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What Would Repealing the Johnson Amendment Actually Mean for Churches?
How a repeal of the amendment that prohibits political endorsements could affect pastors and churches.
What Would Repealing the Johnson Amendment Actually Mean for Churches?
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During this year’s election season, many churches and pastors have likely heard that Republican presidential nominee Donald Trump has indicated he is in favor of repealing the Johnson Amendment, which governs the political activity of churches. The repeal of the Johnson ...

Interview: The Definition—and Danger—of 'Inurement'
Richard Hammar offers a definition for a common mistake that can have serious consequences.
Interview: The Definition—and Danger—of 'Inurement'
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While you may have heard the word “inurement,” you may be unsure of its definition. In this interview, Richard Hammar provides a definition of inurement.

Could inurement have implications for a church’s tax-exempt status? Hammar addresses instances where ministries ...

How Long Should I Keep Income Tax Records?
Know what to hold on to after your form is sent in.
How Long Should I Keep Income Tax Records?
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You must keep records so that you can prepare a complete and accurate income tax return. The law does not require any special form of records. However, you should keep all receipts, canceled checks, and other evidence to prove amounts you claim as deductions, exclusions, or ...

Meeting IRS Requirements When a Pastor Runs for Office
How one church navigated the tricky issue of political involvement.
Meeting IRS Requirements When a Pastor Runs for Office
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With the 2016 presidential election coming up, many churches and ministry leaders may wonder what they can and cannot do when it comes to politics. Is there a line, and, if so, when do you cross it?

Churches are required to remain impartial toward candidates, yet church leaders ...

The Causes and History of Church Property Tax-Exemption
A podcast interview with Frank Sommerville reveals the long, world history of religious exemption.
The Causes and History of Church Property Tax-Exemption
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Why are churches exempt from property taxes? When was this decided in the United States and by whom? What is the history of tax-exemption behind the decision?

Frank Sommerville, an attorney, CPA, and editorial advisor for Church Law & Tax, discusses the answers to those ...

IRS: Special Church Audit Protection Law Applies to Employment Tax Inquiries and Examinations
How this recent announcement affects churches.
IRS: Special Church Audit Protection Law Applies to Employment Tax Inquiries and Examinations
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The Internal Revenue Service recently announced that it will apply the special church audit protection rules in Internal Revenue Code Section 7611 to church employment tax inquiries and examinations. Prior to the recent announcement, the IRS’s official position was ...

Q&A: Does the Affordable Care Act's "Cadillac Tax" Affect Churches?
This confusing topic is gaining media coverage. Here's what churches should know.
Q&A: Does the Affordable Care Act's "Cadillac Tax" Affect Churches?
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Media coverage is increasing with respect to the Affordable Care Act's so-called "Cadillac tax." Even though it now doesn't become applicable until 2020, what do employers—including churches—need to know about this tax?

It's a 40 percent tax, ...

After the Same-Sex Marriage Ruling, What Legal Rights Do Pastors, Churches Have?
Understanding the officiating of ceremonies and the use of buildings for weddings.
After the Same-Sex Marriage Ruling, What Legal Rights Do Pastors, Churches Have?
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In late June, the US Supreme Court ruled that same-sex couples have a legal right to marry, and many pastors are wondering what this means for their work and their church. Richard R. Hammar, a well-known attorney specializing in legal issues for churches, helps clear the ...

Q&A: Tracking Receipts
Why one church has only one credit card
Q&A: Tracking Receipts
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Church business administrators are sometimes given the responsibility of asking pastors or other church staff for receipts from purchases for the church that they made on church credit cards. Some have found thatusing phone apps has helped, but what have you found to be the ...

Q&A: Are Housing Expenses Paid Directly By a Church Nontaxable?
Q&A: Are Housing Expenses Paid Directly By a Church Nontaxable?
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Some churches pay part or all of a minister’s housing expenses directly. Can such payments be treated as a nontaxable housing al­lowance?

It could be argued that by agreeing to pay for a minister’s housing expenses, a church is, in effect, designating a housing ...

Pastors Must Pay Taxes
Calling compensation a "love gift" doesn't shield it from taxation.
Pastors Must Pay Taxes
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In this audio interview with podcast host Tony Gill, Richard Hammar discusses misconceptions churches have about how tax law relates to pastors. For further insights into the issues covered in this interview, see Hammar's "Why Pastors Must Pay Federal Income Taxes" ...

Designating a Housing Allowance
Make sure you do it right.
Designating a Housing Allowance
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Many churches are lax in their housing allowance designations. Internal Revenue Regulation 1.107(b) requires that in order to be housing allowance, the amount must be designated as such pursuant to an official action taken in advance of the payment of the allowance by the ...

The Taxes Churches Have to Pay
Richard Hammar says expert guidance is needed to understand tax laws.
The Taxes Churches Have to Pay
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In this audio interview with podcast host Tony Gill, Richard Hammar discusses misconceptions many people have about how tax law relates to churches. For further insights into the issues covered in this interview, see Hammar's annual Church & Clergy Tax Guide.

IRS May Look Into Activities of 99 Churches
Agency appears ready to monitor church political activity again.
IRS May Look Into Activities of 99 Churches
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Details from a settled lawsuit in Wisconsin slowly continue to surface, giving a growing sense the Internal Revenue Service (IRS) is ready to resume monitoring political activities of churches, although questions still remain.

A letter sent in June by Mary Epps, the acting director ...

Q&A: Tax Deductible Mission Trips
Can individuals who go on mission trips deduct their expenses?
Q&A: Tax Deductible Mission Trips
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Q&A: Housing Allowance
Can a new hire receive a housing allowance for the rest of the year?

We're in the process of hiring a new youth pastor. Can we implement a housing allowance for the rest of 2014?

Presuming your new hire meets the criteria to qualify for a housing allowance, the church can set an allowance effective on their first day on the job (presuming ...

Q&A: Is a Pastor's Holy Land Trip Tax Deductible?
Specific rules dictate the tax treatment for pastors and donors.
Q&A: Is a Pastor's Holy Land Trip Tax Deductible?
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Update: This post was updated on 5/22/14 to clarify the tax deductibility of contributions made by donors toward a trip.

Q&A: Rules Covering Opting Out on Social Security
A pastor asks if it's too late for him to opt out.
Should Ministers Prepare Their Own Tax Returns?
It's not as hard as you might think.

Ministers can prepare their own tax returns. While ministers' taxes present several unique rules, these rules are not complex. Unfortunately, many people confuse uniqueness with complexity. With a little effort most ministers should be able to comprehend these rules sufficiently ...

Why Pastors Must Pay Federal Income Taxes
Ministers aren't exempt, so why do some still try to avoid them?
Why Pastors Must Pay Federal Income Taxes
Image: Bethany Legg / Unsplash

Ministers are not exempt from paying federal income taxes. Since 1943 (Murdock v. Pennsylvania, 319 U.S. 105), the United States Supreme Court has ruled that the First Amendment guaranty of religious freedom is not violated by subjecting ministers to the federal income tax. ...

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Essential Guide to Liabilities and Duties for Church Boards

Essential Guide to Liabilities and Duties for Church Boards Member access only

Be aware of ways you can expose yourself to personal legal liability.
Politics and the Church

Politics and the Church Member access only

Tax and legal guidelines faith-based organizations need to know before jumping into the political fray.