Blog Archives

Will Pastors Be Limited as to what They May Preach

6/29/2017

Everyone who has ever been called to preach has accepted the call of God with the understanding they should be free to preach the Word of God as he or she feels led by the Holy Spirit. So far this has been the case. However, what if that Free Speech guarantee would be removed and replaced with the threat of “Hate Crimes” violations? What stand would Preachers of America take?

Most that I have spoken to have declared their full intention to preach the uncompromised Gospel regardless of any fallout. Unfortunately history teaches that when faced with that reality, some will stand firm, but many will compromise the Scriptures rather than face the consequences, especially if those consequences may consist of incarceration.

It Is Happening All Around Us

In Canada there have been instances where Pastors were imprisoned from preaching against homosexuality. In Arizona a Pastor was arrested for conducting a home prayer meeting and Bible study.

Recently, a Mayor in the state of Texas demanded for all Pastors and Preachers to surrender their sermons. The reason for the order was to screen the sermons for language that, directly or indirectly, may be considered anti-homosexual or anti-LGBT. It was only after Pastors began to revolt against the ruling, even threatening lawsuits, that the Mayor rescinded the order.

Some claim it was isolated incident from a homosexual Mayor, but that it could never happen nationally. What if, it was not an isolated incident, but a well-planned strategy to test the proverbial waters? What if there had not been backlash? What if Pastors would have turned over the manuscripts without any signs of discontent? Remember, prayer was removed from public schools in America and the behest of one woman while the Church sat idly by cowering from any public outrage.

This is why Churches, Pastors, and all Ministers of the Gospel should be connected to an organization that can provide proper oversight in all areas. Chitwood and Chitwood has provides this service to thousands of Churches and Ministries across the United States. With 79 years of experience we have been there for those in ministry, offering proper oversight and direction so that everyone called into ministry may have the freedom to uncompromisingly preach the Scripture without fear of retribution.

For those that have not done so, it is imperative that you contact me at drshaw@cmtc.org for a comprehensive legal compliance review and so that you may ensure that the Eight Legal Documents necessary for every Church and Ministry are in place.

Chitwood & Chitwood has experienced more than 550,000 Pastors and Church Leaders graduating from our compliance classes. Legal compliance is too vital to shop CPAs and Attorneys. No one should do Church books if they do not know Church law. Do not shop for the rest when you can have the best.

In Closing:

God cannot and will not bless a mess. 1 Corinthians 14:40 declares that “all things” should be done decently and in order. Before some attempt to use a contextual loop hole, let me remind you that Paul did not say, “some things or these things;” he said, “all things.” The Greek word for “decently” means “honest, honestly and the word “order” means “regular arrangement, i.e. fixed succession; official dignity.” Therefore, Churches and Ministers should maintain their Ministries and Churches honestly with official dignity.

Any ministry started wrongly will constantly be dealing with compliance issues until you hire the best to resolve them. If you are a new work or thinking of beginning a new ministry it is always better when you start Church right.

There is no one better equipped to assist Ministers and Churches in this area than Chitwood and Chitwood. We are the ultimate Clergy Tax Law professionals in America. Contact us today.

By Dr. Michael Chitwood

Pastor, Are You Protected?

6/27/2017

He called the office, hardly able to speak. He was heart-broken, by the bombshell his Church had just dropped upon him. After years of faithful service to the Church he founded, he had been “stabbed in the back” by the Board of Trustees whom he thought were unanimously in favor of him. Pastor J. had recently decided to retire after more than 30 years.

He was turning the ministry over to a younger Pastor who attained 100 percent of congregational support. After the “passing the torch” ceremony, the senior Pastor received well-wishes from the head of the Trustee Board and an envelope. At dinner following the service the retiring Pastor opened the envelope to receive the shocking news that he was now barred from the property and that the Board of Trustees were demanding a complete audit of the books. We have been doing the Church’s books for years and they are spotless. His Church books are legally and ethically compliant.

