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Integrity in the Pulpit

8/17/2017

 
We have taught for years that God cannot bless a mess. Mainly this has referred to the status of our Church books and records. When the money is funny, it limits God’s ability to sanction what is transpiring in any given service. We see this in the order of the tithe as outlined in Malachi 3. In this passage God promised that when we tithe He opens the windows of heaven and pours out blessings upon us—in other words, when the tithe is given in a service and that tithe is properly managed (because it is holy: Lev. 27), our Church services are conducted under an open heaven. Unfortunately there are still many in ministry who do not understand the value and importance of an open heaven.


Integrity Entails More than Just Money

As I travel the nation assisting Churches and Ministers to be all that God has destined them to be, I am saddened by the reports I get from Christians across the USA of a lack of integrity in the pulpit. One of these areas is how preachers will blatantly lie to those whom they are speaking. Whether it is Pastors or Evangelists, so many feel they must misrepresent facts and truth to confirm their ministry.

Among Christianity there is the often used phrase: “Evangelistically speaking.” Those who have been a Christian for any length of time knows that the phrase means that the facts or numbers reported are skewed or inflated. In the case of Evangelists, the number of conversions in their meetings usually includes not only those who actually accept Christ during their service, but also includes those who come forward to the altar. For instance, there may only be two people who accept Christ as their Savior, but because 50 people came to the altar, many Evangelists report 50 instead of two.

Another example is the inflated numbers when reporting those in attendance. For some reason we feel as if we are in competition with the Church down the street. When that Pastor declares he had 500 in attendance, other Pastors will report a higher number. I have actually seen some that have counted everyone that came into the Sanctuary, including those who went out and came back in. Many Pastors will include everyone that attended any service or function for the week into their attendance numbers. I was in a Church once that would probably seat 200, but I heard the Pastor tell someone that he had almost a thousand in attendance.


The Church has Lost its Witness within the Community

There was a time in our history when the Church and the Pastor was revered within a community. Even sinners respected the House of God and its Pastor. Those days are no longer. The Church and its Ministers are becoming more and more tainted in the eyes of the world with every passing day. So that we may look like a success to other Ministries, we have resorted to misrepresenting facts and the world has been watching.
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I have been in services where the Preacher told everyone the anointing was on him because people were “falling out” when he prayed for them. The only problem was that most of those people would later declare that the Preacher pushed them so hard during the prayer that he, not God, actually knocked them down.


What Begins in the Church Bleeds over into the Community

The world has also watched as thousands of Ministers have been imprisoned for committing fraud to the U.S. Government; tax evasion; and in some cases, outright embezzlement. What message are we sending to a lost and dying world when Preachers are lying, stealing, and cheating just so it can appear as if they are more successful than they really are? God does not measure success by your numbers, but by your obedient stewardship of that which He has entrusted you. Is it any wonder that God has declared that judgment must begin in the House of God (1 Pet. 4:17)

If your Church and Ministry are really called by God, He doesn’t need you lying on His behalf to make you look good in the eyes of others. Whether your Church service has thousands in attendance or just a handful, if it and you are ordained by God, you are precious in His sight. According to the Parable of the Talents, the Master did not give each servant the same amount—He gave them what His experience with them told Him they could manage. It was only the servant with the one talent that was ashamed and hid it. Regardless of how many God gives you, it is your responsibility to properly manage them and to give a proper account to Him. Lying to make you look good in the eyes of others only shuts the heavens over your Church and your weekly services.

 

In addition to closing heaven over you, your misrepresentation will cause you to miss heaven when you die. According to Rev. 21:8 “all liars” will be cast into the Lake of Fire. It didn’t say some liars; it didn’t say all liars, but preachers; it didn’t say all liars except those who are trying to make God look good—God said all liars! It is time to get your House and Ministry in complete order. You do not have to misrepresent something to be a success. Your obedience to His mandate determines how He views your success!


We Can Help

Whether your Church is 50 or 5000, our firm is the best Church Management Firm in the world. Our 79 years of expertise can help you manage and be proud of that which God has entrusted you. God cannot bless a mess!

