Key Tax Dates April 2022

Filing returns, key quarterly deadlines, exemptions, and more.

Monthly requirements

If your church reported withheld taxes of $50,000 or less during the most recent lookback period (for 2022 the lookback period is July 1, 2020, through June 30, 2021), then withheld payroll taxes are deposited monthly.

Monthly deposits are due by the 15th of the following month. Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes.

Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church reported withheld taxes of more than $50,000 during the most recent lookback period (for 2022 the lookback period is July 1, 2020, through June 30, 2021), then the withheld payroll taxes are deposited semiweekly with a bank.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes (7.65 percent of wages), and the employer’s share of Social Security and Medicare taxes (an additional 7.65 percent of employee wages).

April 18, 2022: Tax returns, amended returns, extension, exemption from Social Security, and quarterly payment

Individual tax returns

Federal income tax and self-employment tax returns by individuals for calendar year 2021 are due by this date.

Amended federal income tax returns

Last day for most taxpayers to file an amended federal income tax return (Form 1040X) for calendar year 2019 (unless you received an extension of time to file your 2019 return). See the instructions for Form 1040X on the IRS website.

Extension for file tax returns

Filing Form 4868 gives taxpayers until October 15 to file their 2021 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by April 15, 2022, to avoid interest and penalties.

Exemption from Social Security coverage

Last day to file an exemption from Social Security coverage (Form 4361) for most eligible clergy who began performing ministerial services in 2020 (deadline extended if applicant obtains an extension of time to file Form 1040).

Quarterly estimated tax payments for certain employees and churches

Ministers who have not elected voluntary withholding and self-employed workers must file their first quarterly estimated federal tax payment for 2022 by this date (a similar rule applies in many states to payments of estimated state taxes).

Nonminister employees of churches that filed a timely Form 8274 (waiving the church’s obligation to withhold and pay Social Security and Medicare taxes) are treated as self-employed for Social Security purposes, and are subject to the estimated tax deadlines with respect to their self-employment (Social Security) taxes unless they ask their employing church to withhold an additional amount of income taxes from each paycheck (use a new Form W-4 to make this request) that will be sufficient to cover self-employment taxes.

A church must make quarterly estimated tax payments if it expects an unrelated business income tax liability for the year to be $500 or more. Use IRS Form 990-W to figure your estimated taxes. Quarterly estimated tax payments of one-fourth of the total tax liability are due by April 15, June 15, September 15, and December 15, 2022, for churches on a calendar year basis. Deposit quarterly tax payments electronically using EFTPS.

April 29, 2022: Employer exemption

Churches hiring their first nonminister employee between January 1, 2022, and March 31, 2022, may exempt themselves from the employer’s share of Social Security and Medicare taxes by filing Form 8274 by this date (nonminister employees are thereafter treated as self-employed for Social Security purposes).

The exemption is only available to churches that are opposed on the basis of religious principles to paying the employer’s share of Social Security and Medicare taxes.

April 30, 2022: Employer’s quarterly federal tax returns

Churches having nonminister employees (or one or more ministers who report their federal income taxes as employees and who have elected voluntary withholding) must file an employer’s quarterly federal tax return (Form 941) for the first calendar quarter of 2022 by this date.

Enclose a check in the total amount of all payroll taxes (withheld income taxes, the withheld employee’s share of Social Security taxes, and the employer’s share of Social Security taxes) if these taxes were less than $2,500 on March 31, 2022.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Key Tax Dates March 2022

Monthly and semiweekly requirements for depositing payroll taxes.

Monthly requirements

If your church reported withheld taxes of $50,000 or less during the most recent lookback period (for 2022 the lookback period is July 1, 2020, through June 30, 2021), then withheld payroll taxes are deposited monthly.

Monthly deposits are due by the 15th the following month. Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes.

Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church reported withheld taxes of more than $50,000 during the most recent lookback period (for 2022 the lookback period is July 1, 2020, through June 30, 2021), then the withheld payroll taxes are deposited semiweekly with a bank.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes (7.65 percent of wages), and the employer’s share of Social Security and Medicare taxes (an additional 7.65 percent of employee wages).

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Key Tax Dates February 2022

Forms 941, 1098-C, 1095-C, and 1094-C are due this month.

Monthly requirements

If your church or organization reported withheld taxes of $50,000 or less during the most recent lookback period (for 2022, the lookback period is July 1, 2020, through June 30, 2021), then withheld payroll taxes are deposited monthly. Monthly deposits are due by the 15th day of the following month.

Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes.

Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church or organization reported withheld taxes of more than $50,000 during the most recent lookback period (for 2022, the lookback period is July 1, 2020, through June 30, 2021), then the withheld payroll taxes are deposited semiweekly.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes (7.65 percent of wages), and the employer’s share of Social Security and Medicare taxes (an additional 7.65 percent of employee wages).

February 10, 2022: Employer’s quarterly federal tax return due

Churches having nonminister employees (or one or more ministers who report their federal income taxes as employees and who have elected voluntary withholding) may file their employer’s quarterly federal tax return (Form 941) by this date instead of January 31 if all taxes for the fourth calendar quarter (of 2021) have been deposited in full and on time.

February 28, 2022: IRS forms due

Filing IRS 1098-C for reporting vehicle sale or donation

Churches file Copy A of Form 1098-C with the IRS by this date to report the sale or use of a donated vehicle. Generally, you must furnish Copies B and C of this form to the donor no later than 30 days after the date of sale if box 4a is checked, or 30 days after the date of the contribution if box 5a or 5b is checked. If box 7 is checked, do not file Copy A with the IRS and do not furnish Copy B to the donor. You may furnish Copy C to the donor. The donor is required to obtain Copy C or a similar acknowledgment by the earlier of the due date (including extensions) of the donor’s income tax return for the year of the contribution or the date that the return is filed. If filing electronically, this form is due by March 31, 2022.

Filing 1095-C and 1094-C for applicable large employers and ACA compliance

Applicable large employers, generally employers with 50 or more full-time employees (including full-time equivalent employees) in the previous year, must file a Form 1095-C for each employee who was a full-time employee of the employer for any month of the previous calendar year by this date. Generally, the employer is required to furnish a copy of Form 1095-C (or a substitute form) to the employee.

The employer also files a Form 1094-C transmittal form with the IRS (including copies of each Form 1095-C). The purpose of this form is to ensure that applicable large employers are complying with the shared responsibility provisions of the ACA. Forms 1094-C and 1095-C must be issued by March 31, 2022, if issued electronically.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

IRS Bumps 2025 Business Use Mileage Rate to 70 Cents Per Mile

The IRS has once again increased the business use mileage rate. Moving, medical, and charitable rates remain unchanged.