What caused trouble for the Pastor was the Church By-Laws – the Pastor never thought he needed to adjust the By-Laws he had personally written many years prior to obtaining our services (even though we had encouraged him to do so). The By-Laws he had written were not structured with proper legal language that would support him in the event of situations of which he now faced. Now, after faithfully serving the Church he founded and Pastored for more than 30 years, he was “kicked to the curb,” without his promised retirement in the form of a monthly stipend that had been agreed upon by the Board and himself.

Operating with an Unsafe Style of Church Government

One problem this Pastor had against him was the Church Government system he had chosen to use. I advise Churches all across America to get rid of Board Ruled, Congregational Ruled Church Government.

There are four styles that are legal. They are:

- Democratic

This form of government is self-explanatory. It is Congregational Ruled, and every member gets to vote on everything. This is a dangerous form of Government that could result in innocent members being targeted by the IRS under the Responsible Party Provisions’ Act.

- Technocratic

Although acceptable, I only know of a handful of Churches that operate under a technocracy. It basically means that the Church is governed from a technology standpoint rather than one that is God-directed.

- Theocratic

Theocratic means that the Pastor should run the Church as he or she hears from God. The Pastor should operate with a trusted advisory board that will provide Godly wisdom for any decisions. This does not mean the Board overrides the Pastor, nor does the Board have a vote.

Some Theocratic Church Governments suffer when the Board is placed in control, rather than the Pastor. The Pastor is the “head” of the local Church under the direct leadership of Christ, who is the ultimate Head.

The only part of the body that has the ability to hear is the head. God does not talk to Board Members about Church vision.

- Autocratic

This form of government is most often employed by some denominations. The denominational authorities are in control of the local Church – not the Pastor, Board, or Congregation.

The good Pastor I am referring to in this blog had a form of Theocratic Government, but it was Board-ruled. As we sift through all of the Church correspondence between the Board and this Pastor, it is our hopes that he has documentation to support his claims of monthly stipends and free use of an office within the compound. If not, he is out in the proverbial cold because he did not COVER HIS ASSETS.

Legally Recognized By-Laws

Our Pastor’s problems would have never materialized if he would have had proper By-Laws in place. This Pastor personally wrote the By-Laws for his Church. Let me provide a word of caution to all Pastors, do not write your Church By-Laws or have a local attorney write them. A local attorney knows the basics to get state incorporation, but does not know the intricacies required for Church business.

No Church should use any By-Laws that have not been written by someone who knows Church Law and Church business, nor should they use By-Laws that have not withstood court scrutiny.

We Can Help

Chitwood and Chitwood has been the best friend of Churches for more than 77 years. Our Accounting and Legal Staff specialize in Church and non-profit law. Our Staff has designed the best legally recognized By-Laws for any of the four types of Church Government, though we recommend a Theocratic Government.

Do not be caught without Covering Your Assets! If your By-Laws are not able to withstand legal scrutiny, you may serve your Congregation for years only to discover you are out in the cold with no legal recourse.

We cover this in our Church Management and Tax Conference. I encourage every Pastor and Church Leader to visit us at www.cmtc.org or call us toll free at 800-344-0076 to register for a Church Management and Tax Conference near you. Do not serve in your Church another day without ensuring that you have legally COVERED YOUR ASSETS!

By Dr. Michael Chitwood

You May Have Papers to Preach, but Are They Legal?

6/22/2017

He had married people in his small North Carolina Community for years and there never seemed to be a problem, but then the bottom fell out. In a divorce proceeding of a young couple, the man’s attorney decided to check the legality of the Minister’s Credentials. During a thorough examination it was determined that the Minister had been ordained by someone who was not legally authorized to do so.

The ruling led to an annulment of the young couple’s marriage and since there was no legal wedding ceremony, alimony was denied. This prompted a stir among others whose ceremony was officiated by this Minister.

