QUESTIONS REGARDING RUNNING A CHURCH/MINISTRY

Q: What type of records must a church/ministry keep?

A: Under Title 26 USC section 6033, the church/ministry is a religious order and therefore has complete immunity to disclosure. It is not necessary for the church/ministry to maintain records of any kind except for its own purposes and reasons.

Q: Can the church/ministry pay for health or life insurance for its Directors?

A: Yes. If the Board of Directors votes that the minister/Director and his family should be covered with such insurance, they may vote to have the church/ministry reimburse the members for all the medical, hospital, dental, and other health or life insurance for all family members and intended for the church/ministry by taking care of the health of the Director/minister.

Q: Who can donate to the church/ministry?

A: Anyone--even the Directors may donate. The law states that anyone may donate up to 50% of their taxable income to a recognized church/ministry of their choice. The church/ministry may provide a receipt stating that it is a religious entity and provide its EIN number.

Q: Can the church/ministry pay utilities and other expenses for its Directors?

A: Yes. All it takes is a vote of the Board of Directors to make any payments it feels is necessary to provide for the business and function of the church/ministry.

Q: Can the Directors place their own property such as a car into the church/ministry estate?

A: Yes. As long as the property is used for the benefit of the church/ministry, then it may be placed into the estate of the church/ministry.

Q: What type of property may the church/ministry own?

A: Anything that may benefit the church/ministry. If it is a ranch it can be called a retreat. If it is a plane, it may be used for transporting the Directors and its members to church/ministry related functions. The list is endless on what type of property can be placed into the church/ministry's estate.

Q: How often does a church/ministry have to meet?

A: Generally, churches meet on a weekly basis. A ministry usually meets on a daily basis or on a scheduled basis. However, there is NO rule in the law. Therefore, it may be assumed that the meetings are so spaced as to be reasonable for the religious purpose of the church/ministry. Remember, any meeting is when 2 or more people "congregate" for a religious purpose.

Q: How often must the Board of Directors meet?

A: As often as they require for the church/ministry related business. This may be as little as once or twice a year.

Q: How many members of the Board of Directors must be present to have a lawful meeting?

A: At least two out of three.

Q: Is it necessary to keep minutes of Board Meetings?

A: Yes. Everything done by a church/ministry must be done by resolution (order), voted on and passed by the Board of Directors. However, you need to record only those items which received a majority vote in the meetings and are necessary for the function of the church/ministry.

Q: Who decides which Director or Board member may sign checks?

A: The Board of Directors, including the Executive and Managing Directors, vote for the decision and record the vote in the minutes.

Q: Is it possible to take the "parsonage" off the tax rolls if the church/ministry owns the property?

A: No property ever comes off the "tax rolls". Property may be exempt however, if it can be proved that the property is used exclusively for religious purposes. This must be checked out with the local tax authority for each requirement.

Q: What type of "income" may the church/ministry receive without reporting obligations?

A: The church/ministry may receive any form of donations. It may also receive any form of "passive investment" such as: Real Estate, Stocks, Bonds, Mortgages or Bank Interest. It can "sponsor" any kind of fund raising events.

Q: Does the church/ministry have to file a tax return to the state or federal government?

A: No. Not unless anyone can find any law which requires it to file, and I have never been able to find any law.

Q: What happens to the church/ministry's assets when a Director dies?

A: The church/ministry never dies. Its property is still owned by the church/ministry. However, minutes recorded by the Board of Directors may appoint another Director or anyone else to take the place of the Director who died. The church/ministry should have within its recorded minutes directions as to what will happen to the assets when this should happen.

Q: Does a Director have to put all of their property into the church/ministry?

A: Anyone can put all or none - or as little as they want into the church/ministry's name. However, if any Director takes the vow of poverty, they should place everything into the church/ministry, give it to their spouse, or donate the property to anyone of their choice.

Q: How does one prove contributions/donations to the church/ministry?

A: They should write a check from their personal checking account for the amount each month. Then at the end of the tax year, photocopy both the front and back of the checks and receipts. Attach the photocopies to your copy of Form 1040.

Q: How should any check be made out?

A: Pay to the order of: Name of church/ministry.

Q: How should the checks be endorsed?

A: Write the name of the church/ministry, then state "For Deposit Only."

Q: How many people can be members of the church/ministry and how few?

A: You must have at least two for every church/ministry. You may have as many members in the church/ministry as you want.

Q: Can a Director for a church/ministry be a Director of another church/ministry?

A: Yes. There is no law for or against being a member or director for as many church/ministries as you want.

Q: Can the church/ministry pay for trips, (vacations) food, entertainment, clothing and other property that a Director uses or takes?

A: Yes. However, the minutes must reflect the vote of the Board for payment.

