statement:

A key part of this guidance is a special rule, enabling many employers to retroactively reduce the amount of their nondeductible parking expenses. Under this rule, employers will have until March 31, 2019, to change their parking arrangements to reduce or eliminate the number of parking spots they reserve for their employees.” Such a change made by a church or other employer will apply retroactively to Jan. 1, 2018, the agency said, possibly eliminating the need to file a Form 990-T.

By making this change, many churches, schools, hospitals and other tax-exempt organizations may be able to reduce their associated UBTI.

Why Churches Must Engage Us Now

If any Church had to pay a 21 percent tax on the fair market value of any reserved parking spaces or a parking garage for Pastor and staff, this could prove to be very expensive.

Chitwood & Chitwood has been navigating the troubled IRS waters for more than 80 years. We know how to get the best benefits for any Churches while operating within the legal frame work of IRS regulations.

This new tax change and others are covered in our Church Management and Tax Conferences across the USA. It would behoove every Pastor, Pastor’s Spouse, and Church Leader to attend the next available Conference. To register for the next Conference please visit us at www.cmtc.org or call 800-344-0076.

You cannot afford to function as a Church in this hostile IRS climate without the knowledge we will make available to you.

By Dr. Micheal Chitwood

What You Will Learn at our Conferences

Our Church Management Conferences will arm you with the information you must have to shield your Church or Ministry from IRS intrusiveness; teach you how to get your Taxes to the lowest possible rate; and daily operate your Church or Ministry within IRS acceptable guidelines.

Our Conferences have been taught across the Nation for over 48 years. Because of the Penalties, Fines, and even Imprisonment that the IRS imposed on many Churches and Pastors, Dr. Chitwood felt led by the Holy Spirit to become a buffer between Churches, Ministers, and the IRS.

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1/10/2019

Is The Person Managing Your Church Books Really Qualified

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During Church Management Conferences across the nation, I meet some of the most interesting, yet uninformed Church people in the USA. The same would hold true during a recent visit to Richmond Virginia.

During check-in Pastor Romero informed me that the only reason he was attending that day was so that his Certified Public Accountant (CPA) would attend and learn anything necessary to keep their Church books compliant. The Pastor was quick to inform me that he used the best CPA in the area and felt that the conference that day was probably a waste of time and money.

Expressions Say What Words Will Not

I thanked Pastor Romero and his CPA for attending and assured them that I could probably show them something they did not know.

Within the first few moments of the class, after taking care of necessary administration issues, I noticed Pastor Romero become more uncomfortable as the morning progressed. It was easy to see by the expressions on his face that their Church books were not as secure and compliant as he previously thought.

Things Come to a Head at Lunch

By the time I released the class for the lunch break, Pastor Romero and his CPA came to the table. The first words from the Pastor were addressed to the CPA as Pastor Romero thanked him for his hard work over the past 12 months, but that he and the Church would no longer need his services.

Pastor Romero retained us to bring his Church books into compliance and during the compliance process we discovered many errors that could have proven detrimental for the Pastor and the congregation.

Regardless of what people tell you or advertise to you, because they say they are an expert doesn’t mean they are.

Be Careful Who You Allow to Manage Your Church Books

There are many firms across the nation claiming they can do what we do. One has even advertised and deceived Pastors and Board members with an e-mail ad declaring the greatness of their firm. Unfortunately, this particular firm only began doing Church books in the past few months. This hardly qualifies them as experts!

Local CPA’s are great for small business bookkeeping tasks, but they are not specialists in the area of Church and non-profit. Church and non-profit bookkeeping is a unique specialty and demands only the elite in the field. This is where we come in.

Why You Need Us

Chitwood & Chitwood is the number one firm in the USA for Churches and non-profits. With more than 80 years of experience we know what others do not. In addition to our vast, exhaustive knowledge of Church and non-profit tax law, we have the highest reputation for being a winner. If we do your books and the IRS shows up, you don’t have to worry—we don’t lose.

Every Pastor and Church Leader must do two things immediately to ensure proper compliance and oversight of their Church books and records:

1. Attend the next available Church Management and Tax Seminar
2. Entrust Chitwood & Chitwood with your books and records

Don’t take a chance with those who say they are experts. Entrust your books with those who have proven to be the expert--Chitwood & Chitwood.

