Church

When most people think about what a “minister” is, a certain picture or church experience may come to mind. However, for purposes of employment law, the term “minister” has a broader definition than just the person who preaches a sermon or presides over a wedding or funeral. For purposes of employment law, employees who are considered “ministers” trigger First Amendment protections for their position that prevent the government from forcing a religious organization or church to retain an unwanted employee. Read More

Section 7611 of the Internal Revenue Code is known as the “Church Audit Procedures Act.” It governs the conditions under which the IRS may initiate a church tax inquiry or examination. Naturally, given the heightened protection of churches under the US Constitution, the IRS is limited in when it may investigate a church and it must demonstrate specific criteria before it may even take the first step in launching an investigation.

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Employee business expenses in the religious organization context are usually treated the same as employee business expenses in any other business context. The IRS treats the way these expenses are taxed in different ways depending on the means by which they are paid: whether through an accountable or a non-accountable plan. These different types of plans serve to differentiate whether the payment made for a given set of expenses is considered to be part of an employee’s income.

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The question whether your church should withhold your minister’s income tax depends on whether your minister is considered an employee of your church or an independent contractor.  The answer to this question is important because a church is required by law to withhold income taxes from its employees while independent contractors are considered self-employed and withhold and pay their own taxes.

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With the passage of the CARES Act and the Small Business Administration’s guidance that churches and ministries are eligible to apply for Paycheck Protection Loans (and other forms of disaster relief), many churches and ministries are asking whether they should apply for government aid.

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Tax exemption is one of the keystones of church law, with its foundations in the First Amendment to the US Constitution. Yet federal tax law gives the IRS  some latitude in determining what activities are permissible for a tax exempt entity when it comes to lobbying.

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When a church director (typically a director is someone responsible for governing the church, such as a board of elders or other church board) is a volunteer, the law of Arizona has a provision to protect them from personal liability in lawsuits, whether a lawsuit is filed for valid or for invalid reasons. The law is Arizona’s Volunteer Protection Statute.

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The federal government recently passed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES” Act. This Act is the latest in a series of stimulus packages designed to boost the economy during the pandemic. The CARES Act contains help for businesses but that also applies to any organization, including churches, nonprofit organizations, and other charitable organizations.

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Any church has its secrets. I don’t mean the “skeletons in the closet” kind. But spiritual life can be a highly personal and even private affair. Pastors and priests come into contact with some highly sensitive information, and they are sought out to provide spiritual counsel and direction in sensitive and confidential situations. The church itself is likely to be privy to information about its members that these individuals may not want shared. In certain circumstances, a church can be held liable for invading privacy. It is therefore important that a church take measures to ensure that certain information is kept confidential.

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Passed in 1997, the Federal Volunteers Protection Act (VPA) was crafted with the purpose of limiting the amount of legal and financial liability that volunteers to nonprofit organizations—including unpaid Directors—might have otherwise been subject to for harms caused in the course of their service. In drafting the Act, Congress made explicit its goal to “promote the interests” of churches and nonprofits by providing“certain protections from liability abuses related to volunteers serving nonprofit organizations and governmental entities” (42 U.S.C. § 14501). The passage of the Act was in response to a decrease in volunteerism in society at large, which Congress attributed in part to a belief that church and ministry volunteers were facing financial harm because they were judged to have caused some sort of harm to others in the course of their volunteer efforts.

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