Last Reviewed: January 6, 2025

The Internal Revenue Service (IRS) has released the 2025 optional standard mileage rates. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Effective January 1, 2025, the rates are:

  • 70 cents per mile driven for business use (up 3 cents from the 2024 rate).
  • 21 cents per mile driven for medical or moving purposes for certain members of the Armed Forces (no change from the 2024 rate).
  • 14 cents per mile driven in service of charitable organizations (it takes an act of Congress to change this rate).

Note: The rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.


Don’t wait! Start 2025 on a good footing with a Church Law & Tax Advantage Membership and gain access to cohorts, webinars, product discounts, and more, including full access to trusted content from our trusted team of legal, tax, finance, HR and technology advisors.


Limitations created under Tax Cuts and Jobs Act of 2017

Under the Tax Cuts and Jobs Act of 2017, taxpayers cannot:

  • claim a miscellaneous itemized deduction for unreimbursed employee travel expenses and,
  • cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. See Moving Expenses for Members of the Armed Forces for more details

Taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can usually only use the standard mileage rate in the first year a car is available for business use. In later years, taxpayers can choose either the standard mileage rate or actual expenses.

Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals). This applies if the standard mileage rate is chosen.

What does the business mileage rate increase mean for churches?

Increased amounts of reimbursement represent increased budget expenses, and that means adjusting budgets in ways that affect other ministry spending.

Conversely, eliminating or reducing reimbursements shifts the burden to pastors and employees using personal vehicles for church-related business.

Note: Unreimbursed employee business expenses are not deductible under the Tax Cuts and Jobs Act of 2017 (the “Act”). As a result, pastors and employees with unreimbursed mileage cannot seek tax relief on next year’s federal income tax returns. The act allows for a reinstatement of the deduction for unreimbursed employee business expenses after 2025.

You may also want read through this Q&A with CPA and Church Law & Tax Senior Editorial Advisor Michael Batts.

One final note:

Churches with an accountable reimbursement arrangement can reimburse eligible employees who use their vehicles for church-related business. Employees and pastors must properly track and document their business miles under these arrangements.

Unreimbursed employee business expenses are not deductible. Therefore, employees can no longer calculate a mileage deduction on their annual tax returns.

 

Key Tax Dates January 2022

Note deadlines for payroll taxes, fourth quarter estimated payment, and various forms.

Monthly requirements

If your church or organization reported withheld taxes of $50,000 or less during the most recent lookback period (for 2022, the lookback period is July 1, 2020, through June 30, 2021), then withheld payroll taxes are deposited monthly. Monthly deposits are due by the 15th day of the following month.

Note, however, if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes.

Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church or organization reported withheld taxes of more than $50,000 during the most recent lookback period (for 2022, the lookback period is July 1, 2020, through June 30, 2021), then the withheld payroll taxes are deposited semiweekly.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes (7.65 percent of wages), and the employer’s share of Social Security and Medicare taxes (an additional 7.65 percent of employee wages).

January 1, 2022: Payroll Taxes

Social Security and Medicare taxes

Employees and employers each pay Social Security and Medicare taxes equal to 7.65 percent of an employee’s wages. The tax rate does not change in 2022.

The 7.65 percent tax rate is comprised of two components: 1) a Medicare hospital insurance tax of 1.45 percent, and 2) an “old age, survivor and disability” (Social Security) tax of 6.2 percent. There is no maximum amount of wages subject to the Medicare tax. The tax is imposed on all wages regardless of amount.

For 2022, the maximum wages subject to Social Security taxes (the 6.2 percent amount) is $147,000. Stated differently, employees who receive wages in excess of $147,000 in 2022 pay the full 7.65 percent tax rate for wages up to $147,000, and the Medicare tax rate of 1.45 percent on all earnings above $147,000. Employers pay an identical amount. The Medicare tax rate for certain high-income taxpayers increases by an additional 0.9 percent.

Self-employment taxes

The self-employment tax rate (15.3 percent) does not change in 2022. The 15.3 percent tax rate consists of two components: (1) a Medicare hospital insurance tax of 2.9 percent, and (2) an “old age, survivor and disability” (Social Security) tax of 12.4 percent. There is no maximum amount of self-employment earnings subject to the Medicare tax. The tax is imposed on all net earnings regardless of amount.

For 2022, the maximum earnings subject to the Social Security portion of self-employment taxes (the 12.4 percent amount) is $147,000. Stated differently, persons who receive compensation in excess of $147,000 in 2022 pay the combined 15.3 percent tax rate for net self-employment earnings up to $147,000, and only the Medicare tax rate of 2.9 percent on earnings above $147,000. The Medicare tax rate for certain high-income taxpayers increases by an additional 0.9 percent.

These rules directly impact ministers, who are considered self-employed for Social Security with respect to their ministerial services. Ministers should take these rules into account in computing their quarterly estimated tax payments.

Federal incomes taxes

Beginning on this date, churches having nonminister employees (or a minister who has elected voluntary withholding) should begin withholding federal income taxes from employee wages.

To know how much federal income tax to withhold from employees’ wages, employers should have a Form W-4 on file for each employee. Employees should file an updated Form W-4 for 2022, especially if they owed taxes or received a large refund when filing their previous tax return.

Employees should use the IRS Tax Withholding Estimator to determine accurate withholding.

January 15, 2022: Fourth quarter estimated taxes due

Ministers (who have not elected voluntary withholding) and self-employed workers must file their fourth quarterly estimated federal tax payment for 2021 by this date (a similar rule applies in many states to payments of estimated state taxes).

Employees of churches that filed a timely Form 8274 (waiving the church’s obligation to withhold and pay FICA taxes) are treated as self-employed for Social Security purposes, and accordingly are subject to the estimated tax deadlines with respect to their self-employment (Social Security) taxes unless they have entered into a voluntary withholding arrangement with their employing church or organization.

January 31, 2022: Tax forms due

File Form 941

Churches having nonminister employees (or one or more ministers who report their federal income taxes as employees and who have elected voluntary withholding) must file an employer’s quarterly federal tax return (Form 941) for the fourth calendar quarter of 2021 by this date. Enclose a check in the total amount of all withheld taxes (withheld income taxes, withheld Social Security and Medicare taxes paid by the employee, and the employer’s share of Social Security and Medicare taxes) if less than $2,500 on December 31, 2021.

Copies of W-2s for employees

Churches must furnish Copies B, C, and 2 of Form W-2 (“wage and tax statement”) to each person who was an employee during 2021 by this date. This requirement applies to clergy who report their federal income taxes as employees rather than as self-employed, even though they are not subject to mandatory income tax (or FICA) withholding. Nonminister church employees must also receive a W-2.

