John served as the Senior Pastor of the little Church in rural Connecticut. Their attendance rarely exceeded 100, yet they were proud of the work throughout the year. Their small Church structure and modest property may not have been that of the mega-ministries, but Pastor John and his congregation were proud of it and ensured that it was maintained in pristine condition.

Unfortunately, one Sunday, the Pastor had someone go to the local supermarket for some grape juice for their morning communion service. On the way to the store, the driver began texting and had a terrible accident. Everyone was grief-stricken because of the damage done to lives and property. However, one injured sought recompense from the Church (since the texting driver was on Church business).

It looked as if this would be the demise of Pastor John’s ministry and result in the loss of the Church property to pay the lawsuit. But Pastor John and his Church were covered.

Chitwood’s Cell Phone Policy Saves the Day

Almost six months prior to the accident, Pastor John had attended a Church Management Conference. There he engaged our services and purchased the Cell Phone Protection Policy. He wasted no time getting the licensed drivers in his Church to sign the policy.

Since this particular texting driver had signed the policy, the Church was free from any damage claims sought by the injured parties.

It’s Not What You Know That Will Hurt You

Pastors and Church Leaders all across the USA never think scenarios like those mentioned above could happen to them. That is naivety personified.

Just because you or your Church has not been subjected to this kind of action or any other legal activity does not mean it cannot happen quickly. To assume your Church will be spared from any type of lawsuit or investigative action demonstrates that you do not know the world in which we live.
As my grandmother used to say, “An ounce of prevention is worth a pound of cure.” In other words, it is better to have it and not need it than to need it and not have it.

As a blessing to Pastors and Churches across the USA, you may download this Cell Phone Protection Policy via your e-mail address. Click on this link and follow the instructions.

We Are The Best

For 80 years, Chitwood & Chitwood has been providing oversight for thousands of Churches across this great nation. At our Church Management Conferences, we teach what Pastors and Church Leaders should know and provide them with resources to protect their Church, not only from the IRS but also from lawsuits in this tort-focused society in which we live.

Every Pastor, Pastor’s Spouse, and Church Leader must attend the next Church Management Conference. It is not what you know that will hurt you—it is what you don’t know. To register for a conference nearest you, visit us at www.cmtc.org or call 800-344-0076. You will be glad you did.

Over the years, our Government and the Internal Revenue Service (IRS) have stripped away our allowable deductions for income tax purposes. The supposed reasoning was to streamline the tax code and bring more revenue into the Government coffers. However, the tax code has not been streamlined or simplified, and regardless of the amount of revenue, the Government continues to outspend income.

One of the few deductions remaining for the average taxpayer is that of Charitable Contributions. Churches depend on the money donated to them on any Sunday to offset their weekly budgets. The generosity of so many who contribute to Churches and Ministries is motivated by the fact that they are still allowed to deduct those gifts from their annual income tax return.

With all of this said, we need to be aware of some issues.

Do Not Earmark Donations for Specific Individuals

Private Inurement is a “no-no” for Churches. The Inurement clause states that Churches are not allowed to benefit private individuals. According to Eric Roberts from the IRS, if anyone earmarks a donation for a private individual, the donation will not be permitted.

The Church counting office or Treasurer should have a rubber stamp that declares, “Not for Contribution Credit,” and every donation earmarked for benefitting an individual should be clearly documented as such.

Giving donation credits to individuals who are not authorized may invoke civil and criminal penalties to the responsible parties of that particular Church. Do Not Test the Waters, or Seek to Circumvent This!

Do Not Allow Bartering

A common practice within Church circles is people, especially Church members, who will buy items for the Church, donate them, and then want contribution credit. This practice may be costly for the Church and/or the individual.
Do not allow people to purchase flower arrangements to place on the pulpit for Sunday service and then want contribution credit. Do not allow them to buy supplies and equipment or donate time for contribution credit. Instead, have them donate the dollar amount of the item or supplies they want to give to the Church, and then the Church makes the purchase. This may seem a little asinine, but it will protect all parties, and the dollar donation amount (unless earmarked for the benefit of a specific individual) will be an allowable deduction.