This modern trend of “Spiritual fathers,” and young Ministers desirous of their “Spiritual father’s” blessing, has generated a huge number of illegally ordained clergy. A formal ordination ceremony may qualify one to do pulpit ministry, but it does not necessarily mean the credentials are legally recognized by law or the IRS. Unless the credentials are legally recognized, the Minister has not only placed others in unique positions, but also himself (especially if he has taken advantage of tax benefits available to Ministers).

According to one report, as much as 86% of Ministers in the USA have credentials that are not legally recognized.

Criteria for Legally Recognized Credentials

- All corporate documents, including your articles of incorporation, Church bylaws, board meeting minutes, and 501(c)(3) application must contain language stating that you intend to have or already have a licensing and ordination program.

- You must require that Ministerial Applicants meet certain criteria.

This should include thorough background checks, letters of recommendation, faithful service to a local Church and Pastor, and an examination requiring a reasonable minimum score.

- An application fee is a must, and credentials must be subject to a valid renewal process.

- The credentials should contain an expiration and renewal date.

Never provide lifetime credentials.

- Have guidelines in place that ensure all Ministers properly convey the Church or organization’s mission and tenets of faith.

- All Ministers are to maintain a meaningful relationship with the ordaining organization.

This is to be accomplished by the attendance of conferences or services at least annually.

- Have a documented formal commissioning process.

- Keep good records of all that are ordained and licensed including those who are active, inactive, or revoked.

Failure to adhere by these simple, but necessary requirements categorize the ordaining body as nothing more than a credential mill.

An Easier Way

The International Congress of Churches and Ministers has become the largest non-denominational ordaining fellowship in the world.

Our credentialing process is detailed and rigorous. Although, it only takes about 30 days to complete our process, the applicant knows that he or she has not been handed a piece of paper, but has earned their Ordination Certificate and all honors that apply. Most importantly, our credentials are legal.

If you are serving in a Ministry position, i.e. Pastor, Minister of Music, Youth Minister, etc., do not serve another day in that capacity without legal credentials. We have the answer to which you have been looking. You will be glad you contacted us

Contact us at 800-344-0076, 800-854-5891, or visit us at www.iccmworldwide.org and begin the ordination process today.

At Chitwood & Chitwood and the International Congress of Churches and Ministers it is “A Ministry – Not a Job!”

By Dr. Michael Chitwood

Allowable Expense Reimbursement Items

6/20/2017

The Pastor called me and said he had some exciting news that he wanted to share with me. A few moments into the conversation I discovered the news was that his Church was paying for an all-expense paid vacation and intended to make the checks payable to the airline, and hotels. When I questioned him as to why they were doing it in this manner, he informed me that they did not want him to be required to pay taxes on that which they considered as a blessing from the Church.

First of all, I am excited that a Church would have that kind of spirit where they would look for ways to bless their Pastor – rather than be a hindrance to him or her. As much as I was thrilled for him, I was much more shocked at the lack of integrity and the level of possible criminal activity I was hearing.

Church Funds Can’t Be Used to Pay Pastor’s Personal Expenses

The days of the Church paying for things for the Pastor to reduce his Federal Income Tax burden are over. It is illegal for the Church to pay the Pastor’s personal cell phone bill from the Church bank account. It is illegal for the Church to send the Pastor on a cruise using Church funds.

As I explained some of the above mentioned items of concern with the Pastor, he began to query as to why a neighboring Church had just bought their Pastor a brand new Cadillac and presented it and the title to him the previous Sunday. His question was how can they do it if it is illegal?

My answer was simple. If the Church pays for an automobile for the Pastor, it must be titled in the Church’s name or the total cost of the car must be included within the Pastor’s W-2 for that year (Board and Pastors should be aware that anything added to the Pastor’s salary must be within the allowable 32.6% of total Church payroll or the Pastor will be placed into the Golden Parachute Rule).

Churches are not allowed to write checks payable to any vendors on behalf of expenses the Pastor may incur or for gifts given to the Pastor unless that expense is one of the 66 Reimbursable Expenses allowed by the IRS. Any checks written to him or her that are not one of the allowable items must be considered as salary and included in the Pastor’s W-2.