Filing W-2s and W-3s with the Social Security Administration

Churches must send Copy A of Forms W-2, along with Form W-3, to the Social Security Administration by this date. If you file electronically, the due date is also January 31, 2022.

Copies of 1099-NEC for self-employed persons

Churches must issue Copy B of Form 1099-NEC (“nonemployee compensation”) to any self-employed person to whom the church paid nonemployee compensation of $600 or more in 2021 by this date.

This form (rather than a W-2) should be provided to clergy who report their federal income taxes as self-employed, since the Tax Court and the IRS have both ruled that a worker who receives a W-2 rather than a 1099-NEC is presumed to be an employee rather than self-employed.

Other persons to whom churches may be required to issue a Form 1099-NEC include evangelists, guest speakers, contractors, and part-time custodians.

Filing 1099-NEC and 1096 with the IRS

Churches must send Copy A of Forms 1099-NEC, along with Form 1096, to the IRS by this date.

Distributing 1099-INT

Churches must distribute a 2021 1099-INT form to any person paid $600 or more in interest during 2021 by this date (a $10 rule applies in some cases).

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Key Tax Dates December 2021

Housing allowance designations, year-end transactions, 2021 donations, and more.

Monthly requirements

If your church or organization reported withheld taxes of $50,000 or less during the most recent lookback period (for 2021, the lookback period is July 1, 2019, through June 30, 2020), then withheld payroll taxes are deposited monthly. Monthly deposits are due by the 15th day of the following month.

Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes. Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church or organization reported withheld taxes of more than $50,000 during the most recent lookback period (for 2021, the lookback period is July 1, 2019, through June 30, 2020), then the withheld payroll taxes are deposited semiweekly.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

December 15, 2021: Complete year-end transactions and make UBIT payments

Year-end transactions

Complete all year-end transactions to be sure that they are reportable on your income tax return.

Payment for unrelated business income tax liability

A church must make quarterly estimated tax payments if it expects an unrelated business income tax (UBIT) liability for the year to be $500 or more. Use IRS Form 990-W to figure your estimated taxes. For 2021, quarterly estimated tax payments of one-fourth of the total tax liability are due by April 15, June 15, September 15, and December 15, 2021, for churches on a calendar-year basis. Deposit quarterly tax payments using Electronic Federal Tax Payment System (EFTPS).

December 31, 2021: Housing and Parsonage allowance designations, donations for 2021, and more

Housing allowance

Churches must designate a portion of each minister’s compensation as a housing allowance by this date in order for ministers who own or rent their homes to receive the full benefit of a housing allowance exclusion for calendar year 2022.

The designation should be adopted during a regular or special meeting of the church board and should be contained in the written minutes of the meeting.

Parsonage allowance

Churches should designate a parsonage allowance for any minister who lives in a parsonage and who is expected to pay some of the expenses of maintaining the parsonage (e.g., utilities, furnishings, repairs, improvements, yard care).

Checks for 2021 donations

Donors must deliver checks on or by this date to claim a charitable contribution deduction for 2021. Checks that are placed in the church offering during the first worship service in 2022 will not qualify for a charitable contribution deduction in 2021, even if the check is predated to 2021 or was written in 2021. However, checks that are written, mailed, and postmarked in 2021 will be deductible in 2021 even though they are not received by a church until 2022.

Marital status

An employee’s marital status on this date determines his or her filing status for the year.

Reclassifying someone as an employee

If you have a minister or lay worker who is treated as self-employed for federal income tax reporting purposes, but who you would like to reclassify as an employee, the ideal time to make the change is on January 1, 2022.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

On-Demand Webinar

Fraud in the Church: What We Learned from 700 Church Leaders

Discover the results of our 2021 church fraud survey and the best practices for reducing vulnerabilities.

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A new nationwide survey of more than 700 church leaders conducted by Church Law & Tax shows nearly one-third serve in congregations that have suffered from some form of financial misconduct. Churches of all sizes, ages, and locations are susceptible, according to the survey’s findings—and fraud prevention experts say the vulnerabilities that perpetrators commonly exploit are ones easily remedied. The survey also revealed surprising patterns regarding the types of people who are most prone to steal from their churches.

CPA Vonna Laue and attorney and Church Law & Tax content editor Matthew Branaugh co-led the research project. In this free, one-hour webinar, Laue and Branaugh sit down to discuss:

  • the purpose of the survey,
  • the results that stood out most,
  • and the best practices leaders can implement now to reduce their church’s vulnerabilities.

Download the slides below to follow along and take notes as you watch.

NEW! Safeguarding Your Church’s Finances:

Explore this multi-session video course for pastors, board members, staff, and volunteers on the basics of fraud prevention. LEARN MORE!

Can Churches Bar Service Animals?

Before your church considers barring service animals, it is good to understand the legal and ministerial dimensions.

Last Reviewed: July 28, 2025

Responding to a churchgoer who wants to bring a service or support animal to church may not be a new challenge.

A fresco in the ancient Roman city of Herculaneum is one of the world’s earliest references to service animals. The fresco shows a guide dog helping a blind man cross a busy street. Since this fresco dates back to the late first century A.D. in a city not far from Rome and its fledgling Christian church, it is not unreasonable to assume that the church encountered the occasional presence of a service animal.


Lead Your Church With Confidence—Become a Church Law & Tax Member Today.


The New Testament does not mention service animals. But there are several points that may be helpful to modern church leaders when considering whether to bar service animals.

Background: You cannot discriminate in places of public accommodation

Title III of the federal Americans with Disabilities Act (ADA) prohibits discrimination based on disability by places of public accommodation.

ADA Title III Technical Assistance Manual categorizes the 12 different types of public accommodations organizations.

Churches—and religious schools controlled by religious organizations—are not among them.

Actually, the ADA explicitly affirms this exemption by specifying that the public accommodations provisions “shall not apply to … religious organizations or entities controlled by religious organizations, including places of worship.”

As a result, most religious organizations are excluded from the prohibition of discrimination in places of public accommodation. The House Report detailing congressional committee discussions prior to the law’s passage notes that “places of worship and schools controlled by religious organizations are among those organizations and entities which fall within this exemption.”

The House Report also says “activities conducted by a religious organization or an entity controlled by a religious organization on its own property, which are open to nonmembers of that organization or entity are included in this exemption.”

More from the ADA Title III Technical Assistance Manual:

III-1.5000 Religious entities. Religious entities are exempt from the requirements of Title III of the ADA. A religious entity, however, would be subject to the employment obligations of Title I if it has enough employees to meet the requirements for coverage.

III-1.5100 Definition. A religious entity is a religious organization or an entity controlled by a religious organization, including a place of worship.

