Transcript Church Financial Guidebook supplement

What the Guidebook Doesn’t Tell You
California law and other important
issues that affect your Church
Copyright 2011©
Here is What the IRS Says
• You are a 501 (c)(3) business http://www.ttlaw.com/lr-04.htm
• Focus of organization's purpose must be to
benefit the community or society as a whole,
not just the organization's members and their
families or other select individuals.
• A 501(c)(3) organization may not devote a
substantial part of its activities for lobbying (try
to influence) purposes. (section 2A.1)
Four Things the IRS Will Come After
the Church For
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Nonpayment of employment taxes.
Embezzlement.
Political issues.
Nonpayment of unrelated business income
(UBIT).
California Tax Issues
Federal
California
941 (quarterly) and 944 (annually)
DE 9 (quarterly) and DE 7 (annual)
W-4
DE 4
1099
DE 542 (independent contractor) w/in
20 days
W-2 (Feds will send to state)
DE-1NP w/EDD: w/in 15 days after paying
wages to an employee
W-9
DE 34 w/EDD: w/in 20 days of new hire or
rehire
I-9 not filed with government; kept on file
at church
FTB 3500A w/ Franchise Tax Board –
one-time filing
592-B w/ CA out-of-state speaker: 7% of
wages or honorariums paid over $600
California Statement of Information
• Filed every other year.
• Must notify them if you move – they do not
forward form.
• Church is suspended if you fail to send in form.
• Effects of Suspension: Corporation prohibited
from
– transacting business
– Answering a lawsuit filed against it
– Initiating litigation
– Protecting and preserving its name
California Statement of Information
• Any contract executed by a CA suspended corp. is
voidable at the demand of the other party.
• Any person who attempts to use corporate privileges
while suspended is subject to fines and/or
imprisonment
• Only exceptions: Name change by amendment to
articles of incorporation
• Apply to Franchise Tax Board for tax-exempt status
• Suspended corp. must pay taxes and file tax returns
even if no money is earned
• STAY UP TO DATE: http://kepler.sos.ca.gov
Contributions
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Cash (check, debit card)
Securities
Real estate
Life insurance
Personal property
Charity auction or bargain sales
Gifts are made at the point of “irrevocable
giving over” (Exodus 29)
Not Contributions
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Service
Use of property
Gifts made to individuals
Private school tuition
Investment Considerations
• Which types of investments are acceptable risk to the church?
• Who will administrate the funds – a person or committee?
• What percentage of the total funds will be invested in the stock
market?
• Can the broker be a member of the church? (I strongly advise
that the broker not be a member of the church because of
conflict of interest.)
• What ethical standards will guide the church's investments?
Will the church invest in alcohol, tobacco, gambling,
pornography or abortion?
• What documents will guide the actions of the investment
committee?
• www.yourchurchmatters.com for Policy and Procedures
manual.
Budgeting Process
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Values, Mission and Vision statements first.
One- two- and three-year goals.
Action plans.
Answer the questions.
Budget and Stewardship Promotion
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Budget promotion packets
Tracts
Brochures
Videos
Testimonies
Podcasts
Twitter and Facebook
Budget and Stewardship Promotion
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Bible studies (time, tithe, talent, touch)
Personal money management seminars
Will and trust seminars
Investing in insurance seminars
Trustees
• Establishing and reviewing procedures for the
church's financial management along with the
treasurer.
• Represent the church in legal matters.
• Serve as legal guardians of all church property.
• Give input and financial advice to the stewardship
committee and pastoral team as needed.
• Execute bank notes, deeds and other legal
documents after receiving approval from the
church body.
Trustees
• Examine quarterly financial statements along
with the treasurer.
• Investment policy and oversight.
• Fulfill the laws of the State of California while
serving as trustee.
• Assist in the awarding of contracts for work that
must be done to improve or repair church
buildings or property.
• Written job description gives continuity
What questions do
you have for me?
www.csbc.com/financialmatters
559 287-7840 cell
559 256-0858 direct line
[email protected]