I encourage every Pastor and Church Leader to attend an upcoming Church Management Conference in your area. To register, call 800-344-0076 or visit www.cmtc.org.

Your attendance in one of these conferences will be the best investment you can make in your Ministry and Church.
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By Dr. Michael Chitwood

To Whom Much Is Given, Much Is Required

8/15/2017

 
Pastors and ministers of religious institutions have come under increased scrutiny that relates to cash practices, and the proper accounting and reporting required for each.

He was the Pastor of a good Church in the mid-Atlantic region. The Church paid its obligations promptly each month. To look at it from the outside looking in everything seemed fine. The un-manifested problem however was the Pastor. He felt as if the Church was not properly supporting him (though it was, based on the size and income of the ministry).

Pastor H. decided the best way to supplement his income was to receive “Love Offerings” each week that would be earmarked as such. This Pastor began to remove the cash from the offerings. If any individual wrote a check for that “Love Offering” the Pastor would simply remove that amount of cash from the collection thereby leaving the check to be deposited to the Church’s account.

One of the Elders approached the Pastor in love and expressed his concern for the actions of the man of God. The Pastor defensively replied, “I bring it in, I should be able to take it out.” Whether or not someone blew the whistle, or it was the result of other issues, the IRS began their audit.

Unfortunately, the Judge and jury would not accept the Pastor’s arguments. The Pastor discovered himself in a “prison ministry” of which he had no desire or anointing to fulfill. He went to prison!


Legal versus Illegal

Every Pastor I know is elated when they receive the proverbial “Pentecostal Handshake,” i.e. money placed into their hands. Often these warriors of the Gospel received different types of cash as part of their operations and activities. These cash payments could consist of contributions, “love gifts,” honorariums, cash donations or donations of items or property. It is vital for ministers to understand the terms and what such payment may represent under IRS regulations.

For something to be a true “gift” and considered a nontaxable event, it must meet several criteria that was outlined under the original Duberstein case. That with which God desires to bless you, may curse you if not transacted properly. What you do not know can hurt you!

Not all “Love Offerings” are taxable, but many of them are. It is when the Pastor, minister, or Church does not know the difference that it creates conflict that may lead to penalties or possible imprisonment. Just because a “Love Offering” is made as a charitable contribution to a church or tax-exempt religious ministries does not constitute it as a tax free gift to ministers or Pastors.

When “Love Offerings” are formulated properly they can be tax exempt. Herein lies the problem – most Churches, Pastors, and ministers do not know the difference between demarcation lines of legal or non-legal.


What Does God Say?

God wants to bless His people, especially those serving in front-line ministry. 1 Timothy 5:17-18 declares, “Let the elders that rule well be counted worthy of double honor, especially they who labor in the word and doctrine. For the Scripture says, ‘Thou shall not muzzle the ox that treads out the corn. And, the laborer is worthy of his reward.’”

Since God desires for ministers and Pastors to be financially blessed, to whom does the responsibility lie to see that they are blessed? Galatians 6:6 answers this question. “Let him that is taught in the word communicate [become a partner] unto him that teaches in all good things.” It is the responsibility of anyone, taught by the man and woman of God, to bless those in ministry.

However, there is command that is from the mouth of our Lord that we must heed. Jesus declared in Matthew 22:21 that we are to “. . . Render [give] unto Caesar [the government] those things which are Caesar’s [the government].”

God desires that ministers and Pastors be financially blessed by others, but we must do it the right way (Rom. 13:1-2; Heb. 13:7).


The Last Word

As the ultimate organization in our field, Chitwood and Chitwood’s 79 years of experience has placed us at the highest echelon in protecting Churches, Pastors, and ministers. We are number ONE in our field. Contact us today at drshaw@cmtc.org to discover the proper manner to design “Love Offerings” so you may enjoy the financial blessings others desire to bestow upon you.

Anyone who has begun a new Church or considering forming a new Church, solve your compliance issues at the outset by starting Church right. It is easier to end right if you start right.


