The Hardest Part of Becoming a Legally Compliant Church

7/11/2018

I see it several times every week in our Church Management Conferences across the nation. While teaching a subject that many Pastors and Church Leaders would rather not discuss, their trepidation and timidity toward the subject matter and where their Church fits in the puzzle of that picture is easily discernible.

I always teach a class from the perspective that none of the attendees want to be illegal and non-compliant—they just didn’t know what they were doing was wrong. Case in point is Pastor Smithfield. At the morning break, lunch break, and the afternoon break Pastor Smithfield approached my table with the same question scenario—I want to become compliant; I want to do things Biblically and legally, but what legal issues will I be launching that will harm former Pastors and Treasurers of my Church? Then his dilemma became evident. He was struggling with the toughest step any Pastor or Church struggles with in the area of Church Compliance.

The Hardest Part of Becoming Legally Compliant is Not the Fear of an outside Party Viewing Church Books and Records

Although many Church Checkwriters (Treasurers) are hesitant for a third party to view their records, this is not the largest hurdle a Pastor and Church must clear on the road to compliance. Most Checkwriters are afraid that the third party will discover countless errors in their accounting review—the Checkwriter simply does not want to be made to look incompetent, even when he or she is the only one with that thought. During our review process we know there will be many accounting errors, simply because the Checkwriter is not a Certified Public Accountant specializing in non-profit law. We don’t review the Church books to point fingers and cast blame—we do it to fix any problems.

There is another side of this coin. Some Church Checkwriters don’t want a third party reviewing the accounting records because there may be some embezzlement of Church funds and a third party review will likely expose it. According to a Christianity Today article 10% of protestant Churches in the USA have some degree of embezzlement.1

Couple that with a study by Gordon Conwell Theological Seminary in Hamilton, MA which declared that 95% of embezzlement from Churches is not reported 1 and the statistic becomes astronomical.

Whether the Checkwriter is apprehensive of someone viewing the records because he or she is afraid their incompetence in accounting would be revealed or the Checkwriter is committing fraud is not the biggest hurdle to Church Compliance.

It is Not a Lack of Funds

Although funds are usually tight in all Churches, big or small, the money required to get the Church compliant is not the biggest hurdle. Chitwood & Chitwood has been the premier Church accounting firm in the USA for 80 years and I have discovered that Churches, like people, will usually do what they want to do. When people really want to do something they will find a way.

We have Churches with as little as four members that have engaged our services to bring their Church into compliance—if they can do it, any Church can do it.

The Greatest Hurdle to becoming A Compliant Church

So if the hardest part of becoming compliant is not a third party reviewing Church records, and it is not a lack of funds, what hurdle remains that presents itself as the hardest part of becoming a compliant Church?

The most difficult part of becoming a legally compliant Church is, The Decision to become Legally Compliant. Whether the hesitation to make the decision is out of fear that someone may be negatively affected, or what the Church Board and Treasurer may think, the first and most important step, and the hardest, in becoming a legally compliant Church is making the decision to do so. Everything begins with a choice. A thousand mile journey begins with the first step. The most difficult part is the Pastor and Church Leaders making the decision to get their House of worship in order.

This is where Chitwood & Chitwood becomes your best friend. We do nothing to embarrass or harm a Church or Pastor. Our motto is, “Face it, Fix it, and Forget it!”

Take The First Step Now!

The first step any Pastor, Pastor’s Spouse, and Church Leader can take is to register for an upcoming Church Management Conference. To do so, please call 800-344-0076. At our conferences we will teach you rules and regulations relating to Church Compliance and offer you opportunities to take that first and hardest step--the decision to get your House of Worship in order.

This will be the greatest decision you and your Church will ever make other than the decision to accept Christ as your Savior. DO NOT DELAY! Every moment of procrastination may cost you dearly should the IRS show up at your door.

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.