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Sale of Church Property

From the April 2016 newsletter edition.
Category: Compliance

Many churches, like other corporations, have the right to own property. The right to own property include the right to dispose of property. Some property transactions occur in the normal course of business. This may include the sale of books, tapes or trading a church vehicle. Occasionally, a church may have a need to dispose of a substantial portion of its property. This kind of transaction must be handled differently than sales in the normal…

Is Your Church Banker Talking Tough?

From the July 2015 newsletter edition.
Category: Compliance

If your church has recently made an application for a bank loan, you may have noticed a different tone from your banker. Your banker may be asking for more information than the last time you applied for a loan. Some of the terms may seem a bit more burdensome. There is a good reason why your banker may be pickier this time around. The financial turndown in the economy has left banks and other financial…

Churches Subject to Copyright Laws for Music

From the July 2015 newsletter edition.
Category: Compliance

Music can be an integral part of a church’s ministry. Music inspires the members of the congregation with stirring lyrics and familiar melodies. For many churches, music is an essential part of the worship service experience. Some churches find it appealing to play popular songs that are performed on the radio by recording artists. Musicians find this to be an effective way to connect with the listeners. Music may also be included in other aspects…

Church Organizations Could Lose Tax Exemptions

From the April 2015 newsletter edition.
Category: Compliance

Churches are generally exempt from paying taxes on their related income. As such, churches are not normally required to file an income tax return. For some church organizations, the Internal Revenue Service (IRS) requires an information return. Some church activities may be incorporated as separate corporate charters. Activities such as recreational centers, daycares, housing projects and other community operations may be organized as their own legal entities. Because there is a connection to the Church,…

Church Loans Come With Strings Attached

From the July 2014 newsletter edition.
Category: Compliance

If your church ministry needs to expand, you may be feeling growing pains. This is the time many churches decide it’s time to build a new facility. Perhaps, your church is considering the purchase of new equipment or another vehicle. If your church needs a loan to finance its growth, you should be aware of some common covenants found in bank loans. A loan covenant is a promise. The promise most people think of is…

Reporting Child Abuse Is A Church Duty

From the April 2014 newsletter edition.
Category: Compliance

Churches come into contact with children in many ways. Children attend regular church services as congregants and participate in some of the ministries. Some churches have daycares and special activities for its young members. Children may be found involving themselves in church events throughout the week at various times. Most adults and parents want the best for our children. We want our children to be happy and safe. The unfortunate fact is not all children…

When Churches May Stand Their Ground

From the January 2014 newsletter edition.
Category: Compliance

Some churches have security ministries to protect their members and property. These ministries often patrol the church grounds during services, provide security for the pastor and watch over the collections of money. Given the recent occurrences of incidents, churches are justified to consider the risks they face. Security personnel may include volunteers and/or employees. Employees may be on the church’s payroll or contractors through a professional security firm. Some security personnel may only carry a…

Churches Face Child Care Laws

From the July 2013 newsletter edition.
Category: Compliance

A popular activity for many churches is the operation of a child care facility for its members and the community. Depending on a number of factors, a church child care facility may be subject to specific North Carolina laws. It is important for church leaders to know the laws and ensure its child care is in compliance. To understand the law, churches must know if the facilities they have are considered child care programs. In…

Churches Have Duty to Inspect Bank Statements

From the October 2012 newsletter edition.
Category: Compliance

If your church has a bank account, you likely receive a monthly statement. These statements provide a list of transactions, your closing balance and other activities that have occurred during the month. Bank statements are not infallible. Sometimes mistakes occur. In some instances, the mistake is caused by the bank’s negligence. For other occasions, errors happen due to a church official’s fault. In a few cases, funds may be misappropriated by an insider. For these…

Private Benefit Rule Applies to Churches

From the July 2012 newsletter edition.
Category: Compliance

Churches must operate in such a way as to not violate their tax exempt status. Churches that operate as 501(c)(3) organizations must follow specific rules to keep their tax exempt designation. One of the rules that apply to these churches is the Private Inurement (Benefit) Rule. The purpose of the Private Inurement Rule is to make sure that tax-exempt organizations are not misused for private interests. As a result, churches should be prepared to prove…

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