LEGAL COMPLIANCE IS NOT AN OPTION – IT IS A NECESSITY!


We will show you the proper methods for establishing “Love Offerings” inside and outside of the Church setting. Legal blessings are always better than those that are not! As the best in America we have only your best interest at heart.

Every moment you delay places you in jeopardy of penalties and maybe criminality. Go to www.cmtc.org or call 800-344-007 to register for a Clergy Tax and Law Conference near you.
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By Dr. Michael Chitwood

Free Speech and the 501 (c)(3) – What Every Pastor Needs to Know

8/10/2017

 
Our Nation’s Founding Fathers gave us something many other countries do not enjoy and that is the protected right of Free Speech that is granted in the first amendment to our Constitution. However, freedoms do not come without responsibility. For instance, you may have the right to free speech, but you do not have the right to yell “fire” in a crowded theatre. With that said, Pastors may enjoy the Constitutional right of Freedom of Speech, but there are some restrictions to that right when operating under the Non-Profit 501 (c)(3) umbrella. So, what are some dos and don’ts?
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Pastors are unique people who have a tremendous responsibility to “watch” for the souls of those who attend their Churches. Not only must they preach an uncompromised truth from Scripture, but often, members will want the Pastor’s personal opinions. Unfortunately, some of these opinions may not be legal.


When Is It Illegal

Due to the nonprofit status afforded to Churches, there are some things that must be avoided if the Church is to maintain its exempt status. Most of those deal with politics. Although Pastors are allowed personal opinions on political matters, they are not allowed to voice those opinions from the pulpit, nor are they allowed to make an endorsement for a particular political candidate or assist in swaying an election.

Another problem is with the Pastor’s blog. If that personal blog is linked to the Church website, the Pastor cannot speak personally about any candidate or an upcoming election.

As 501(c)(3) organizations, Churches/Pastors are prohibited from endorsing a political candidate or from intervening in a political campaign.

Most of us have strong, personal convictions of candidates running for political office. Since this is an election year, many pastors will feel the need to voice their political opinions. Most of their political opinions are based upon their Judeo-Christian beliefs. However, current law prohibits tax-exempt funds, such as those of a church (including from the pulpit or blog), to be used to intervene in or influence a political campaign.

Does this mean a Pastor should remain silent? Absolutely not! It does mean that the Pastor should take great strides to make sure his or her remarks, or methods used to make such remarks, are legal.


Keeping It Legal

A Pastor can say anything he or she wants (1st Amendment Freedom of Speech) as long as he or she does not use Church funds, methods, or equipment to propagate that opinion.

Therefore, if a Pastor is expressing his or her opinion on political matters or candidates through a blog – keep the blog personal and do not allow it to be linked to the Church website. If the opinions are spoken, make sure they are not spoken during a Church service or event.

This also applies to podcasts and social media posts. Make sure the podcasts and social media posts are not connected to or sanctioned by the Church. A good rule of thumb is, “Keep the spiritual, spiritual, and the personal, personal.” Do not mix the two.


Don’t Get Left Behind

Ministry is rapidly changing. We cannot “do” Church like we used to do it. To keep it proper and legal is often overwhelming for any Pastor or Church Board. As a rule this was not a class in Bible College, and if it was, what they taught is now outdated.

Often when Pastors and Church Leaders hear the latest legal changes, many want to resign. Do not be discouraged.

Pastors, do what you do, and seek help with that which you are not called or qualified. The best thing to do is connect with Chitwood & Chitwood who has been taking care of Church compliance issues for more than 79 years. We are the best.

Since the ministry world is changing so rapidly, I would encourage every Pastor and Church Leader to attend the nearest Church Management and Tax Conference. During these conferences we will show you how to protect the ministry vision God has given you for your city. To register, contact us at www.cmtc.org or call 800-344-0076. Do not delay. Time is not on your side.

With our assistance, every Pastor and Church Leader will again discover the joy of ministry.