The Internal Revenue Service still allows for a Pastor to be well compensated for his or her Ecclesiastical labor, however, the compensation package must be within federal regulations and set by an independent certified organization.

Paying Unnecessary Taxes Results in Under Compensation for a Pastor

How many Pastors are under compensated for their labor of the Gospel simply because they, or their Board, are not aware of the benefits that are available to every ordained minister of the Gospel? Every Pastor that would implement these 66 Allowable Expense Reimbursement Items would reduce his or her tax liability by thousands of dollars every year.

Unfortunately, most Pastors or Church Boards have no clue as to what is allowed. That can change today. Chitwood and Chitwood, the Number One Church and Clergy financial experts have the confidential list of all of the items that are available. Chitwood and Chitwood are the only organization that has this Confidential List. Click on this link now to receive your list.

To implement these reimbursement items, the Church Board must approve and sign each one, line item by line item. There can be no “blanket” signature approval.

Chitwood and Chitwood has been successfully educating Pastors and Church Leaders for more than 77 years. No one has done it longer or does it better. More than 550,000 graduates from our Church Management and Tax Conferences attest to our commitment to ensure that the Pastor, Church Board, Trustees and Elders, and the Church financial records are maintained under the highest possible standards and are compliant with State and Federal Regulations.

Everything in life is a choice. You will make the choice to get your Church financial records in order, or you will choose to continue down your current path. Remember, every choice, good or bad, incurs consequences, good or bad. YOU CHOOSE!

To register for a Church Management and Tax Conference near you or to host a Private Conference visit www.cmtc.org or call 800-344-0076.

By Dr. Michael Chitwood

Money Issues Are a Powder Keg for a Pastor and Church

6/15/2017

It began slowly. A couple of members left the Church, but the Pastor knew if he would explain the situation to his congregation they could make up the small deficit that would hit the Church because of the couple’s tithes. Unfortunately it did not cease. More began to leave. The Pastor discovered himself between the proverbial “rock and a hard place;” between paying the utility bill or the quarterly payroll taxes. Unfortunately he chose the former. This pressure is felt everyday in Churches all across America.

Almost every problem in a church is directly or indirectly motivated by the same factor. MONEY! Ecclesiastes 10:19 declares that “money answers all things.”

In his book, Burned but not Out, Dr. Ronnie Shaw stated that the number one cause of stress, depression and burn out for a Pastor is finances. The following statistics quoted by Dr. Shaw are issues that could be alleviated if there was no financial pressure upon the man of God:

- 4,000 new churches begin each year and 7,000 churches close.
- Over 1,700 pastors left the ministry every month last year.
- Over 3,500 people a day left the church last year.
- The Average Church uses 82% of its annual budget for personnel, buildings and administration expenses.

When the financial pressure begins its escalation upon the Pastor, it begins to affect the way he or she will preach. It was a familiar story that I had heard time and again from many Pastors. They knew God was really directing them in a certain direction for the Sunday Service, but because of the financial issues facing the Pastor, they decided to shift to Plan B and preach on money issues in hopes of receiving a larger than normal offering. I visited one Pastor’s Church on the upper east coast to preach. As I headed to the pulpit to preach the Mother’s Day Sermon for him, he informed me that I needed to forget about the Mothers because he needed money – the bills were past due and salaries were on the verge of being affected. He was relying upon me to replace God’s plan with his plan.

Fear is dangerous for anyone, especially a Pastor. It begins to formulate in his or her mind that and often causes the Pastor to react instead of act, and may drive him or her to consider leaving the ministry, become depressed and burned out, or worse begin to steal from the Church to supplement his already meager salary.

Money issues are a powder keg for any Pastor that will lead to accounting mismanagement and possibly illegalities. Pastor R. thought he had nothing for which to worry; after all his Church only had five members. However, his accounting practices were at best sloppy, but mostly illegal.

