Integrity & Finance in the Church Pt.1

Here’s something to consider, I wonder how many Churches struggle financially because they may have intentionally or unintentionally violated Romans 13:1-7? God does things decently and in order, He will not bless a Church whose financial books are not in legal compliance with IRS guidelines, and most importantly right alignment with The Kingdom. It says to God that His Word only has clout when it benefits us, and is advantageous to our desires. Unfortunately, there are pastors and churches that have become infamous (disreputable) for not doing what is right, complying with IRS (federal) and State requirements when it comes to finances, this negatively impacts The Kingdom. Just because we (the church) haven’t been audited, or got caught doesn’t mean we are right; God knows, and he will not bless mess. Integrity in our finances is just as important to God, as our love for one another.

Many churches fail to fulfill the terms and conditions needed for exclusion from taxable income. Churches are tax-exempt organizations, by having this this status it limits some of the business operations of the church. Federal tax laws, and some State laws regulate the financial transactions of the church. Since tax exemption involves both federal and state governments, tax exemption is a privilege rather than a right. We are expected by God as representatives of God, Ambassadors of Christ, and citizens in The Kingdom to do what is right as indicated in Romans 13:1-7.

There are four areas that churches frequently violate federal laws, when it comes to a non-profit 501(c)3. In this Blog, I am going to mention one of them, “Reasonable Compensation”. There are pastors, ministers, and in some cases staff that receive compensation within the acceptable range of the IRS and courts, and there are others that receive far below a reasonable amount. But, there are pastors, ministers, and in some cases staff, however, that receive compensation far exceeding what the government and courts would consider a reasonable amount. The IRS defines compensation as all benefits received by the minister, taxable and nontaxable. This includes salary, housing allowance, fringe benefits expense reimbursements, gifts, and bonuses.

It is vitally important that churches determine reasonable compensation for all individuals employed at the church, this includes the pastor(s), and it should be done by an independent board or committee. No family members or employees who work under the pastor can participate, this is to prevent conflict of interest, and for integrity.