Remember, for us, “It is A Ministry – Not A Job!”
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By Dr. Michael Chitwood

They Are Coming—Are You Ready?

8/8/2017

 
I don’t know of any letters or words that strike fear in the heart of individuals like the three dreaded letters, IRS (Internal Revenue Service). 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!”
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By Dr. Michael Chitwood

The Perfect Storm May Cost Your Church Millions

8/3/2017

 
There is a huge problem within the Church world in the USA. Many within the Church population feel as if they never have to worry about any form of Government intrusion to Houses of Worship. Many want to hold to an unconstitutional mindset that there is such a thing as Separation of Church and State. That idea was included in the writings of the Federalist Papers, not the Constitution. With that said, the Government is quick to use it for as long as it is only for their benefit.

Then there is the group that thinks because they are Christian that they are totally protected by God from any Government infringement against them or their Church. I was teaching a Clergy Tax and Law Conference in Memphis. There was a Church Bookkeeper in attendance whose books were so far out of Internal Revenue Service (IRS) Compliance, that should she be audited she would spend many years in a Federal Prison. When I asked her how she was going to fix it, her reply was, “I am going to pray and God will not let anything happen to me.” There is nothing wrong with prayer, but prayer cannot protect someone who is purposely violating the laws of the land (Rom. 13:1-3).


Churches Must Obey the Law

There are thousands of pages in the IRS code that apply to Churches and Ministries in some fashion. Our new President sent a communiqué to Attorney General Jeff Sessions and told him to begin to enforce the laws that are on the books and DO NOT seek light sentences for the accusers. This communiqué also applies to any laws affecting Churches.

One TV Minister has recently been indicted and the Ministry offices of another were recently raided by the IRS, Federal Marshals, and Postal Service Police. The law will be enforced and your prayers will not prevent that when you are violating those laws.

It is simple—get your Church books in order or go to prison.


The Perfect Storm

With all three branches of Federal Government controlled by one Party, tax reform is on the horizon. According to an article in the Washington Examiner in 2016, the IRS code was almost 75,000 pages at the end of 2015. When you calculate the exponential growth demonstrated over the past 30 years of the tax code, you would determine that the tax code is now almost 85,000 pages. Anyone with common sense can agree that the IRS code needs reforming.

The only problem with proposed reformation is that many in Congress and Senate desire to see changes that will detrimentally affect charitable contributions. Although most givers say they do not give for the tax-deduction credit, credible polls prove otherwise.

As many Churches across the nation struggle to meet their weekly budgets (because only 11% of the Church gives tithe), what would happen if the meager percentage of tithers are further reduced in number because they no longer are afforded tax-deduction credit?


It Is Time for the Church to Get Its Head out of the Sand

Changes for Churches and Ministers are on the horizon—both criminally and budgetary. To deny those changes and not comply will hasten the downfall of much needed ministry in the USA.

Prayer will not cover those that are in rebellion to the Word of God. Holding to the false understanding of “Separation of Church and State” will not help you. If Churches and Ministers are to survive and be the awakening force to this nation, we must obey the law and bring our Churches and Ministries into IRS compliance. YOU CANNOT AFFORD TO BE CAUGHT IN VIOLATION OF THE LAW!!!


We Can Help

For more than 79 years Chitwood & Chitwood has protected Churches and Ministries against assaults by the IRS. WE ARE THE BEST!!! It is in the best interest of every Pastor and Church Leader to attend the next Church Management and Tax Conference nearest their location. For upcoming locations and to register, please visit us at www.cmtc.org or call 800-344-0076.  THIS IS ONE SEMINAR YOU CANNOT AFFORD TO MISS!

By Dr. Michael Chitwood
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The Church—The Easiest Place To Steal Money!

8/1/2017

 
Embezzlement happens much too often within Church settings. It often goes unnoticed for months or years, and when it is discovered the amount of the loss is usually astronomical. All anyone needs to do to discover the frequency of this type of activity is to type “Church Embezzlement” into the search bar of the computer. Headings such as:

 - Woman pleads guilty to embezzling from the Church
 - Church Treasurer’s Husband arraigned on embezzlement charges
 - Church bookkeeper gets 3 years for embezzlement
 
The above are only a few of the thousands that are listed.