To register for the next available conference call 800-344-0076 or visit us online at www.cmtc.org. There are new tax laws that will drastically affect Churches this year. DO NOT DO MINISTRY THIS YEAR WITHOUT KNOWING THOSE CHANGES!

By Dr. Micheal Chitwood

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12/19/2018

New IRS Changes Every Church Must Know

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Pastor Jamison spoke with me concerning the Church Management Conferences scheduled for the upcoming year. During our conversation, he expressed that he didn’t believe he nor his Church needed to attend—especially since they were a small congregation.

Then I began to outline just a few of the new IRS changes that would negatively impact Churches and Pastors should they not be aware of them and take appropriate action to protect themselves. Once Pastor Jamison heard just a few of these, in depth, and the penalties he and the Church could be imposed, he registered immediately.

IRS Dangers that May Negatively Impact a Pastor

Since the Pastor is considered to be the ultimate Responsible Party for a Church, any violations and penalties incurred would first be levied against the Pastor. Some of these violations may be the result of the Church simply honoring their Pastor in simple ways.

For instance, most Churches love their Pastor. Unfortunately, I have reviewed cases where in their attempts to love and honor the Pastor, the Church action resulted in heavy financial penalties and in some cases, prison sentences for their man or woman of God.

The Simple Things

Most Churches have space specifically set aside for the Pastor. This would include things such as his or her office, a special chair on the platform or on the floor of the Sanctuary. Some Churches purchase towels for him or her to use during the service, and special bath towels to be used in the Pastor’s private bathroom.

One issue, that almost every Church practices is a special reserved parking space for the Pastor, Pastor’s spouse, Guest Speakers, and in some cases, Church Staff. I agree with all of these special items of recognition for the man or woman of God. However, the IRS does not.

Simple Methods of Honor Prove to be Very Costly

The IRS has unloaded a myriad of changes affecting Churches, Ministries, Pastors, and Ministers. Most of them are unfavorable. One of those changes involves reserved Parking Spaces.

Effective this year, individuals who are beneficiaries of reserved parking spaces and/or the Church will be required to pay income tax on those spaces. This will also mean that the Church will need to develop a comparable plan to determine a legitimate cost for the space and add it to the Pastor or Staff Member’s W-2 or to report it as Unrelated Business Income. Failure to properly report this could be construed as income tax evasion, fraud, or a few other charges which the IRS may choose to invoke.

THIS IS JUST ONE OF THE CHANGES FOR THIS YEAR—THERE ARE MANY MORE!!!

Why You Must Attend the Next Church Management Conference

Churches, Pastors, Ministers, and Board Members should not conduct any ministry in this upcoming year without first becoming aware of all the changes and what they should do about them.

Chitwood & Chitwood is the Premier Church Management Firm in the nation and will be conducting the Number 1 Church Management Conference in your area. DO NOT ALLOW THIS WINDOW TO PASS YOU BY.

To Protect yourself and your Church every Pastor, Pastor’s Spouse, and Board Member should register for the Conference in their area. Failure to do so, may cost you more than you want to pay. Let us inform you of some of these changes and how to protect your Church and Ministry. To Register for the Upcoming Conference Please Call 800-344-0076 or visit us online at www.cmtc.org. The Conferences this year are not ones you can afford to miss.

By Dr. Micheal Chitwood

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11/6/2018

Trusting the Board Lands Pastor in Hot Water

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During the Church Management Conference in Michigan, Pastor Hennessy was very adamant during the morning break. His frustration became anger the more he relayed the problem to me. Pastor had been the Senior Pastor for years and had received several invitations to attend our Church Management Conference. However, he never thought he needed to attend. In hopes of keeping his Church IRS compliant he would always send members of the Trustee Board and/or his Treasurer. The only problem was they did not take copious, detailed notes—they heard what they wanted to hear and relayed their version of the class to the Pastor.

Pastor Receives Dreadful News

Throughout the years Pastor Hennessy felt his Church was squeaky clean until he began receiving letters from the IRS concerning the Church. Within the first thirty minutes of class he knew what his Board and Treasurer had relayed to him was erroneous. THE PASTOR SHOULD HAVE ATTENDED OUR PREVIOUS CONFERENCES!!!

Scripture teaches us that there is safety in the multitude of counselors. The writer of Proverbs penned it in this manner: “Where no counsel is, the people fall: but in the multitude of counselors there is safety” (Pro. 11:14). Since Pastor Hennessy felt it unnecessary to attend, he really had no counsel and now he was on the verge of hefty fines and possibly more.

