Possible New Reporting Requirements for Churches

As noted in an earlier posting, the Religious Policy Commission issued a report to Senator Grassley (R-IA) in December 2012 in which they made recommendations for Congressional and IRS oversight over churches and religious organizations. The following new requirements were recommended for churches. First, the largest churches should participate in a survey of executive compensation so that comparable data can be gathered and reported to the public. Names of churches and staff members would not be identified – only the summary data. Secondly, the IRS should provide guidelines for when it is appropriate for charities to use compensation data from the commercial sector when setting executive compensation. Thirdly, churches should be required to disclose the amount of housing allowance provided to ministers on the W-2 or 1099. The above recommendations for added oversight address public concerns about excessive compensation paid to ministers; however, there are some challenges with the recommendations. For example, how are the “largest churches” going to be identified? Such an identification will require that churches disclose their size - perhaps in revenue, or membership, or both. Furthermore, those who are determined to be the largest will have to disclose compensation information to the survey organizer.