According to one source, Church embezzlement and Church crime is estimated to be $100 million per day. Many scholars believe Church fraud will reach $60 billion by 2025. If that isn’t staggering enough, we are told that about 80 percent of all cases of Church fraud are unreported.


The Root of the Issue


Churches are made up of trusting people. We are taught that we are to love one another, turn the other cheek, give people the benefit of the doubt, and walk in forgiveness when we have been wronged.

The thought of a Church bookkeeper or Treasurer stealing from the Church is not something that is readily accepted for those who embrace Christian principles. Church Leadership needs a reality check so they may realize that three things within the Church are stepping stones to Church fraud and embezzlement. These are:

 - Easy access
 - Little or no controls (Lack of accountability)
 - Personal need/desperation (Desperate people do desperate things).

As much as all of us want to believe that the bookkeeper who diligently keeps the books would never steal, the reality is that if the conditions are right, embezzlement is inevitable.

Dr. Ronnie Shaw, Certified Church and Clergy Tax Instructor declares, “You get what you inspect – not what you expect.” Always be leery of those who question any inspection or accountability.


The Snowball Effect

Once embezzlement begins it is hard to for it to end. An avalanche never begins as the whole side of the snowy mountain crashing below. It always starts with a small snowball. The person does it once out of desperation and then since they did not get caught, it becomes easier to do it again. These holes in the armor demonstrate a lack of management and control.

Our natural leadership tendency in a Church setting is to empower people with freedom to work independently. However, when it comes to Church finances, we need to toss that Leadership Principle out the window.

Churches cannot exist without the generous support of its members. Those who embrace the Christian Principle of giving trust that Church Leadership will be good stewards. Unfortunately, countless cases of Church fraud and embezzlement speak to the critical need for Church Boards and Pastors to do their job and safeguard God’s money.

Embezzlement does not have to happen if the Church Leadership will take necessary steps of accountability.


10 Ways to Stop Embezzlement

 - Adopt and enforce clearly stated policies for handling cash

The more eyes there are on the books, the more likely it will be that someone will notice any irregularities.

 - Training

Pastors should hire Chitwood & Chitwood to provide the tools necessary to educate Check Writers and Board Members.

 - Audits

As I quoted Dr. Shaw earlier, “You get what you inspect – not what you expect!” Because of our 77 years of experience, Chitwood & Chitwood has seen it all. We know what to look for.

 - Rotation

Rotate regularly volunteers and employees who help with counting the offering. Avoid using those who are related.

 - Safes

Cash and checks should be kept securely locked in a safe until they can be delivered to the bank for deposit.

 - Use the Three-Person Rule

Always make sure at least three unrelated people are counting the money, and do not have personal financial issues.

 - Background and Credit Checks

 - Be Alert for Warning Signs

These are numerous, but a few are: “Only one person having access to offering, cash, checks, or checking account; The person with access doesn’t want to take a vacation and guards against someone else doing their job; The person with access is living beyond their means; The person with access has personal financial issues.”

 - Act on Suspicion

Act on that “gut feeling.” Take time to investigate and solicit assistance from a trained fraud examiner.

 - Supervision Management

NO ONE should be above accountability or oversight.


In Closing

Chitwood & Chitwood has over 78 years of experience in Church and Clergy financial management. We have seen it all. Don’t ever not do the right thing because you think you cannot afford it or because of fear when it comes to protecting Church finances.

Call us today at 800-344-0076 or contact drshaw@cmtc.org to find out how to make sure your books are in order and that you are not a victim of Church fraud. Pastors, we are on your side and desire to assist you in helping your Church reach its next level for God. Every day you do not contact us is another day that thousands of dollars may be walking out of your Church because of fraud. Remember Pastor, God and the IRS are holding you responsible. Get it fixed now.
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By Dr. Michael Chitwood

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