Why Every Pastor Should Attend

The IRS has a clause referred to as the “Responsible Party Provision Act.” This regulation lists those responsible for financial and criminal mistakes within a Church. The Pastor is the ultimate responsible party, and then the Board.

Unfortunately, those Pastors who feel they are too busy to attend one of these seminars are usually the ones who complain the most when they find themselves in “hot water” in regards to Church Finances and Church Compliance issues.

It is not that the Pastor shouldn’t be able to trust his or her Board in IRS Compliance matters, but since the Pastor is the one who is first targeted it seems wise counsel that he or she should attend. This doesn’t mean that he or she should attend in place of the Board—it means the Pastor should attend in addition to the Board.

You Get What You Inspect—Not What You Expect

It is imperative that the Pastor and as many Board Members are needed to make a viable decision, should attend every Church Management Conference near their area. Although the Board Member or Treasurer who attends the seminar may do their best to take sufficient notes and have sufficient understanding of the material taught, there is still safety in the multitude of counselors—one will hear something another did not hear. DO NOT DEPEND ON THE ADVICE OF JUST ONE ATTENDEE!!!

It is evident, since the Pastor will be the ultimate payer of the price exacted, he or she should attend so they may be able to reach a safe, reasonable decision as to what is needed for his or her Church.

Any Pastor too busy to attend a Church Management Tax Seminar will be the one targeted when the IRS shows up.

Who Should Attend

Every Pastor, Pastor’s Spouse, and all Board Members should attend any of our seminars in their area. As of this moment, not only are the Pastors and Board Members responsible for what happens with Church finances, according to Code Section 4958, should any Church money be misused (even if it is unintentional), the Pastor, the Pastor’s Spouse, and all Board Members and their Spouses are subject to a $10,000 fine.

If for no other reason, just to make sure you would not be assessed a $10,000 fine should be ample motivation to attend this next Church Management Conference.

Register NOW!!!

To register for the next Seminar, please call 800-344-0076 or visit us online at www.cmtc.org. YOU CANNOT AFFORD TO NOT ATTEND!!!

By Dr. Micheal Chitwood

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10/23/2018

We’re Coming

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I was at the registration table that morning of the Church Management Seminar in St. Louis Missouri. Pastor Elkins was the first one to check in and since the rush had not yet begun he decided to engage me in conversation. One of his first remarks to me was, “I don’t really believe our Church needs this because as a Church, the IRS will not bother us. I am only here because my Church Board insisted that I attend.”

As I listened to him, a gentleman who was attending a different conference in the room next to us approached the table. The gentleman asked what our conference was about and I informed him that it was a Clergy and Church Tax and Management Seminar. It was then he told Pastor Elkins and me that he used to Pastor a Church in West Virginia, and although he had the best CPA in town, the CPA could not stay abreast of Church and non-profit tax law. He then explained how he and his Church almost became a casualty of the IRS. When I asked him what happened, he didn’t tell either of us, but he did state that he then made the decision to leave the ministry and join the IRS as an Investigator—investigating Churches and non-profits.

Pastor Elkins Receives Shocking News

The former West Virginia Pastor then informed us that the meeting next door to ours was a Federal Marshall and IRS Criminal Investigator’s seminar. At that moment the former Pastor turned IRS investigator looked at Pastor Elkins and offered him this advice: “You better listen and heed everything that is taught in this Clergy and Church Tax Seminar because we are coming!”

Unfortunately Pastor Elkins’ shock did not end there. The class progressed throughout the morning and into the afternoon session as one of our seminars typically does. Right after the afternoon break, during the second round of the question and answer section, a gentleman who had been quiet for the whole class raised his hand to ask a question.

When I acknowledged him, he stood, gave the class his name, his Church name, Pastor’s name and then informed us that he had just been appointed as a Trustee in his Church. However, before he asked his question he revealed a shocking revelation—he was an IRS auditor for the for profit division of the IRS. When his Church made him a Trustee, he knew he needed to attend our seminar to discover what was required of a Church. I told him I appreciated him attending, but then what he said next shocked all of us. His words were, “The IRS is planning a huge push into Church and non-profit investigations and he could not afford for his Church to be one they investigated and it be out of compliance—especially with him (an IRS agent) on the Church Board.”