If an organization has a lay board, is it automatically ineligible for the religious exemption? No. The exemption is intended to have broad application. For example, a parochial school that teaches religious doctrine and is sponsored by a religious order could be exempt, even if it has a lay board.

III-1.5200 Scope of exemption. The exemption covers all of the activities of a religious entity, whether religious or secular.


ILLUSTRATION: A religious congregation operates a daycare center and a private elementary school for [the congregation’s] members and nonmembers alike. Even though the congregation is operating facilities that would otherwise be places of public accommodation, its operations are exempt from Title III requirements.

What if the congregation rents to a private day care center or elementary school? Is the tenant organization also exempt?

No. The private entity that rents the congregation’s facilities to operate a place of public accommodation is not exempt, unless it is also a religious entity. If it is not a religious entity, then its activities would be covered by Title III. The congregation, however, would remain exempt, even if its tenant is subject to the law. That is, the obligations of a landlord for a place of public accommodation do not apply if the landlord is a religious entity.

If a nonreligious entity operates a community theater or other place of public accommodation in donated space on the congregation’s premises, is the nonreligious entity covered by Title III?

No. A nonreligious entity running a place of public accommodation in space donated by a religious entity is exempt from Title III’s requirements. The nonreligious tenant entity is subject to Title III only if a lease exists under which rent or other consideration is paid.

Note that while schools and daycare centers are both on the list of 12 categories subject to the ADA, they are exempt if “controlled by a religious organization.”

Example. A church operates a school and preschool as ministries of the church. Both the school and preschool are subject to the church’s control. The church’s governing board serves as the board for the school and preschool, and it exercises plenary control over all their activities, including personnel, finances, and curriculum. The school and preschool operate under the church’s corporate and tax-exempt status.

The school and preschool are “controlled by a religious organization,” and therefore are exempt from the ban on discrimination by places of public accommodation. Among other things, this means that the school and preschool are not required to allow service dogs.

Example. For many years, a church has operated a private school. Recently, church leaders decided to separately incorporate the school to insulate the church from the school’s liabilities. The school selects its own board and operates independently of church control. The school no longer is “controlled by a religious organization” and therefore is subject to the ADA’s public accommodations provisions.

Note. While religious organizations are not subject to the ADA’s public accommodation provisions, they may be subject to similar provisions under state or local law. Similarly, churches should note the ADA’s provisions related to employment under Title I of the law, which is further address below.

Applying the ADA requirements to service animals

The ADA requires covered entities that provide goods or services to the public to make “reasonable modifications” in their policies, practices, or procedures when necessary to accommodate people with disabilities. This requirement applies to service animals. As noted above, religious organizations are exempt from Title III of the ADA, and so they are not subject to any requirement under Title III of the ADA pertaining to service animals.

Key Point. Whether or not a church is required to allow service animals in church services or at church-sponsored activities, leaders should still have a basic understanding so they can make both informed and compassionate decisions.

What is a service animal?

The ADA defines a service animal as a dog trained to do work or tasks for a disabled person. The disabled person can train the dog. The task(s) performed by the dog must be directly related to the person’s disability.

The dog must be able to assist the person with a disability.

For example, a person with diabetes may have a dog trained to alert him when his blood sugar reaches high or low levels.

A depressed person may have a dog trained to remind them to take their medication.

Or, someone prone to seizures may have a dog trained to detect an oncoming seizure.

What about animals providing “emotional support?”

A fairly common misunderstanding is that a comfort pet is the equivalent of a service animal.

However, service animals are working animals, not pets.

Animals whose sole function is to provide comfort or emotional support do not qualify as service animals under the ADA.

The ADA does not view emotional support, therapy, comfort, or companion animals as service animals. However, some state and local governments do allow such animals in public places. Review local and state laws to find out.

How to determine if a dog is a service animal

In situations where it is not obvious that the dog is a service animal, church staff may ask only two specific questions:

  1. Is the dog serving someone with a disability?
  2. is the dog doing work or performing a task?

Caution. Churches are not allowed to request any documentation for the dog, require that the dog demonstrate its task, or inquire about the nature of the person’s disability.

The ADA does not require service animals to wear a vest, ID tag, or specific harness.

When can a church exclude service animals?

Someone asked the US Department of Justice: “Are churches, temples, synagogues, mosques, and other places of worship required to allow individuals to bring their service animals into the facility?”

Its response: “No. Religious institutions and organizations are specifically exempt from the ADA. However, there may be state laws that apply to religious organizations.

Applying the Americans with Disabilities Act to a congregational setting

Animal’s Owner: An unpaid volunteer worker (i.e., some teacher, musician, or usher), and/or church member.

Application: ADA Title I does not apply since there is no employment relationship.

ADA Title III states that the public accommodations provisions “shall not apply to . . . religious organizations or entities controlled by religious organizations, including places of worship.”

Be sure to check state and local disability laws.

Remember this: If admitting service animals would fundamentally alter the nature of a service or program, service animals may be prohibited under the federal ADA.

Further, if a service animal is out of control and the handler does not take effective action to control it, or if it is not housebroken, the church may request that the animal be removed from the premises.

The ADA requires that service animals be always under the control of the handler. In most instances, the handler will be the individual with a disability or a third party who accompanies the individual with a disability.

The service animal must be harnessed, leashed, or tethered while in public places unless these devices interfere with the service animal’s work or the person’s disability prevents use of these devices. In that case, the person must use voice, signal, or other effective means to maintain control of the animal.

For example, a person who uses a wheelchair may use a long, retractable leash to allow her service animal to pick up or retrieve items. She may not allow the dog to wander away from her and must maintain control of the dog, even if it is retrieving an item at a distance from her.

Under control also means that a service animal should not be allowed to bark repeatedly in a lecture hall, theater, library, or any other quiet place. However, if a dog barks just once, or barks because someone has provoked it, this would not mean that the dog is out of control.


To help guide your church’s decision-making regarding a service animal’s presence, consider the following examples.

Example. A church’s volunteer worship leader recently began bringing his pet dog to church as a support or comfort animal. Several members who find the presence of the dog a distraction complain to the pastor. Can the pastor ask the volunteer to discontinue bringing his dog?

Yes, for two reasons.

First, Title III of the ADA specifies that the public accommodations provisions “shall not apply to . . . religious organizations or entities controlled by religious organizations, including places of worship.”

Second, the volunteer’s dog is not a “service animal” protected by the ADA unless it has been trained to do work or perform tasks for an individual with a disability. The tasks performed by the dog must be directly related to the person’s disability.

