CPA's & Consultants Providing Business Insight To Churches & Ministries

Risk Standards - (1 of 6)

Just when you thought you knew exactly what your auditors needed, the American Institute of Certified Public Accountants decided to change the documentation requirements. The AICPA issued 8 new auditing standards that are designed to:

> improve the quality and effectiveness of an audit. In short, the standards force auditors to develop a more in-depth understanding of the client and its environment (including internal controls)

> provide for a more rigorous assessment of the risk of material misstatement of the financial statements and finally

Intermediate Sanctions (1 of 2)

Intermediate Sanctions allow the Internal Revenue Service (IRS) to assess excise taxes on excess benefit transactions that occur between a disqualified person and a 501(c)(3) or 501(c)(4) tax-exempt organization, as well as the managers who approve these transactions. A disqualified person is someone who “exercises substantial influence” over the organization, as well as their family members. These excise taxes are not paid by the organization and must be paid by the disqualified person and managers involved in the excess benefit transaction.

Vehicles Contributed to a Church – (4 of 4)

If a church or ministry receives an auto or other vehicle and the claimed value is greater than $500, there are different filing requirements than discussed in the previous post. You still need all the donor and vehicle information listed previously, however the additional documentation is more complicated.

IRS Releases Final 2008 Form 990 for Tax-Exempt Organizations - (1 of 2)

In late December the IRS issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.

Contribution - When to Record?

The following is a question that we have received from a controller of a large church in the north east.

Question - During the Watch-Night service, Bishop called for a cross-over offering that was taken after 12AM and the envelopes were dated 1/1/08. When is the contribution recorded? 2007 or 2008?

Answer - The contribution is recorded when delivered to the Church. The cross-over offering was delivered after 12AM and therefore should be recognized in 2008.

Charitable Contributions - Requirements - (1 of 6)

Contributions are typically the most significant source of income for a church or ministry. In order to be a deductible expense for a tax payer the contribution must meet six requirements. Our post today will discuss the first requirement:

Vehicles Contributed to a Church – (3 of 4)

Churches or ministries that receive a motor vehicle, boat or airplane contribution in excess of $500, should prepare Copy A of Form 1098-C. The form should be retained and filed with the IRS by February 28, 2008 along with a 1096 transmittal form. The Form 1096 must show the total number and dollar amount of all such 1098C (copy A forms) for the year. Remember, do not combine any of the under $500 donations in the 1098C-copy A totals.

The Picturesque Staff - (Mega-Church Series)

Personnel continue to be one of the greatest resources of a organization. Hiring the right person for the right position is important, however retaining that individual continues to be a strong challenge for a number of organizations.

The following are examples of policies directed for training, development and retention:

·Provide personnel with clear, current job descriptions and the resources they need to produce quality work.
·Support the education, development of and opportunities for growth and advancement of personnel.

Vehicles Contributed to a Church – (2 of 4)

If a church or ministry receives a vehicle valued greater than $500 and it is not sold, you must certify that it is used substantially in the church’s regularly conducted activities. Or, you must certify that the vehicle is to be transferred to a needy individual, at below value, to further the church’s charitable purpose. On Form 1098-C, a detailed description of the vehicle’s use must be supplied. Do not check box 7 or your donor will be limited to a $500 donation. The church/ministry must supply Copies B & C to the donor within 30 days of the contribution if no sale will take place.

The Picturesque Staff - (Mega-Church Series)

Maintaining and motivating staff is a challenge for most organizations, including churches. Having proper employment policies, staff training/development and retention plans are critical areas for churches.

The following are examples of employment policies that should be considered and implemented by non-profit organizations:

·Comply with all federal, state and local employment laws when hiring and employing personnel, including withholding and payment of payroll taxes. See IRS Publications 505 and 517 relating to payroll issues for employees and ministers.