You Don’t Have the Luxury of Doing Nothing

With IRS investigations on the rise, especially in the last part of this year and the year approaching, what you do not know will hurt you tremendously. There are 45 new tax changes that can greatly affect a Church. If you do not know these changes and do not have them in place in your Church there will be some drastic consequences for the Pastor and Board.

The worst mistake a Pastor or Church Board can make is to assume their Church is IRS compliant. Even if your Church is compliant, you don’t have the luxury of assuming. You must attend the nearest Church Management Conference NOW! If your Church is compliant it is better to attend the conference and know for certain than to assume you are compliant and have the IRS assess penalties and possible criminal charges against the Pastor and Board. “AN OUNCE OF PREVENTION IS WORTH A POUND OF CURE.”

We Are Coming to a Location Near You

It is imperative that every Pastor and Board Member go to www.cmtc.org or call 800-344-0076 immediately to locate the conference nearest them and register. Two IRS agents on the same day in St. Louis, MO said the exact same thing: “You better be ready—We are coming.”

As the Number One Church and Clergy Tax and Management firm in the nation, we know what others do not. If you will do that which we suggest, the IRS will never be a worry to you or your Church. Go online or call now to register. The livelihood of the Pastor, the Church Board, and the Church depend upon it!

By Dr. Micheal Chitwood

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10/11/2018

How Bad Do You Want It?

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Pastor Franklin seemed frustrated and anxious during the Church Management Seminar in Dallas. It was easy to conclude that he would find his way to me during the lunch break. As he approached, I stopped the other task I was completing in hopes I could calm any fears or help find a solution to his apparent dilemma. He told me he was on the verge of a nervous breakdown. Pastor Franklin’s issue is one faced by many Pastors across the USA--more ministry than money to fund it. Some Pastors mistakenly assume that just because they have a vision God will ensure the funds will be available. God will fund His real Kingdom vision, but it probably won’t be from tithes and offerings. Therefore, Pastors must pursue other avenues and fund raisers are not the answer.

As I travel the nation teaching Church Management Seminars, I am amazed at the number of Churches that must rely on some type of fund-raising to properly fund their ministries. As the Body of our Lord and Savior, Churches should never be short of funds to do that which God has called them. However, hundreds of Church doors are padlocked every month across the USA due to foreclosure, or Church closure. The culprit―there are not enough funds to pay the bills and do ministry.

Two Causes

The two main causes for insufficient budgets are simple to diagnose. They are:

1. The Church may be taking on more ministry than that which God has called them.

2. Unfaithful tithers.

Either of these two will sink a Church. No one wants to buy a ticket on the “Titanic.” The Titanic was considered unsinkable, but it sank. Some consider the local Church unsinkable, but hundreds close their doors every day. Don’t be one of them.

When Churches are always begging for money or overburdening the members to volunteer for countless fund-raisers, people get discouraged and look for an out. At this point, some will quit attending Church, while others will find another place to worship.

Let’s look at each cause closely.

Too Much Ministry

This seems like an oxymoron. How can a Church do too much ministry? Even though we all are to evangelize and win people to Christ, we need to understand that God calls certain Pastors for certain areas. For example, if your Church only seats 100 people, God probably has not called it to sponsor large drama productions. Another example, if you have 30 people in attendance on a given Sunday, your Church probably has not been called to buy 5 buses and start a bus ministry. How can a Church feed the hungry, when its members can barely feed themselves?

As noble as the above-mentioned ministries are, and many more that we don’t have space to name, we each have a ministry niche that is unique to the Pastor, members, and location.

Competition among Churches pressures Pastors to attempt ministry that others are successfully engaging. We must learn to stay in our lane! Find that to which God has called you and refine it until it is the best in your city.

If you are engaging in that which you are not called, there will be a shortage of funds. When this happens, Pastors begin to manipulate the members to give more, or resort to a myriad of fund-raisers in attempts to “keep up with the Joneses.”

Insufficient Revenue

There should be ample funds within any Church to function according to God’s plan for that House of Worship. God does not demand that which He will not fund. If the Pastor is sure that God has called his or her Church to an area of ministry, then the money is in the House; which leads to the second problem – unfaithful tithers.

Less than 5 percent of Christians tithe, even though the tithing principle is adamantly displayed throughout Scripture – Old and New Testament.

