Trusting the Board Lands Pastor in Hot Water

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

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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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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9/4/2018

Ready or Not—Here They Come

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Pastor Samuel told me that he did not need our services simply because he never worried about IRS (Internal Revenue Service) intrusion into his Church affairs. He was sure the IRS could not investigate him unless the head of the Internal Revenue Service or some higher official approved such action. All of his thinking abruptly changed.

When I received his panic, anxiety-laced call I knew he was in deep trouble and that it may be too late for us to help him avoid that which was about to happen. Needless to say, things did not end well for this Pastor.

Three Words Which Strike Fear in the Hearts of the Hearers

I don’t know of any letters or words that strike fear in the heart of individuals like the three dreaded letters, IRS. It is probably only second to the word “cancer.”

Many Churches feel as if they never have to worry about a visit from the IRS. That used to be almost true. In years past, before the IRS could perform an audit on a Church, the Internal Revenue Service had to follow guidelines outlined in Section 7611. That section of the IRS code required “an appropriate high-level Treasury official” to approve a tax inquiry on a Church. Those days are gone forever.

If a Church is audited after the 7611 wall is successfully maneuvered, there is no hope of appeal for that house of worship.

Church audits are up over 50% from the past year and the statistics are changing daily. The reason for the increase is because the IRS is gradually eroding the 7611 audit threshold. This is due to the addition of the Affordable Care Act to IRS oversight and the ability to perform Employment Tax (941) audits.

Many Pastors’ Heads Are in the Sand

While conducting a recent Church Management Tax Conference, an African-American Pastor politely informed me that his and other African-American Churches did not have to worry about the IRS because the President had assured them that he was their friend and would protect them from infringement into their records. The only problem is, that for the past 7 years there has been a steady increase in the number of Churches audited, and a majority of those have been in African-American places of worship.

Just a few weeks prior to this blog, I sat with a Pastor that arrogantly told me his Church books and records were in order because he had a former H & R Block tax expert managing the financial records of the Church. Upon asking a few simple questions of the Church bookkeeper it was evident that they were far from IRS compliance, and yet the Pastor continues to feel as if he is exempt from IRS Scrutiny.

Internal Revenue Service Actions

Due to the Affordable Care Act (ACA), the IRS is now performing random, on-site audits of Churches. In performance of those audits, 941 Employment Tax audits become “fair game” for the auditor. 7611 requirements are non-existent for ACA and 941 audits.

In performance of those audits, the auditor may seek to view the facility and may ask questions. Anything that ignites suspicion during the audit or walk through will flag a more in-depth review, which usually creates some problems for that Church.

The last thing any Church needs is to be bogged down in an IRS audit. Not only is it stressful, it may provide serious criminal and civil ramifications for the Church.

What You Need to do Immediately

Every Pastor and Church Leader should contact our office, Chitwood & Chitwood, to schedule an on-site compliance audit immediately. If the Church cannot afford an on-site audit, its Leaders (including the Sr. Pastor) should register and attend the soonest and nearest Church Management Tax Conference to learn how to get compliant and retain our services via a discounted system.

There is absolutely no time to loose or waste. Every Pastor and Church Leader should immediately call 800-344-0076 or visit us at www.cmtc.org to register. We have a conference near you. It will be the best day you have ever invested in for your Church and Ministry.

Remember, for others this is an occupation, for us “It is A Ministry—Not A Job!”

By Dr. Michael Chitwood

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8/29/2018

Deacons’ Wives Shocked to Learn they Owe the IRS

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Deacon Franklin called me and by the tone of his voice I knew he was at his wits’ end. When I calmed him down enough to where I could understand his concerns, I knew he and his Church had fallen victim to Treasury Regulation 53.4958. It seemed that the Pastor and Board had mistakenly misused Church funds and someone reported them to the IRS.