Example. A church member begins bringing her large dog to church services. The dog sits up on the pew next to the owner. Several members find the presence of the dog a distraction and complain to the pastor. Can the pastor ask the member to discontinue bringing her dog?

Yes. See the analysis in the previous example.

Example. A church member begins bringing his miniature horse to church with him in order to provide comfort. The horse sits up on the pew next to the owner. Can the church ask the member to discontinue bringing his horse?

Yes. See the analysis in the previous example.

Also, see the “Miniature Horses” section in the ADA revised requirements for service animals.


Example. A church places a “no pets” sign at all of its entrances. Since religious organizations are not subject to the ADA’s public accommodation provisions, the sign is permissible. Note, however, that the church may be subject to similar provisions under state or local law.

Example. A church with 10 employees has an employee who suffers from anxiety. This employee has asked for permission to bring a service animal to work with her. This question implicates the ban on employment discrimination based on disability under Title I of the ADA. Employment discrimination under the ADA is addressed below.

Caution. It is important to remember that while religious organizations are not subject to the ADA’s public accommodation provisions, they may be subject to similar provisions under state or local law. More details below.


Churches may need to comply with state and local laws

While religious organizations are not subject to the ADA’s provisions regarding public accommodations, including service animals, they must still carefully evaluate whether they are subject to similar provisions mandated under state or local laws—and, if such laws exist, whether they provide any religious exemptions under them.

It is highly recommended church leaders consult with a local ADA attorney who understands local and state public state public accommodations laws, and religious organizations.

Can church employees bring service animals to work?

The ADA specifically permits religious organizations (including religious educational institutions) to “give preference in employment to individuals of a particular religion to perform work connected with the carrying on by organization of its activities.”

The ADA further provides that “a religious organization may require that all applicants and employees conform to the religious tenets of such organization.” 29 CFR 1630.16(a).

Note that Title I’s religious exemption is narrower than Title III’s blanket exemption of “religious organizations or entities controlled by religious organizations, including places of worship.”

Title I of the ADA prohibits private employers (among other entities) from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training, and other terms, conditions, and privileges of employment. The ADA covers employers with 15 or more employees.

An individual with a disability is a person who:

  • Has a physical or mental impairment that substantially limits one or more major life activities;
  • Has a record of such an impairment; or
  • Is regarded as having such an impairment.

A qualified employee or applicant with a disability is an individual who, with or without reasonable accommodation, can perform the essential functions of the job in question. Reasonable accommodation may include, but is not limited to:

  • Making existing facilities used by employees readily accessible to and usable by persons with disabilities
  • Job restructuring, modifying work schedules, reassigning to a vacant position
  • Acquiring or modifying equipment or devices, adjusting or modifying examinations, training materials, or policies, and providing qualified readers or interpreters

If a reasonable accommodation of a known disability of a qualified applicant or employee does not impose an “undo hardship” on the employer’s business operation, the employer must do it.

Reasonable accommodations are adjustments or modifications provided by an employer to enable people with disabilities to enjoy equal employment opportunities.

Accommodations vary depending upon the needs of the individual applicant or employee. Not all people with disabilities (or even all people with the same disability) will require the same accommodation.

Service animals may be considered “reasonable accommodation”

The DOJ has stated that service animals may be a reasonable accommodation of some employee disabilities. (See this FAQ.)

Employers that agree to allow service animals can put limits in place to protect other employees and company property.

Applying Americans with Disabilities Act to paid church employees

Animal’s Owner: A paid employee

Application: The ADA’s employment discrimination provisions (Title I) only apply to employers that have 15 or more employees.

Covered employers must provide reasonable accommodations. Sometimes, these may include service animals that help an employee or job applicant do the essential functions of the job.

However, note: (1) The ADA permits religious organizations (including religious educational institutions) to “give preference in employment to individuals of a particular religion to perform work connected with the carrying on by organization of its activities,” and (2) the ADA provides that “a religious organization may require that all applicants and employees conform to the religious tenets of such organization.”

Be sure to check state and local disability laws.

Employers do not have to sacrifice quality or production standards to make an accommodation.

Employers do not have to provide personal use items, such as glasses or hearing aids.

An employer does not have to provide a reasonable accommodation unless an individual with a disability has asked for one. Sometimes, a medical condition may cause a performance or conduct problem. If that is the case, the employer may ask whether the the employee needs a reasonable accommodation.

Unlike Title III, there is no requirement in Title I (see below) that an employer grant the request of an employee for a service animal. Instead, such a request triggers an “interactive process.” This process involves discussing the employee’s needs and possible accommodations that will not impose an undue hardship on the employer.

Note. Where more than one accommodation would work, the employer may choose the one that is less costly or that is easier to provide.

Note. Employers must recognize that they now have an affirmative duty to make reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability who is a job applicant or employee, unless they can demonstrate that the accommodation would impose an undue hardship on the operation of their business.

Determining if Title I of the ADA applies

When does—and doesn’t—Title I of the ADA apply to a church and its employees? Consider these examples.

Example. A church with 10 employees has an employee with a disability. This employee has asked for permission to bring a service animal to work.

This question implicates the ban on employment discrimination based on disability under Title I of the ADA. However, Title I only applies to employers having 15 or more employees, and so it does not apply to the church in this example.

Most states, however, have enacted legislation banning discrimination in employment based on disability, and many of these laws apply to employers with fewer than 15 employees.

Example. A church with 20 employees has an employee with a disability. This employee has asked for permission to bring a service animal to work with her to manage her symptoms. This question implicates the ban on employment discrimination based on disability under Title I of the ADA.

Title I applies to employers having 15 or more employees, and so it applies to the church in this example. The employee’s request for accommodation triggers an “interactive process” in which the employee and church informally discuss what accommodations the church could adopt (including allowing the employee to bring a service animal to work) that would render her capable of performing the essential functions of her job without undue hardship to her employer.

Example. A church with 20 employees terminates its pastor, who became disabled in recent years.

The pastor sues, claiming that his termination constituted discrimination based on disability since the church refused to provide reasonable accommodations to enable him to perform the essential functions of his job. One of the specific accommodations the pastor requested was a “seeing-eye dog.” The court declined to offer this accommodation based on the “ministerial exception.”

The “ministerial exception,” a judicially made legal doctrine unanimously supported through a 2012 US Supreme Court decision, and affirmed and further expanded by a 2020 Supreme Court decision, bars civil courts from reviewing employment disputes between churches and ministers. This doctrine effectively bars claims of disability discrimination by ministers against their employing church.

Church leaders should seek legal counsel when responding to requests by employees, job applicants, church members, and visitors. Special attention must be paid to local and state laws.