If they insist on giving the item, instead of cash, only write a letter describing in its entirety what was donated. Do not place a dollar amount on the letter. Leave any amounts to be determined by the individual and their tax preparer.

Make sure that all donations are Tithes, Offerings, Mission Fund, or Building Fund. Do not think you can slip something by the IRS. They know what to look for on a tax return. Cheating on your donation credit will not reduce your tax liability enough to make it worth going to prison. “Give to Caesar that which belongs to Caesar,” and you will not have any problems.

How We Can Help

These and other “hot topic” IRS issues are discussed in-depth at our Church Management and Tax Conferences across the USA. After attending one, the Pastor and Church Leaders will have clear direction on what they can and cannot do. Pastor, Church Leader, Do Not Think you can do Church books without the instruction you will receive at one of these conferences.

This is why it is vital for each Pastor and Church Leader to attend the conference nearest them, NOW! Your procrastination may be the downfall of your Church and Ministry. Contact us today to register by visiting www.cmtc.org or call us at 800-344-0076. You will be glad you did.

Remember, for others, this is a job, but for us, “It is A Ministry!”

Pastor Jones called our office, upset that he had received a call from “the IRS.”
The individual who had called him told him that the IRS had deposited a refund into his bank account in error and that he needed to forward that refund to them immediately.
The Pastor checked his bank account to discover an actual deposit had been made, but how could the IRS deposit to his account in error when he had not given his bank account number to the IRS?

Potential Cyber Scams Are Not New

What had happened to Pastor Jones was nothing but an old tax scam with a new
twist. For years, innocent people have received calls from someone claiming to be from the Internal Revenue Service (IRS). Some of these calls have threatened the individuals with impending warrants for their arrest due to money the caller claims the individual owes the Federal Government.

Because we provide Church Management Counsel to Pastor Jones and his church, we immediately researched the issue and discovered that someone had fraudulently obtained his bank routing and account number. The scammers then filed a false claim with the IRS and deposited it into Pastor Jones’ account. They intended to get Pastor Jones to access the money, send it to them, and they would be free and clear while Pastor Jones would have ended up with a bill for the claim from the IRS plus penalties and interest.

What Everyone Should Know About Tax Scams

Please be aware that the IRS will not call anyone and tell them that a warrant is issued. As a matter of fact, if you will call back to the number they provide and call their bluff, they hang up immediately. As for the new twist on the scam mentioned above, IRS spokesman Eric Smith provided us with the following steps to take should anyone receive a call similar to Pastor Jones.

Mr. Smith suggested that no one return calls to the scammers, and we agree. We know our business, so we did this to bait the scammers. That is why they immediately disconnected.

Appropriate Steps to Take

If money that you were not expecting was deposited into your account from the
IRS, you should take the following steps:

1. You will need to return the money—just do not return it to those who have called
   you.
2. Close your bank account and contact your tax preparer.
3. To return the fraudulent refund, go to www.irs.gov and search for “Topic
   Number: 161—Returning an Erroneous Refund—Paper Check or Direct Deposit.”
   Then follow the steps provided in that article.
4. If it was deposited into your bank account, contact the “Automated Clearing
   House” (ACH) department of your bank. See if you can have the deposit returned
   directly to the IRS. You must also call the IRS to explain why the refund is
   returned. Individuals should call 800-829-1040. If you are a business, call 800-
   829-4933.
5. If the erroneous refund came to you as a paper check, write “void” on the back
   where you would normally endorse it. Then send the check to the IRS location
   based on the city listed on the refund check. Include a note explaining why you are
   returning the refund. Make a copy of the check and return the original via
   certified mail to be on the safe side.
6. It is imperative that you return the money as soon as possible. By law, interest
   may have accrued on the fraudulent refund.

Mr. Smith further advised that these types of scams are another reason why no
one should procrastinate in filing their tax returns. If you have fallen for a tax scam, read the IRS’ “Taxpayer Guide to Identity Theft” at www.irs.gov.