Before we are too harsh on non-tithing Christians we should look at the pulpit. According to one survey, less than four percent of Pastors and Ministers tithe. If insufficient tithes and offerings are coming into your Church each month, maybe the Board Members need to check the Pastor’s tithing record. If the Pastor curses himself or herself by not tithing, as the spiritual head of that Church, the Church will be cursed. If the Pastor is a faithful tither then he or she should properly teach this subject to his Church – at least four or five weeks per year. We get what we preach. If we constantly preach soul-winning, we have soul-winners. Preach tithing and you will get tithers.

One thing the Pastor can do to get members to tithe is to properly teach the subject and then offer some type of commitment card with a “God-Guarantee” based on Malachi 3. Get the members to put God to the test – to tithe for 90 days, and if at the end of that time, tithing has caused a proven, undue hardship for the member, give him or her, a refund. God’s Word is either true or it isn’t.

I need to throw a caution in here about the refund. Offer it at the beginning of each year as a teaching on Stewardship. Do not give a refund, if you have given the member a Giving Statement and they have claimed the donation on their tax return. This could create IRS issues!

I know of several Churches that have utilized the God-Guarantee approach, and only know of one that has actually had members ask for a refund – and in that Church it was less than half of one percent. The good news is that each time it is taught, the Church gains new tithers. But, until you can train Christians to become tithers, you still need money.

How We Can Help

There is plenty of money to fund our visions if we know where to look. Chitwood & Chitwood knows of funding sources others do not know. We know where the money is and how to get it. The question is: “How Bad Do You Want It?” Are you willing to “roll up your sleeves” and go get it?

As one of the largest Church resource firms in the nation, Chitwood & Chitwood knows how to increase your tithes and offerings. Our system, How to Make Your Tithes Start, Stay, and Grow, provides Biblical resources and strategies to teach your members the importance of the tithe.

Call us at 800-344-0076 to purchase your system, or contact us at www.cmtc.org to register to attend a Church Management Conference in a city nearest you. You will be glad you did. Remember, for us “It is A Ministry – Not A Job!”

By Dr. Michael Chitwood

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9/27/2018

Called and Educated, but Unprepared

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Jack has faithfully served God for years. It was no surprise to those who knew him when he felt God had called him to become a Pastor. Jack thought he should attend Bible College to properly prepare for the new role God had placed upon him.

After graduating with a Bachelors degree in Ministry, Jack accepted the role of Senior Pastor in a little country Church in the Midwest. All was fine until the first Board Meeting. Nothing he learned in Bible College prepared him for the hostilities that would arise in that meeting. That is when Jack turned to us—the number one Church Management firm in the USA. We knew the dilemma with which he struggled and offered the necessary solutions to his problems.

Just like Jack, when a Christian enters the ministry he or she feels the necessity to prepare for God’s Call spiritually and educationally. To fulfill the later many attend a Bible College or Seminary. After all, a Pastor should be prepared for the demands that ministry places upon him or her. With Degrees in Bible and Theology, you would think they would be prepared for ministry.

Unfortunately, most Pastors are in the same category. Bible College teaches all of the “ologies,” i.e. Angelology, Eschatology, Soteriology, etc. but not the things a Pastor needs. All of those are great, but Bible Colleges and Seminaries need to develop a class in “Pastorology.” Most Pastors leave Bible College to enter pulpits across America, but have no idea as to how to conduct a Board Meeting.

The Pastor as the CEO

The Pastor of a Church is automatically considered as the CEO of that organization, yet many have no clue what it entails. Not only do the Pastors have no clue, the Church Board will often withhold that power from him or her.

No, large business would think of voting in a CEO without vetting the credentials of the new officer. Yet, most new Pastors step into Pastoral positions unequipped to manage and operate a Church. For me, it was only after I was a Pastor for a week, that I realized the spiritual training I had received, was insufficient for day-to-day Church operation. Church is about 10 % spiritual, and 90 % administration.
Pastors in these situations are then shaped by Board Members who usually have no clue as to the proper way to run a Church. The same irregularities that have been present in that Church for years, have now been implanted into this next level of Ministry via the Board to the new Pastor.

There is Help

If you are a Pastor that has not received proper legal and administrative training to operate the Church you Pastor, you need our help. We are the specialists in Church Management. We know things others do not know. It is not what you know that will hurt you—it is what you don’t know.

In our Church Management and Clergy Conferences, we keep Pastors and Church Leaders abreast of all of the new regulations and updates to keep the Church compliant. We also have the training to show Pastors how to properly conduct Board Meetings.