Sample Service Animal Policy tailored for Churches

Service & Support Animals Policy

{CHURCH NAME} is committed to providing a safe and secure environment for people participating in ministry
activities, including those using service animals. Please review our guidelines regarding both service and
emotional support animals. Although churches are not required to admit service animals to their worship
services, this voluntary policy generally follows federal and state guidelines.

Service Animals


Under Title III, the ADA defines a service animal as “a dog that has been individually trained to do work or perform tasks for an
individual with a disability.” The task(s) performed by the service dog must be directly related to the person’s
disability. We welcome people with service animals on ministry premises. Ministry leaders may ask individuals
with service dogs a few questions, including:

Is the dog serving someone with a disability?

Is the dog doing work or performing a task?

If the answer is NO, see Emotional Support Animals below.

Emotional Support Animals


An emotional support animal (also known as a comfort animal) provides reassurance for someone. Dogs, cats, birds, hamsters, and many other species can serve as emotional support animals. However, they do not qualify as “service animals” under the ADA. Therefore, our organization has chosen NOT to allow emotional support animals on its premises. We apologize for any inconvenience this may cause to you or your family.

Animal Handler’s Responsibilities


Individuals who bring a service dog onto our premises are expected to:

  • Keep the dog harnessed, leashed, or tethered unless these devices interfere with an animal’s work or an
    owner’s disability prevents them from using them.
  • Control the dog through voice, signal, or other effective controls if the animal cannot be harnessed, leashed, or tethered.

Our Organization’s Rights


Our organization does not have to provide care, food, or a special location for the service dog to relieve
itself. We reserve the right to remove a service dog from the premises if it:

  • Is out of control, and the handler does not take effective action to control it.
  • Poses a direct threat to the health or safety of others.
  • Is not housebroken.

If a service dog must be removed from the premises, absent other circumstances, the owner may re-enter the
premises and attend church or ministry activities without the service dog. Handlers and service dogs seating will be on the outside seating of the sanctuary.

Understand that the state of {INSERT NAME} may have enacted laws that supplement the federal Americans with Disabilities Act (ADA) when it comes to service dog—including laws that:

  • Set specific access rules for public and private facilities, including churches and religious organizations in certain contexts
  • Define service animals more narrowly or strictly than federal law,
  • Establish penalties for misrepresenting a pet as a service animal, and
  • Set specific access rules for public and private facilities, including churches and religious organizations in certain contexts.

Signed,

{CHURCH REPRESENTATIVE}

I have read and understand this policy. (The service dog’s handler may acknowledge the policy.)
Name: ____________________________________________________
Signature: _____________________________________Date: _______

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Key Tax Dates November 2021

Deadlines for quarterly federal tax return and employer exemption.

Monthly requirements

If your church or organization reported withheld taxes of $50,000 or less during the most recent lookback period (for 2021, the lookback period is July 1, 2019, through June 30, 2020), then withheld payroll taxes are deposited monthly. Monthly deposits are due by the 15th day of the following month.

Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes. Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church or organization reported withheld taxes of more than $50,000 during the most recent lookback period (for 2021, the lookback period is July 1, 2019, through June 30, 2020), then the withheld payroll taxes are deposited semiweekly.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

November 1, 2021: File Form 941 and Form 8247

Quarterly federal tax return (Form 941) with payment

Churches having nonminister employees (or one or more ministers who report their federal income taxes as employees and who have elected voluntary withholding) must file an employer’s quarterly federal tax return (Form 941) by this date.

Enclose a check in the total amount of all withheld taxes (withheld income taxes, withheld FICA taxes paid by the employee, and the employer’s share of FICA taxes) if less than $2,500 on September 30, 2021.

Employer exemption (Form 8247)

Churches hiring their first nonminister employee between July 1 and September 30 may exempt themselves from the employer’s share of FICA (Social Security) taxes by filing Form 8274 by this date. (Nonminister employees are thereafter treated as self-employed for Social Security purposes).

The exemption is only available to churches that are opposed on the basis of religious principles to paying the employer’s share of FICA taxes.

November 10, 2021: File Form 941 if third quarter taxes deposited in full, on time

Churches having nonminister employees (or one or more ministers who report their federal income taxes as employees and who have elected voluntary withholding) may file their employer’s quarterly federal tax return (Form 941) by this date instead of November 1 if all taxes for the third calendar quarter have been deposited in full and on time.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

A VIRTUAL ROUNDTABLE

Introduction: Religious Land Use & The Church

A five-part series on an often overlooked law that can benefit churches.

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This virtual roundtable, featuring attorneys Midgett Parker, John Mauck, Noel Sterrett, and Eric Treene, explores why every church should understand the ins and outs of the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA).

This federal law provides powerful protections to houses of worship. Even if your congregation has yet to encounter obstacles from local government officials, zoning boards, or neighborhood associations, it should understand what RLUIPA is and how it works.

The virtual roundtable is conveniently set up in five segments for church leaders to watch, either individually or as a board, committee, or leadership team. It includes a companion PDF guide containing practical, helpful information. It also includes two video case studies featuring church leaders who successfully used RLUIPA to navigate challenges they faced.

Church Law & Tax members can access the full series here: Religious Land Use & The Church: A Virtual Roundtable.

The editorial team of Church Law & Tax is made up of Matthew Branaugh, attorney-at-law, and Rick Spruill, digital content manager.

What if Your Church Receives a Large Donation of Virtual Currency?

So your church just received a large donation of virtual currency. What next? What are the tax implications?

Last Reviewed: May 8, 2025

Whatever you may think about virtual currencies, one reality is that a significant number of people have invested in them. A sizable portion of those investors have seen their investments increase in value dramatically (despite extreme volatility). And a growing number of investors holding virtual currencies that have appreciated in value are considering donating some of their holdings to their church or favorite charitable organization.

Charitable organizations, including churches, must be prepared in the event an investor wishes to donate a sizable amount of virtual currency.

Logistical aspects of accepting a donation of virtual currency

In order to accept any donation of virtual currency, a church must take certain steps. The church can establish its own “wallet” (the term used in the virtual currency arena for an account)—either directly or with an exchange like Coinbase (not an endorsement). Establishing and maintaining its own virtual currency wallet is the most challenging approach for most churches.

Alternatively, the church can work with a donor-advised fund sponsoring organization to accept such gifts and convert them to cash for the benefit of the church. Or the church can utilize third-party donation processors like The Giving Block or Engiven (not endorsements) that allow the church to add a virtual currency giving button to its website. The processor receives the virtual currency donation on behalf of the church, converts it to cash, and transfers the funds to the church’s bank account—all for a fee, of course.

Each approach has its own challenges and risks. Regardless of the approach a church may take to accepting virtual currency donations, the church should keep data security and internal controls top of mind.