Why You Need Us in Your Corner

Chitwood & Chitwood is the number one Church Management and Accounting firm in the nation. With 80 years of experience, we are savvy to everything that Churches and Clergy may encounter.

We file more Ministers’ Income Tax Returns than anyone and get Ministers back an average of $2000 more than other firms. The reason is we have been doing it longer, and we know Ministers’ benefits that others do not know.
We encourage you to contact us if you have not filed your return or if it has been prepared, send it to us for review before filing it. We will review it to see how much we can save you.
At our live Conferences all across the nation, we cover this and many other topics
that every Minister and Church Leader should know. To register for an upcoming Conference, visit us at www.cmtc.org or call 800-344-0076. It will be the best investment you and your Church can make this year.

Andy Williams recorded a great classic many years ago that began like this:

It’s the most wonderful time of the year
With the kids jingle belling
And everyone telling you “Be of good cheer”
It’s the most wonderful time of the year
It’s the hap-happiest season of all
With those holiday greetings and gay happy meetings
When friends come to call
It’s the hap-happiest season of all.

There is no other holiday season that has the meaning as that of Christmas. As Christians, we use this time to celebrate the birth of our Lord and Savior, Jesus Christ – the fact that God Himself would take off the cloak of divinity to cloak Himself with that of humanity, only to later die for the sins of all mankind.

As you enter this joyful sacred time of the year remember the reason for the season, but also use it as a time for reflection and prayer for those who may be less fortunate than yourself.

Not Everyone Enjoys Christmas

While Christmas is the most wonderful time of the year, for many it is a time of sadness and despair. According to statistics, more people experience depression/despondency during this great holiday season, than at any other time of the year. The time that we use to celebrate the greatest birth ever on this planet, is ironically the time for more suicide attempts.

Maybe the reason for the depression is because some are alone and have no family with which to share the joyful time. I know this is true in many nursing homes across our nation. Our elderly are herded into them by kids who do not want or cannot afford the responsibility of caring for an aging parent. Unfortunately, many of these nursing home residents seldom, if ever, get a visit from those for whom they have given their lives – their families.

Some may suffer depression because their finances did not afford them the opportunity to give everyone the gift they really desired to give – causing not only a feeling of depression, but also inadequacy. If this is the reason, it really testifies and condemns that in which we have evolved this great time of year –commercialism, rather than spiritual awakening and renewal. 

Jesus’ birthday is the only birthday in the world where gifts are given to everyone else but the person whose birthday it really is.

What You Can Do to Ensure the Season Remains Joyful for All

When I have shared my thoughts about this with others, they usually say something like: “But Jesus is not here for us to give Him a gift.” My response is, “Au Contraire” (French for “On the Contrary).

Jesus may not physically walk this earth today, but His Body – His church does. Many church people spend God’s tithe and offering on “Black Friday” shopping sprees, rather than give it to the church. Why not, in addition to your tithes, this year give a sizeable offering to God’s house for use in the ministry of our Lord. Your gift to Him should exceed the amount you spent on others – after all, no one has ever given you what He has-eternal life.

Another gesture would be to find someone less fortunate than you and do something special for them. Do not consider what they can do in return for you. If your gift giving is predicated on what others are going to give you, you haven’t given anything – all you have done is swapped, or traded. It is never a gift when something in return is expected (this does not mean that something cannot be given to you – it only means you do not expect or demand it).

A real gift is giving to someone who cannot give back.

In Closing

Chitwood and Chitwood wants to take this moment to thank every church, ministry, and minister for the opportunity to take the burdensome load of bookkeeping and IRS reporting from you.

We do not take our role lightly. For us it is “A Ministry – Not A Job!”

On behalf of myself and all of our staff, let me say to each of you, Merry Christmas. We pray that it will be one of great joy for you and your families. 

Your church might have reduced face-to-face administrations and exercises in light of the COVID-19 epidemic.  Nevertheless, there is no halting your church’s finances, contracts, and other monetary commitments. 