The question becomes, “Do you want to stay where you are—in administrative error, or do you want to get your Church in Government and administrative compliance?” Please understand that God does not bless a mess. The reason your Church struggles could be because your Church is out of order.

Every Pastor and Church Leader should contact us today to register for the next Church Management and Clergy Conference in a city nearest you. To register, please call 800-344-0076 or visit us at www.cmtc.org.

For us, this is “A Ministry—Not a Job!”

By Dr. Michael Chitwood

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9/18/2018

Is Improper Stewardship Hindering Your Church Growth

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Pastor Smith asked to speak privately with me during the lunch break during a recent Church Management and Tax Seminar. Once all of the class left the room for lunch he began to tell me a story I have heard often in the 46 years of teaching these seminars. He confessed that his Church was committing serious violations, and needed our help but his Church of 20 years was a small congregation and could not afford the funds to retain us. It was then I told him that which he probably did not want to hear.

I began to share with him the parable of the talents in the 25th Chapter of Matthew. The Master did not give each of the three stewards the same amount—He gave to them based upon their proven ability of what they could handle and manage. I then told Pastor Smith that God probably would not allow him to get any larger because he had a proven track record of mismanaging that which God had sent him—i.e. his Church in financial disorder and serious IRS violations. I then asked him to justify why God should give him more people and more money. His words were, “If God would grow my Church numerically and financially I would get our Church in order.” Unfortunately, for him, God doesn’t operate that way. The principle is the same as that of tithing. Many people use an excuse that they cannot afford to tithe, but want the Pastor to pray they will win the Lottery, and if they do, they will give the Church a big tithe check. That doesn’t happen. If someone can’t give God $20 on a $200 paycheck they wouldn’t give tithe ten million dollars if they won a hundred million.

Life Demands that We All Pay—It is Only a Matter of When

Scripture reminds us that if we cannot be trusted in the small things we cannot be trusted with that which is larger. Pastor Smith had to choose—Sacrifice now, get his Church in order so God could bless it or continue on the same path he had been for 20 years. To his credit he made the right choice. Pastor Smith’s dilemma reminded me of the old commercial on TV.

Many years ago there was an oil filter commercial that used the statement: “You can pay me now or you can pay me later.” The theme was that if you got the oil changed regularly in your automobile and used the Fram oil filter, it would save you major repair bills later. The premise being that it was much cheaper to pay $15.00 for an oil change and new oil filter than to pay hundreds of dollars for major engine repairs.

The Same Rule Applies to Your Church

The Internal Revenue Service is changing rules and regulations daily and most Churches have no clue as to how the new regulations and laws affect them. Would it not be better for a Church to spend a couple of hundred dollars each year to learn the changes and stay in compliance than it would be for the IRS to show up at your door and your Church be penalized thousands of dollars and possible prison time for the Pastor and Church Leaders?

Unfortunately, most Churches would rather “roll the dice,” save a couple of hundred dollars, and pray that the IRS does not catch them in their violations. The Apostle Paul admonished Christians to obey the laws of the land in Romans 13:1-6, yet many Churches purposely and knowingly violate IRS regulations every week.

God Cannot Bless A Mess

If God sanctioned or blessed something that was illegal, He would be less than God. I understand that Apostle Peter said, “We ought to obey God rather than man,” but that statement only applies when the laws of the land violate or contradict God’s Word. Nothing in the IRS code violates or contradicts God’s Word. Therefore we are commanded to obey those regulations or we are in rebellion to Scripture.

When the Children of Israel went to war with the city of Ai they were soundly defeated. Their demise was attributed solely to one man violating God’s command. Everyone was told to touch nothing in the city of Jericho because God commanded that everything in that city be destroyed. Achan took a wedge of gold and a Babylonian garment. His rebellion was considered by God as if the whole nation rebelled. Innocent men of Israel died in the battle of Ai simply because one man thought he could disobey God and no one would ever know.

Pastors and Church Leaders, how many people in your congregation are suffering because you did not feel it necessary to obey God’s Word which demands that you obey the laws of the land? All of those IRS violations that are committed in your Church every week are not unnoticed by God. Could it be that your Church and many in your Church are struggling because you feel that no one will know you are operating against the laws of the land?