Most of the preachers in America that have been incarcerated have been so because of money issues – either Church or personal related.

Illegalities in Accounting Practices Attract the IRS

Illegalities in Church and Pastoral accounting practices will eventually bring the wrath of the IRS and the IRS is the greatest money issue anyone can have. It does not matter if your Church has five members and receives $5000.00 per year, or 50,000 members and takes in $500,000,000.00 per year. When the IRS knocks on your door they deliver the greatest financial stress possible.

Chitwood and Chitwood, the number one Church Compliance organization in the world, has been helping preachers and Churches keep their financial houses in order for more than 77 years. One of the greatest manners to remove stress from the shoulders of Pastors across America is to teach them how to get the Churches and their ministries legal with the IRS.

If you are a new Church or considering beginning a new Church work it is vital that you begin that you start Church right. We can help you because no one has been doing it longer than Chitwood and Chitwood. We are the best!

The Solution

I understand the stress of daily responsibilities. No Pastor that properly operates in his or her pastoral calling has the time that is required to make sure the Church and him or herself is legally compliant. The worse source of frustration any Pastor can experience is that which is initiated because the man or woman of God must do something they are not trained or called by God to do. This is why you need the number one Church and Clergy Accounting Professional in the World. We know how to get and keep your Church and your personal finances in compliance. This peace of mind is the greatest weapon any Pastor or Church can have in their possession. Do not spend with the possible threat of that dreaded IRS phone call or letter.

We can bring you and your Church into compliance. Remember, God will not bless a mess. Contact us immediately at drshaw@gmail.com for assistance with a legal compliance review or visit cmtc.org and register for one of our Clergy Tax and Law Conferences. You do not have a moment to lose. A moment wasted may possibly be the difference between living stress-free or facing an IRS audit; living healthy or dying young. The choice is yours.

WHY HIRE THE REST, WHEN YOU CAN HAVE THE BEST!

By Dr. Michael Chitwood

Why You Need A Specialist Doing Your Church Books

6/13/2017

Everywhere you look in today’s society you see the role of specialists. They are everywhere from schools, to businesses, to sports, and even in Churches. Schools use specialists to teach a specific area. For instance in early elementary school a specialist, trained in Early Childhood Education, will teach the same students all day. That specialist is trained in imparting Early Education skills into young minds so they will be able to grasp knowledge in the later grades.

As the kids grow, the students begin to change classes in order to sit under different instructors who specialize in a particular area. As a rule, you do not see an English/Literature teacher teaching Algebra. In College we see this further demonstrated, especially in Math and Science classes. A Calculus professor usually does not teach Geometry, etc.

Specialists in Sports

Many years ago, baseball did not have special people to pitch or hit in certain situations. If it was your time in the rotation to pitch, you pitched the whole game, or if you were being beaten in an important game, the coach or manager would bring in the next in the rotation to finish the game. The same with hitters—if it was your time to bat, you went to the plate and took your swings.

In this modern world of sports we have specialists for everything. Now baseball teams carry special players who only have one role. They have short term relievers in the bullpen along with mid-inning relief pitchers. Some pitchers are brought into the game to pitch to only one hitter. There are batters who do not play in the field. They are designated hitters. Football players use to play offense and defense. That has changed. Now there is a defensive team, an offensive team, and a special team. Some teams go so far as to have one kicker who is used for kickoffs, another for field goals, and yet another when situations demand a punt.

Specialists in Business

Once upon a time in the business world, employees did what had to be done to make the business successful. Now, the same scenarios that are used in sports and education are evident in the business world. Many businesses have people who are specialists in human resources, specialists in accounting, and most of those businesses have those who specialize in customer service, etc.

Specialists in the Church

Church has become no different than other avenues of society. Many Churches now have their specialists.

There was a day, when anyone in the Church would do what needed to be done. I remember when the choir was filled every Sunday with an open invitation from the pulpit. Anyone who wanted to sing in the choir sang. But, even then we had our specialists. These were the more gifted singers who would perform a solo prior to the Pastor preaching the morning or evening message.