Virtual currencies are considered noncash property

The Internal Revenue Service (IRS) considers virtual currencies to be noncash property. So, if a taxpayer buys units of a virtual currency and later sells them at a gain, the taxpayer will be subject to tax on the gain pursuant to the rules for taxing capital gains.

The advantage of donating appreciated virtual currency over selling and donating the sales proceeds

If a taxpayer donates the appreciated virtual currency directly to a qualified charity, he or she will not be taxed on the appreciation in value. And the even better news: neither will the charity! That is because capital gains of 501(c)(3) public charities (which include churches) are not typically subject to federal income tax. The amount deductible by the donor will vary depending on the facts, but if the donor holds the virtual currency for more than a year prior to donating it, he or she may be entitled to a deduction of the full fair market value of the virtual currency contributed, with no tax on the gain!

When a virtual currency donation is valued by the donor at more than $5,000

Churches and other nonprofits need to understand the rules for substantiating a charitable contribution deduction of virtual currency valued by the donor at more than $5,000. Keep the following points in mind.

The IRS is a stickler

Federal income tax law requirements for substantiating charitable contribution deductions are strict, especially for noncash contributions. A donor who plans to take a charitable contribution deduction on his or her tax return should carefully follow the substantiation requirements.

The IRS frequently limits charitable deductions or denies them altogether where it finds that the donor (and his or her tax preparer) have not closely followed the law. Courts generally back the IRS in strictly applying the charitable contribution substantiation rules to donors

The $5,000 threshold

This article focuses on contributions of virtual currency. The rules described here generally apply to contributions of noncash items (other than publicly traded securities) valued by the donor at more than $5,000, and for which a charitable contribution deduction will be claimed.

The $5,000 threshold can be met if a single noncash item valued by the donor at more than $5,000 is donated, or if a group of similar items (for example, books) with a combined value of more than $5,000 is donated during the year. The similar items do not all have to be donated at the same time, or even to the same organization, for the $5,000 threshold to be triggered.

Special rules apply to contributions of automobiles, boats, and airplanes—a subject outside the scope of this article.

Substantiation requirements

In order to properly substantiate the deduction on the donor’s tax return of a noncash contribution in excess of the $5,000 threshold, the donor must:

  1. Obtain a qualified appraisal,
  2. Obtain a contemporaneous written acknowledgment from the charitable organization,
  3. Prepare and submit Form 8283 with his or her tax return, and
  4. Maintain specific records.

Each of these requirements is described further below.

1. Obtain a qualified appraisal

For purposes of determining the fair market value of virtual currency donated to a charitable organization and valued by the donor at more than $5,000, the IRS requires donors to obtain a written qualified appraisal.

The donor is responsible for obtaining a qualified written appraisal prepared by a qualified appraiser. A qualified appraiser for this purpose is an individual who has earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or that has met certain minimum education and experience requirements.

Further, the appraiser generally cannot be the donor, the charity receiving the donation, or an employee or agent of the donor or charity.

A qualified appraisal must be prepared in accordance with generally accepted appraisal standards and must include certain information, including: a description of the type and condition of the property; the valuation effective date; the fair market value of the contributed property on the valuation date; the method and basis of valuation; the terms of any agreement between the donor and the charity regarding the future use or sale of the donated property; identifying information regarding the qualified appraiser and the appraiser’s qualifications; and a statement that the appraisal was prepared for income tax purposes.

The qualified appraisal must be made, signed, and dated no earlier than 60 days prior to the date the appraised property was donated, and no later than the due date of the taxpayer’s return (including extensions) for the year of the donation. Further, the appraisal fee generally cannot be based on a percentage of the appraised value of the property.

Charitable Solutions, LLC (not an endorsement) is one firm that provides appraisals for virtual currency.

2. Obtain a contemporaneous written acknowledgment

It is important to note that a donor must obtain a written acknowledgment from the charity for all cash and property contributions of $250 or more, including those for which an appraisal must also be obtained.

The acknowledgment must be obtained by the earlier of the date on which the donor files his or her income tax return for the year in which the contribution was made or the due date (including extensions) of the return.

The acknowledgment should include the legal name of the charity, the name of the donor, the date and amount of the contribution, a description (but not the value) of any noncash contributions, and a statement (if true) that no goods or services were received by the donor in exchange for the donation.

If the donor received anything from the charity in return for the donation (other than certain de minimis items), the acknowledgment must include a “good faith estimate” of the value of the goods and services the donor received and a disclosure indicating that the donor may only deduct as a charitable contribution the excess of the amount donated over the fair market value of the items or services received in exchange for the donation.

3. Prepare and submit Form 8283 with the donor’s tax return

In addition to the above requirements, a donor of noncash property valued at over $5,000 must complete Section B of Form 8283 and submit it with the donor’s income tax return for the year in which the contribution was made. Section B of the Form 8283 must be signed by both the qualified appraiser and the charitable organization that received the donation. Both the appraiser and the charitable organization must also provide their address and tax identification number.

Additionally, the following information must be reported in Section B of the Form 8283: a description of the donated property; a brief summary of the overall physical condition of the property (if the donated property is tangible personal property); the appraised fair market value of the property; the date and manner of acquisition by the donor of the property; the cost or adjusted basis of the donated property; the amount claimed by the donor as a charitable contribution deduction; and the date of the contribution.

Generally, the qualified appraisal itself is not required to be submitted with the donor’s tax return unless the value of the property contributed exceeds $500,000.

Note. Completing Form 8283—even one signed by the recipient charity—does not eliminate the donor’s requirement to obtain a contemporaneous written acknowledgement as described above.

4. Maintain records

The donor is required to maintain certain records in connection with the charitable contribution deduction taken on the return. Generally, these records must include the contemporaneous written acknowledgment obtained from the charity, as well as the information included in Section B of Form 8283 outlined above. A copy of the qualified appraisal should also be retained by the donor.


For additional information on individuals contributions of noncash property valued by a donor at more than $5,000, see chapter 8 of Richard Hammar’s annual Church & Clergy Tax Guide.


Strict requirements

Charitable donations of virtual currency are on the rise. Until and unless the IRS or Congress simplifies the substantiation rules for such donations, strict substantiation and documentation requirements apply for charitable deductions related to such donations, particularly those valued at greater than $5,000. Donors and their tax preparers must carefully follow the rules in order to avoid challenges by the IRS of deductions for charitable donations of virtual currency.

This information was adapted from an article that originally appeared in the Batts Morrison Wales & Lee Nonprofit OnPoint e-newsletter. Used with permission. We’ve used a combination of AI and human review to make this content easier to read and understand.