We Can Help

Chitwood & Chitwood is the premier Church and Clergy tax expert in the nation. We are experts on the IRS and even know many of the laws before they are released to the public. Every year we crisscross this nation teaching Church and Clergy tax seminars to keep Churches abreast of IRS regulations. To attend one of these seminars is $99.00 plus a workbook.

At these conferences you will be shown how we can get your Church in compliance with the latest IRS laws and bring it into proper financial order. God demanded good stewardship in Scripture. No Church is a good steward of God’s money when they purposely refuse to learn the IRS regulations which apply to a Church, the Pastor, and Church Leaders. Could it be this is why so many churches seldom exceed 70 in attendance? Could this be the cause as to why so many churches struggle financially?

I would encourage every Pastor and Church Leader to attend the next Church Management and Tax Conference closest to their location. To register, call 800-344-0076 or visit our website at www.cmtc.org. Everyone pays; it is just a matter of when. You will pay a small amount to learn the new IRS regulations and how to get your church in compliance, or you will pay heftily in the form of IRS penalties, including possible prison time.

Act now. Once they show up at your door it is too late.

By Dr. Michael Chitwood

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9/11/2018

Pastor Can’t Cope with the Pressure

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I was troubled, but not shocked, by the news I received last night. Another Pastor, whose name I will withhold due to the pain the family is suffering, ended his life. The cause of death was listed as self-inflicted.

This 30 year old Pastor had a thriving Church, a beautiful family, and Church members who adored him. Although some recognized his emotional trouble, apparently no one knew how to properly assist him through the journey so he could conquer it and use it as a testimony to others.

A Common Occurrence

Pastors are among the most depressed and most burned out employment group in the USA. They walk a fine line between their spiritual life and their human, personal life. They must be appear outgoing and friendly with members and those whom they hope will attend their Church, but also must maintain a spiritual life acceptable to God. A Church attendee may tell a joke that is slightly off color, expecting the Pastor to laugh, but at the same time it may be unacceptable to the Holy Spirit.

The Pastor’s family is usually held to a higher standard than other Church members. This inequality pits the Pastor against protecting the rights of his family while maintaining a certain standard visible to his Congregation.

Another Factor

Issues the Pastor confronts with Church Members who want to live below the Church’s Biblical standards, but still want to be leaders in the Church, and disgruntled Board Members who did not get their way in the Board Meeting are things the Pastor must keep locked within the confines of his soul. Pastors keep these and many other issues from their spouse for fear the spouse will unload on the Church or Board Member.

The Pastor’s spouse is expected to be nice to those in the Church when the spouse would probably rather take them out behind the Church and beat some sense into them.

The stress of trying to keep Church Members content so they will continue to attend and tithe while trying to be supportive of his spouse and children often places the Pastor in a lose-lose situation. If the Pastor wins with the Member, he or she often loses with his or her own spouse or children.

Pastor’s Wife Leaves Rather than Fight with Husband

Pastor Brown sat in his chair on the platform during that Sunday Morning service. His wife’s routine usually had her arriving to Church at 10-15 minutes after the start of the morning service. This kept her from having to contend with the gossip and backbiting among Church members.

This Sunday she was later than usual. Service had been going for about 30 minutes and still no sign of the First Lady. Praise and Worship would be finished in about 10 minutes and out of concern, Pastor sent his Head Deacon and his wife to see what could possibly be wrong. Pastor had the Music Pastor continue Praise and Worship for another 20 minutes. By then the Deacon and his wife returned, but the look on their faces did not paint a pretty scenario.

They called the Pastor out of the Sanctuary to give him the bad news and the note from the First Lady. They told the Pastor that his home had been emptied of its furniture and they found the note from the First Lady which read: “I cannot handle the pressure placed upon me as a Pastor’s Wife nor can I handle you walking a tight rope trying to please me or please your congregation. Please do not look for me. You will be hearing from my attorney soon. I wish you all the best.”

The Loneliest Position on the Planet

The Pastor to which I referred to open this Blog committed suicide. The Pastor, to which I just referred, lost his family. Neither scenario is pretty.

A Pastor usually walks alone in the city in which he or she pastors. Some Pastors have friends in other locations with which he or she “can let their hair down” without it posing any negative consequences to his or her Ministry. Unfortunately, most do not have that option.

Therefore, the Pastor walks alone—at least in the natural realm.

Why You Need Us

Every Pastor should become connected to The International Congress of Churches and Ministers (ICCM), and should attend the next Church Management Conference closest to your location.

