Blog Archives

Trustees Plan a Church Coup to Remove the Pastor

2/28/2020

Twenty years ago, while praying, God directed him and his wife to move to a small town in rural Georgia. God’s directions were clear. Once he moved to the little town, he was to begin some bible studies at his home and plant a Church.

Pastor Newton had planted a couple of Churches prior to this and expected to do with this new venture what he had done with others—plant the Church, get it established and turn it over to someone to take the vision farther.

God’s Has Other Plans

Instead of turning this Church over to another Pastor, God instructs Pastor Newton that he and his wife are to be the permanent Pastors of this new work.

The Pastor and his wife soon became accepted in the community and the Church began to recognize significant growth. Pastor Newton was living every Pastor’s dream of pastoring a Church without membership or financial issues.

For twenty years Pastor Newton pastored the ideal Church, but unbeknownst to him, things were about to get ugly.

Board Members Have Private Meetings

One of the newly appointed Trustees began informally meeting with other Trustees. He would take one or two out to lunch and begin to float the idea that maybe Pastor Newton was too old to continue on in role. This Trustee reminded the others of how the community was beginning to see an influx of the millennial generation and how they would need a Pastor that could properly relate, if their Church would hope to influence these new citizens to attend their congregation.

After several of these small lunches, the particular Trustee felt he had enough influence to promote the idea to the complete Trustee Board. To make his plan work, he needed to gather all of the Board, without the Pastor.

At a gathering of all of the Trustees at his home, he was able to convince half of the Board to consider the idea.

Pastor Finds Out from Unsuspecting Source

Pastor Newton was having his car serviced, when the Service Manager informed him that he had heard that Pastor Newton was retiring and how he hoped that Pastor and his wife would continue to live in their community.

Needless to say, the Pastor was shocked to hear what he thought was a rumor. When Pastor Newton begin to question the Service Manager as to his source of information, the Pastor learned the information was disseminated via a Church member.

Once Pastor Newton returned home, he quickly called the member to discover that she had heard it from one of the agreeing Trustees’ wife.

Pastor Calls A Meeting

Pastor Newton called a Board Meeting to get facts. At the meeting he was shocked to learn the Board was split on the desire to replace him. It was then that the Pastor was told by the initiating Trustee, that if he did not resign so they could install a younger Pastor, the Trustee would make a call to the IRS to request they investigate the Church.

The Pastor had no clue the Trustee had being doing somethings that should not have been done that would create problems for the Pastor and the Church.

It All Could Have Been Prevented

Had Pastor Newton attended one of our Church Management and Tax Seminars, he would have known exactly what to do to protect the vision God had given him twenty years earlier.

Had he retained our services, we could have intervened before it escalated to the point that it split his Church and caused division among the community.

While most Pastors are admired by most of their congregation, they naïvely think that everyone in the Congregation adores them and would always have their back. That is not so. Unfortunately, some members don’t love the Pastor—they tolerate him.

Pastor Newton’s remaining years at the Church he founded were plagued with stress and sometimes depression. What should have been his greatest years turned out to be his worst. Those whom you think have your back, may be about to stab you in the back.

Don’t let this happen to you! Every Pastor, Pastor’s Spouse, Trustee, and Board Member should attend the nearest Church Management and Tax Seminar now! To register for a seminar please call 800-344-0076 or visit us at www.cmtc.org. If there is no seminar near your location, ask us how you can sponsor one, or ask to be directed directly to one of the professionals of Chitwood & Chitwood to get your Church in compliance NOW!

Remember, “It’s not what you know that will hurt you. It’s what you don’t know!”

By Dr. Michael 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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IRS Pulls Out Every Law

2/28/2020

Pastor Simpson called our office in absolute Panic. In 80 years of our firm doing books and record keeping for Churches, I had never personally heard, or heard of any Pastor or Church member in such total despair as him.

Pastor had attended one of our seminars, but thought he didn’t need our services. In his words, “We are only a small country church.” The very thing that initiated the beginning of his problems was one of the many topics that govern Church bookkeeping.