Astute church pioneers will need to be proactive and do everything they can to help their parishioners stay associated with the church, overcome this monetary crisis, and feel welcome to keep up with monetary assistance for the church. 

No activity or practice will guarantee the monetary steadiness of your church.  Nevertheless, deliberately setting up sufficient components will give a solid structure to manageable financial giving. 

Here are a few thoughts. 

1. CARES Act
The Paycheck Protection Program of the U.S. Government’s Coronavirus Relief Package offers credits to private companies (counting churches) to assist with keeping laborers utilized during this crisis. Here is the kicker: The credits do not need to be reimbursed as long as your church follows intently some patently straightforward rules.

2. Internet giving
In the event that your congregation has not yet gotten into on the web and computerized giving, the COVID-19 emergency gives a phenomenal impetus to do as such. In case you are as of now offering computerized giving, consider extending the alternatives. What administrations do your giving-administration organization offer that could furnish your gatherers with considerably more freedoms to give? The guideline is this: The simpler you make it for individuals to give, the more probable they will be to give. 

3. Incorporate “offering” through virtual services
Many churches are — shrewdly — going to virtual and live streaming services while limitations on movement and social events are in place. Strikingly, “offering” a piece of assistance is regularly discarded in the advanced form. This is a mistake. During the virtual service, incorporate an “offering second ” where you recount a story, clarify a service, or spotlight the mission of the church, and then welcome people to give a donation. Then, remind individuals how they can give. Utilize their focus by letting them know the church’s location to send checks, a website for internet giving, or a phone number where they can message or telephone in a gift and give them an opportunity to react, maybe by playing uncommon music. 

Don’t pressure people to give. Recognize that certain individuals who have lost positions essentially can not bear to give at the moment. Tell them that is alright and stay away from the “alarm card.” The frenzy card might get individuals to give only once, and not continue in the long term. Furthermore, over the long haul, it harms trust in the service and the giving of monetary contributions. 

4. Correspondence

Correspondence is perhaps the primary approach to church giving and not simply via those delicate suggestions to keep the donations streaming. Indeed, asking for monetary help should represent a small portion of the correspondence you send. Why? For some believers, Sunday service is their essential association with a church.  Communications through an assortment of media help members remember the church. When people feel appreciated, they are bound to react more positively to a solicitation for help. 

5. Snail Mail Requests

Advanced giving alternatives are a requirement for the 21st-century church.  However, a significant number of our more seasoned individuals are not technically inclined. Luckily, the U.S. Postal Service is still in business and will mail envelopes to any place you address them. An elegantly composed letter requesting that devotees make an ordinary or an exceptional gift will go far. 

Keep the letter energetic! Talk about the magnificent service that is occurring in the church and how the staff and members are proceeding with God’s main goal, even in troublesome conditions. Feature whatever web-based service prospects there are occurring within the church. Make it simple for them to give by including a post-marked, stamped envelope, so they can easily send in their checks. What’s more, in light of the fact that numerous seniors do utilize PCs and cell phones, audit your church’s computerized giving alternatives, as well. 

6. One-On-One Inquiring

The most probable individuals to give in a period of emergency are the ones who have the monetary ability to give as well as a solid obligation to the church. Who are these individuals? You should know: They are the ones who as of now give liberally. 

During this crisis, converse with the best ten or twenty providers and ask them for a unique commitment to assist with getting the church through the emergencies. As the head of the church, the minister or elder ought to in a perfect world be the person who makes the solicitation. 

Nevertheless, a regarded and believed head member of the church might also substitute. Even better, they could make the solicitation together! 

7. Request “Front-Stacked” Contributions

Each December as far back as you can recollect, many reliable individuals within the church have gladly and dependably made a considerable year-end gift. That is extraordinary! Yet, could the Joneses give their donation this spring all things being equal, during a time when your church dearly needs it? Welcome parishioners to make their contributions early. 

For further questions on how to keep parishioners giving during the COVID-19 crisis, please contact Chitwood and Chitwood at 423-892-4882 or find them online at chitwoods.com.