With more than 80 years of experience providing oversight to Ministers and Churches we are the safety net which Pastors can fall upon when the stress and struggles of Ministry become unbearable. No Pastor should ever entertain the thoughts of suicide or the attacks of depression. You Do Not Have to Go it Alone! We are here for you.

Even though you may be ordained through another organization you can connect with us by calling 800-854-5891 or visit us online at www.iccmworldwide.org. We encourage every Pastor to register for the next Church Management Conference by calling 800-344-0076 or registering online at www.cmtc.org.

DO NOT ALLOW THE ATTACK OF LONELINESS OR DEPRESSION DESTROY WHAT GOD HAS CALLED YOU TO—WE ARE HERE FOR YOU!

By Dr. Michael Chitwood

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9/6/2018

Pastor Taxed on Salary He Did Not Accept

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Speaking with Pastor Simpson during the break, he informed me no one in his Church received a salary, including him. Therefore, some of the information in the class did not apply to him. I asked him if the Church had ever offered him a salary, to which he replied, “Yes, but I refused it.” Questioning him further on this I realized he could be in serious trouble because of a little known Treasury Regulation.

I informed Pastor Simpson that the IRS may very well tax him on the compensation he turned down. This information shocked the Pastor in such a manner he became very anxious. Then I explained why.

It was only a few months later that Pastor Simpson relayed the news of which I was concerned he would hear. He had to pay taxes on the income he had turned down and was hit with additional penalties and interest.

What Pastor Did Not Know Hurt Him

There are thousands of pages of Internal Revenue Service regulations that pertain to Churches. I do not know of any Church Treasurer that is aware of everything written in the statutes that apply to their tax exempt status. Most Church Clerks do not know one law that compiles Church tax law, much less all 277.

Buried in those thousands of pages is a clause known as Treasury Regulation CFR 1.451-2(a) which is known as Constructive Receipt of Income. This regulation allows the IRS to tax income, even if it was not received by a Pastor.

What the Statute Means

The basic premise of this statute is this:

“Income although not actually reduced to a taxpayer’s possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it during the taxable year if notice of intention to withdraw had been given.”

This means that any income refused by the Pastor is taxable if it meets any of these three stipulations.

1. If the money has been set aside for the Pastor.

2. If it is credited to the Pastor’s account.

3. If it is otherwise made available to the Pastor, but he or she refuses it.

The Pastor’s “Church Comes First” Mind-Set May Prove Costly

As I travel across the nation teaching Church Management and Tax Conferences I constantly encounter Pastors who will not accept salary from their Church simply because they are in the growth process and they are willing to make the sacrifice to see their Church improve.

As oversight for thousands of Churches in the USA, I understand the Pastor’s heart. However, no Pastor should be so humble as to place themselves and their families in unknown financial peril.

Necessary Precautions

Any Pastor who chooses not to accept a salary must make sure he or she does so with these guidelines in place if he or she wishes to avoid taxation from the IRS.

1. Make certain that any income you refuse is not made available for you to draw upon at any time.

2. Make sure that any income you refuse does not go toward something that would benefit you or your family in the future.

3. Be certain that any income you refuse is not credited to your account now, or in the future.

4. Make certain that your decision is properly recorded in Board Meeting Minutes prior to you refusing the income.

Why You Need Us

These and other vital tax issues are taught in our weekly Church Management Tax Conferences all across the USA. Our 80 years of experience and knowledge make us the premier Church Management firm in the Nation.

Every Pastor and Church Leader should make it their number one priority to attend the nearest conference immediately. Your procrastination may prove to be your demise. Visit us at www.cmtc.org or call 800-344-0076 to register. You and the safety of your Church are not guaranteed tomorrow.

Remember, for others it is a job, but for us “It is A Ministry!”

By Dr. Michael Chitwood

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A Common Occurrence

Another Factor

Pastor’s Wife Leaves Rather than Fight with Husband

The Loneliest Position on the Planet

Why You Need Us

By Dr. Michael Chitwood

What You Will Learn at our Conferences

What Pastor Did Not Know Hurt Him

What the Statute Means

The Pastor’s “Church Comes First” Mind-Set May Prove Costly

Necessary Precautions

Why You Need Us

By Dr. Michael Chitwood

What You Will Learn at our Conferences

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Expressions Say What Words Will Not

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