If Sunday School classes needed a teacher, any member of the Church was subject to volunteer and teach. The same was true for janitorial and lawn services—everyone in the Church took their turn in cleaning the Sanctuary or cutting the grass.

There Is Nothing Wrong with Specialists

I believe most would agree that the role of specialists have enhanced every area of life. A baseball team, in the final game of the World Series, would not want to have a batter who could not hit the ball, at the plate in the bottom of the ninth inning of a tie game with two outs and the bases loaded.

A business owner would be crazy to allow someone who had absolutely no people skills, working in the Customer Service Department.

Who in their right mind would want a General Practitioner Doctor performing Open Heart Surgery on a loved one?

Specialists spend their time, energy, efforts, and finances, developing skills that apply only to the area of expertise—that is why they are specialists—they know their fields of endeavor better than others.

You Need A Specialist Maintaining Your Church Books

We live in a society of Specialists and the area of Church books and finances is one area that should always use one. Unfortunately many Churches use someone in the Church who is honest and can balance a checkbook. Others use local CPA’s. We understand why each does what they do, however that is not a safe practice for any Church.

There is no way that the person in your Church doing the Church books can possibly remain abreast and knowledgeable of all of the IRS codes and changes to those codes. Local CPA’s are good for small businesses, but they cannot make enough money from a Church to stay abreast of the changing IRS regulations that apply to Churches and non-profits. The person doing your Church books may know just enough to get the Pastor and the Church in deep trouble with the IRS.

Why You Need Chitwood & Chitwood

Chitwood & Chitwood has maintained oversight of Church books and records for almost 79 years. With thousands of Church clients and three quarters of a century experience, there is no one in the USA that can do what we do. We are the Ultimate Firm in the nation for Church books and records.

Our staff specializes in Church Management and Accounting. We know the IRS and what they look for. With Chitwood & Chitwood maintaining your Church financial books and records you have the specialists you need, especially when the “game” is on the line—we do not strike out! WE ARE THE BEST!

Every Pastor and Church Leader should attend the nearest available Church Management and Tax Conference. Your decision not to attend may be the downfall of your ministry. To register for a Conference near you visit, www.cmtc.org or call 800-344-0076. Any Pastor who would like to host a private conference for local ministries and Pastors may call 800-344-0076 and ask to speak to Dr. Ronnie Shaw. Do not delay. Your ministry may depend on our special expertise.

Will Pastors Be Limited as to what They May Preach

It Is Happening All Around Us

In Closing:

By Dr. Michael Chitwood

Pastor, Are You Protected?

Operating with an Unsafe Style of Church Government

Legally Recognized By-Laws

We Can Help

By Dr. Michael Chitwood​

You May Have Papers to Preach, but Are They Legal?

Criteria for Legally Recognized Credentials

An Easier Way

By Dr. Michael Chitwood

Allowable Expense Reimbursement Items

Church Funds Can’t Be Used to Pay Pastor’s Personal Expenses

Paying Unnecessary Taxes Results in Under Compensation for a Pastor

By Dr. Michael Chitwood​

Money Issues Are a Powder Keg for a Pastor and Church

Illegalities in Accounting Practices Attract the IRS

The Solution

WHY HIRE THE REST, WHEN YOU CAN HAVE THE BEST!​

By Dr. Michael Chitwood

Why You Need A Specialist Doing Your Church Books

Specialists in Sports

Specialists in Business

Specialists in the Church

There Is Nothing Wrong with Specialists

You Need A Specialist Maintaining Your Church Books

Why You Need Chitwood & Chitwood

​By Dr. Michael Chitwood​

Archives

Categories

By Dr. Michael Chitwood

By Dr. Michael Chitwood

WHY HIRE THE REST, WHEN YOU CAN HAVE THE BEST!

By Dr. Michael Chitwood