The Ostrich Mentality Created Further Damage

When the notices began arriving from the Internal Revenue Service (IRS), the Church Check-writer threw them away. After reading the first one, she determined that the topic of the IRS notice did not apply to a Church—especially one as small as theirs.

When the Check-writer finally allowed the Pastor to see one of the many correspondences the IRS had sent, the Pastor thought the best thing to do would be to call the IRS for clarification. His call seemed to further support his and the Check-writers outlook of the situation. The agent to whom they spoke new nothing of non-profit and Church law, and proceeded to tell the Pastor that the Church should not worry—everything was ok.

Pastor Missed Another Topic Taught at the Seminar

Sometime during any seminar, we ensure we cover the court case of “Maser v. Commissioner,” (2011). The ruling in that case was as follows:

The law is clear that erroneous legal advice rendered by employees of the IRS generally is not binding on the Commissioner. Dixon v. United States, 381 U.S. 68, 72-73 (1965); Schuster v. Commissioner, 312 F.2d 311 (9th Cir. 1962), affg. in part and revg. in part 32 T.C. 998 and 32 T.C. 1017 (1959); Fortugno v. Commissioner, 41 T.C. 316 (1963), affd. 353 F.2d 429 (3d Cir. 1965). In any event, the Commissioner cannot waive the jurisdictional requirements, and jurisdiction cannot be established by estoppel.

The judge in “Maser v. Commissioner” further stated that it does not matter what an IRS agent tells you—the only thing that matters is what is written in the code.

Pastor Simpson quickly discovers what we have always known, and that is, “Cheap Advice is Always Expensive.

IRS Pulls Out All Stops

What should have been an easy fix, had Pastor Simpson and his Church engaged us at our conference, or engaged us upon receipt of their first notice, we could have solved the issue with no penalty. Unfortunately, things escalated.

Since the IRS did not receive a timely reply to their correspondences, they attacked with full force. When the investigating agent arrived at the Church, they were not in the mood for an exchange of pleasantries.

Unfortunately, and fortunately, the Church contacted us when the agent arrived. It was unfortunate because the IRS had reasonable grounds to dig deep into the records of the Church. It was unfortunate because millions of dollars in fines and penalties were about to be imposed. However, it was fortunate for the Church because we know the IRS better than they know themselves. Our expert team was able to negotiate an 80% reduction in the penalties and convince the agent to not seek criminal charges against the Pastor and Board Members.

Pastor, Board, and Church Still Suffering from the IRS Findings

While Chitwood & Chitwood was able to get the penalties dramatically lowered the result was still a very large penalty for a Church of their size. The IRS agreed to payment terms, but as part of the agreement, all Church assets were frozen, in addition to all personal assets of the Pastor, and Board Members.

To date, their assets are still frozen and some of their small congregation decided it was in their best interest to leave the Church, adding further damage to the Church’s financial standing.

Everything Could Have Been Avoided

Chitwood & Chitwood has been protecting Churches, Ministries, Pastors, and Board Members for more than 80 years. We are the best. As an offshoot of Chitwood & Chitwood, our Church Management and Tax Conferences travel across the nation teaching Church and Clergy Tax Compliance seminars.

Although time does not permit us at the seminars to teach the complexity of the IRS code pertaining to Churches and Ministries, we teach enough of the basics so a Church can determine if they should be concerned. For those who want to engage us, we drastically discount our services, sometimes as much as 75%. We do this so no Church, Pastor, or Board Member can say, “We would love to retain you, but we cannot afford it.”

It is imperative that all Pastors and Church Board Members attend a seminar near them immediately. To register for a seminar please call 800-344-0076 or visit us at www.cmtc.org. If there is no seminar near your location, ask us how you can sponsor one, or ask to be directed directly to one of the professionals of Chitwood & Chitwood to get your Church in compliance NOW!

Remember, “It’s not what you know that will hurt you. It’s what you don’t know!”