Although that is a horrible regulation to violate, it would not have been so bad if the IRS had only penalized the Church to a fine. Unfortunately the latest amendment to that regulation allows further penalties. Each Board Member and their spouses (including the Pastor and his spouse) were being fined $10,000.00. Imagine the shock of the Board Members’ spouses when they discovered they too were targets of the IRS.

Should the money have been misused? No, but it seems the Government has vastly extended its reach into the areas of Christianity and Churches. There used to be a time in recent Church history when people attended Church without worries of intrusion from the Federal Government and especially the Internal Revenue Service (IRS). Church members were eager to serve on Church Boards and during Church activities. Those days are gone!

The IRS Extends Their Reach

We understand accountability and the necessity of obeying the laws of our great nation. No one wants to be part of an anarchist society. Should laws be violated there should and will be consequences—even to a Church. In years past that burden fell upon the Pastor or the Board Members. Things have changed.

What if the IRS thought that holding the Pastor or Board Members (Church Leaders) accountable for wrong-doing, was not enough? What if the IRS determined others in the Church should also be punished?

Brace yourself. That is exactly what has happened.

Family Members of the Church Board May Now be Penalized

According to recent changes in Treasury Regulations, the IRS is now allowed to not only fine officers of the Church, but the reach now extends to their family members. You read it correctly. According to Treasury Regulation 53.4958, the IRS now has legal authority to fine Church officials and their family members severally. This means that the IRS can consider the family members just as guilty as the Board Members.

This regulation allows the IRS to fine the Church Officials and their individual family members up to $10,000.00 for misuse of Church funds. Although a stretch, that might be acceptable if the misuse was intentional. However, according to the regulation, it also applies even if the misuse was unintentional. That’s right—for a simple mistake every Church Official and their individual family members could be penalized.

This means that a Church Official with a spouse and 4 children could be assessed as much as $60,000.00 for that unintentional violation.

Why You Need Us!

No Church Official should have to worry if their actions (as noble as they may be) are subject to this type of IRS intrusion. This is why Chitwood & Chitwood should be providing appropriate oversight for your Church. We know how to protect all Church Officials.

With more than 80 years of experience in Church Management, we know what others do not. The expertise of our staff will ensure that your Church, staff, and volunteers are protected. We will keep your Church annually compliant and your officials up-to-date on all changes that could be a detriment to your ministry.

It is imperative that every Pastor and Church Official attend the nearest Church Management Conference. At these conferences we show you how to make compliance easy for everyone.

To register for an upcoming conference please call 800-344-0076. This will probably be the most informative day of your ministry.

By Dr. Michael Chitwood

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8/27/2018

Don’t Burn Out—Get Fired Up

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Pastor Jackson approached me at a Church Management Conference. His demeanor said it all. I could see by his countenance that he was on the verge of throwing in the towel and closing his Church doors.

As I talked with him he relayed to me the problem most Pastors face—not enough money to do that which he believed God had called him. Pastor Jackson’s dilemma is nothing new. Pastors suffer the most burnout of any profession and only 10% of Pastors retire from the pulpit—90% burn out and retire from a secular job. Understanding burnout probably better than most in the USA, I thought it would be helpful to address two major causes of lack of money which results in burnout and Church closure.

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 to 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, and 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 10 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.

How We Can Help

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 or to register for 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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Why Every Pastor Should Attend​

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By Dr. Micheal Chitwood

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Two Causes

Too Much Ministry

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

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What You Need to do Immediately

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What You Will Learn at our Conferences

The IRS Extends Their Reach

Family Members of the Church Board May Now be Penalized​

Why You Need Us!

By Dr. Michael Chitwood

What You Will Learn at our Conferences

Two Causes​

Too Much Ministry

Insufficient Revenue

How We Can Help

By. Dr Michael Chitwood

What You Will Learn at our Conferences

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Why Every Pastor Should Attend

You Don’t Have the Luxury of Doing Nothing

Family Members of the Church Board May Now be Penalized

Two Causes