Governance Issues

Temporarily Restricted Net Assets

As I began preparing for the Church's 2007 audit, I encountered some difficulties in calculating the activity for the temporarily restricted contributions. Over the past year our Church has launched a building campaign and we are tracking the donor contributions, expenses that have been incurred and the related third party debt that has been obtained to help finance the early phase of the construction.

Schedules K to N for the New Form 990 – (5 of 5)

Finally, below is a summary of the final four schedules that may need to be attached to the new Form 990.

New Schedule K was added for organizations with an outstanding tax-exempt bond issue greater than $100,000. The schedule covers information previously required on the balance sheet. In addition, the use and investment of proceeds and relationships with outside advisors will be reported.

Schedules J and R for the New Form 990 –(4 of 5)

The new Schedules J and R will cover compensation and related organizations in more detail than did the old Form 990.

Mega-Church Issues (2 of 6)

During the NACBA conference I briefly attended a session facilitated by Glenn Woods and Bill Gruenewald that discussed issues relating to Mega-Churches. One of the key issues for churches of all sizes is record retention.

IRS Issues Guidance for 501(c)3 Organizations and Politics

IRS Revenue Ruling 2007-41 issued June 1, 2007 examines prohibitions for political campaign intervention by churches, ministries and other charities. The ruling provides scenarios to illustrate considerations that should be made in determining whether a 501(c)3 organization has participated in a political campaign for a candidate running for public office.

Additional information for churches and other exempt organizations is included plus a copy of IRS Publication 1828. If you have any questions, please don't hesitate to contact us.

Nonprofit Organizations Defined

Churches are classified as a charitable organization under the IRS code. They are defined as a 501(c)(3) organization and they are not required to apply for an exemption, (Form 1023) with the IRS. However many churches voluntarily elect to apply for exemption.

Sunday School

On a recent trip I met a young passenger who discussed the "fee" for Sunday School. When he found out that I taught Sunday School...he said "When you go to Sunday school, you have to pay a dollar".

I laughed out loud, or (LOL) in teenage terminology.

and yes, Sunday school is a place where sometimes you pay a dollar.

Schedules F to I for the New Form 990 –(3 of 5)

Below is a summary of the fifth through ninth Schedules that may need to be attached to the new Form 990.

New Schedule F is added to report foreign activities. If a non-profit has a foreign bank account or a foreign office or has employees or activities outside of the U.S., they will disclose the activities on this new form.

State of the Church - 2007 Barna Report

According to David Kinnaman and the MinistryToday magazine, every year, The Barna Group examines the state of the church, and most Americans align themselves with Christianity. The following are interesting elements of allegiance:

* More than 4 out of 5 adults identifies as a Christian, equating to about 185 million Americans.

* Vast majority of the nation's population has attended church regularly as some point during their life.

Schedules A to E for the New Form 990 – (2 of 5)

My next four blogs will be a summary of the Schedules that may need to be attached to the new Form 990. Remember, these are still in draft form and the IRS is taking comments from the public until mid September. Draft schedules can be viewed at the IRS website .

New Schedule A will replace the current Schedule A, Part IV. All 501(c)(3) organizations that file a 990 must file a Schedule A. The redesigned schedule focuses on public charity status. This schedule will replace the 5-year advance ruling process currently required on Form 8734.

There are no proposed changes to Schedule B.