QUESTIONS REGARDING RUNNING A CHURCH/MINISTRY

Q: What type of records must a church/ministry keep?

A: Under Title 26 USC section 6033, the church/ministry is a religious order and therefore has complete immunity to disclosure. It is not necessary for the church/ministry to maintain records of any kind except for its own purposes and reasons.

Q: Can the church/ministry pay for health or life insurance for its Directors?

A: Yes. If the Board of Directors votes that the minister/Director and his family should be covered with such insurance, they may vote to have the church/ministry reimburse the members for all the medical, hospital, dental, and other health or life insurance for all family members and intended for the church/ministry by taking care of the health of the Director/minister.

Q: Who can donate to the church/ministry?

A: Anyone--even the Directors may donate. The law states that anyone may donate up to 50% of their taxable income to a recognized church/ministry of their choice. The church/ministry may provide a receipt stating that it is a religious entity and provide its EIN number.

Q: Can the church/ministry pay utilities and other expenses for its Directors?

A: Yes. All it takes is a vote of the Board of Directors to make any payments it feels is necessary to provide for the business and function of the church/ministry.

Q: Can the Directors place their own property such as a car into the church/ministry estate?

A: Yes. As long as the property is used for the benefit of the church/ministry, then it may be placed into the estate of the church/ministry.

Q: What type of property may the church/ministry own?

A: Anything that may benefit the church/ministry. If it is a ranch it can be called a retreat. If it is a plane, it may be used for transporting the Directors and its members to church/ministry related functions. The list is endless on what type of property can be placed into the church/ministry's estate.

Q: How often does a church/ministry have to meet?

A: Generally, churches meet on a weekly basis. A ministry usually meets on a daily basis or on a scheduled basis. However, there is NO rule in the law. Therefore, it may be assumed that the meetings are so spaced as to be reasonable for the religious purpose of the church/ministry. Remember, any meeting is when 2 or more people "congregate" for a religious purpose.

Q: How often must the Board of Directors meet?

A: As often as they require for the church/ministry related business. This may be as little as once or twice a year.

Q: How many members of the Board of Directors must be present to have a lawful meeting?

A: At least two out of three.

Q: Is it necessary to keep minutes of Board Meetings?

A: Yes. Everything done by a church/ministry must be done by resolution (order), voted on and passed by the Board of Directors. However, you need to record only those items which received a majority vote in the meetings and are necessary for the function of the church/ministry.

Q: Who decides which Director or Board member may sign checks?

A: The Board of Directors, including the Executive and Managing Directors, vote for the decision and record the vote in the minutes.

Q: Is it possible to take the "parsonage" off the tax rolls if the church/ministry owns the property?

A: No property ever comes off the "tax rolls". Property may be exempt however, if it can be proved that the property is used exclusively for religious purposes. This must be checked out with the local tax authority for each requirement.

Q: What type of "income" may the church/ministry receive without reporting obligations?

A: The church/ministry may receive any form of donations. It may also receive any form of "passive investment" such as: Real Estate, Stocks, Bonds, Mortgages or Bank Interest. It can "sponsor" any kind of fund raising events.

Q: Does the church/ministry have to file a tax return to the state or federal government?

A: No. Not unless anyone can find any law which requires it to file, and I have never been able to find any law.

Q: What happens to the church/ministry's assets when a Director dies?

A: The church/ministry never dies. Its property is still owned by the church/ministry. However, minutes recorded by the Board of Directors may appoint another Director or anyone else to take the place of the Director who died. The church/ministry should have within its recorded minutes directions as to what will happen to the assets when this should happen.

Q: Does a Director have to put all of their property into the church/ministry?

A: Anyone can put all or none - or as little as they want into the church/ministry's name. However, if any Director takes the vow of poverty, they should place everything into the church/ministry, give it to their spouse, or donate the property to anyone of their choice.

Q: How does one prove contributions/donations to the church/ministry?

A: They should write a check from their personal checking account for the amount each month. Then at the end of the tax year, photocopy both the front and back of the checks and receipts. Attach the photocopies to your copy of Form 1040.

Q: How should any check be made out?

A: Pay to the order of: Name of church/ministry.

Q: How should the checks be endorsed?

A: Write the name of the church/ministry, then state "For Deposit Only."

Q: How many people can be members of the church/ministry and how few?

A: You must have at least two for every church/ministry. You may have as many members in the church/ministry as you want.

Q: Can a Director for a church/ministry be a Director of another church/ministry?

A: Yes. There is no law for or against being a member or director for as many church/ministries as you want.

Q: Can the church/ministry pay for trips, (vacations) food, entertainment, clothing and other property that a Director uses or takes?

A: Yes. However, the minutes must reflect the vote of the Board for payment.