Mike Batts, CPA, is the managing partner of Batts Morrison Wales & Lee (BMWL) and a senior editorial advisor for Church Law & Tax. Michele Wales, CPA, is a partner and the national director for tax services at BMWL. BMWL is an accounting firm dedicated exclusively to serving churches and nonprofit organizations nationwide.

On-Demand Webinar

The Basics of Running a Legally Sound Church Business Meeting

Attorneys Richard Hammar and Sarah E. Merkle discuss best practices for implementing and following parliamentary procedures.

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Churches should select and implement a specific body of parliamentary procedure in order to efficiently consider business and properly make legally sound decisions.

Yet some churches have not adopted procedures, while others do not recall what they have adopted—and still others know the procedures they adopted, but do not know if they correctly follow them. This uncertainty leaves many congregations open to the possibilities of disorganized meetings, haphazard decision-making—and possible legal scrutiny down the road.

In this webinar featuring attorneys Richard Hammar and Sarah Merkle—two well-respected voices on the topics of church governance and business meetings—participants will learn more about:

  • the processes of adopting procedures;
  • the various types of procedures available to adopt (including Hammar’s analysis of the new 12th edition of Robert’s Rules of Order Newly Revised);
  • the best practices for implementing and following those procedures;
  • and more.

Download the presentation slides to follow along and take notes as you watch.

More on this topic:

  • Make note of 17 Changes Relevant to Churches in Newest Robert’s Rules of Order.
  • Learn more about what churches need to know to conduct legally sound meetings from this recommended reading collection.
  • Gain new ideas, insights, and advice on how to proceed as you shift more ministry online.
  • Find out about the emergency provision you should consider including in your bylaws.

Every Church Is at Risk for Fraud. Here’s Why.

Church Law & Tax’s nationwide survey shows churches of all sizes, ages, and locations are susceptible to financial misconduct.

Last Reviewed: May 13, 2025

A nationwide survey of more than 700 church leaders conducted by Church Law & Tax shows nearly one-third serve in congregations that have suffered from some form of financial misconduct.

Among those experiencing it, half said an incident occurred within the past 10 years.

Prior research conducted by other organizations throughout the past 20 years has usually pegged the figure closer to 10 percent or 15 percent for houses of worship. Still, church financial experts have long estimated that the figure was at least one-third or even higher for all congregations across the nation—a figure that appears to track closely with the Church Law & Tax study from 2021.

“It was disheartening to see 30 percent of churches responding had experienced fraud,” said CPA Vonna Laue, a senior editorial advisor for Church Law & Tax who co-led the survey project. “It did confirm to me how prevalent this situation is in churches.”

Churches of all sizes, ages, and locations are susceptible, according to the survey’s findings—and fraud prevention experts say the vulnerabilities that perpetrators commonly exploit are ones easily remedied.

“The primary types of financial misconduct that occurred are the most preventable with a good internal control structure,” Laue said.

Yet many churches do not install simple safeguards out of a perceived high level of trust among their ranks, a noted frustration among the financial experts who reviewed Church Law & Tax’s results and provided comment.

“It will never happen here”

Two-thirds of survey respondents who said they weren’t aware of fraud in their churches also said they believe the problem is unlikely or “will never” happen in their churches. Ironically, among those who endured misconduct, half said they shared a similar “it-will-never-happen” sentiment before uncovering a case—and 80 percent then implemented several basic measures after the fact.

“This is one of the most important takeaways from this study,” noted Rollie Dimos, a Certified Fraud Examiner (CFE) and author of Integrity at Stake: Safeguarding Your Church from Financial Fraud. “Most people think that their church is immune from the risk of fraud because [their] staff and volunteers are trustworthy. . . . We trust people to do the right thing, but we can fail them if we don’t hold them accountable or provide controls to protect them.”

Nathan Salsbery, a CFE and a partner and executive vice president for nonprofit CPA firm CapinCrouse, said many congregations “do not implement effective internal controls until they feel the pain of fraud firsthand.”

Salsbery is currently assisting fraud investigations at three different churches. “Had these churches implemented a few basic internal controls, they would have either prevented the fraud or would have detected it much sooner,” he added.

A costly toll

The failure to prevent or quickly detect financial misconduct exacts heavy tolls on congregations. In a 2022 study, Gordon-Conwell Theological Seminary’s Center for the Study of Global Christianity estimates church fraud globally will total $70 billion a year by 2025.

The fallout extends beyond pure dollars, though, and often with devastating effects. In an analysis of the language used by respondents to Church Law & Tax’s survey, words associated with anger and sadness appeared repeatedly among respondents who experienced fraud.

“The financial losses can be staggering,” Salsbery said. “While the financial losses are bad enough, there are usually many other losses that result from the inevitable broken trust and relationships damaged by such long-term acts.”

Such damage is understandable, given the typical identity of the perpetrator and the amounts that he or she steals.

As the Church Law & Tax research shows, the profiles of offenders frequently included treasurers, board members, and middle-aged pastors. Financial losses were the largest among perpetrators with long tenures at their churches (see “Loved and Trusted: What Shocks Us Most about Fraud Perpetrators”).

As for the amounts stolen, Church Law & Tax’s research showed 69 percent of those victimized said their losses measured less than $100,000. About 14 percent said the amounts topped $100,000, while another 15 percent said they did not know how much was taken.

Precise financial losses are difficult to pinpoint since the perpetrator may not know or may lie. And churches that choose not to contact law enforcement likely will miss out on learning the full extent because a thorough investigation never happens. Nearly 70 percent of victimized churches chose not to report their cases to police. Overall, only 22 percent of all respondents said their boards would contact law enforcement in the event a future suspected or actual case arose (see “Reporting Financial Crime as a Matter of Stewardship”).

Easy opportunities

Nearly 42 percent of cases involved “inappropriate expenses or inappropriate expense reimbursements,” the survey showed. Slightly more than 30 percent involved stealing contributions. Payroll fraud and inaccurate timesheets combined constituted 12 percent of the cases. And another 11 percent took tangible church property, while about 9 percent forged check signatures. (Note: Respondents to the “Types of Financial Misconduct” infographic were asked to check all that apply.)

While the type of theft men and women committed against their churches varied, according to the survey, it generally boiled down to one thing: easy opportunities.

“While TV shows often depict fraud as grand and complicated schemes, most fraud committed in the church is simply an individual taking advantage of a situation where no one is looking,” Salsbery observed.

Just assigning another set of eyes to monitor a variety of financial activities could greatly reduce easy opportunities. For instance, the leading “red flag” for persons who committed fraud was excessive control over his or her duties or an “unwillingness to have others cover his/her job duties.”

“Nearly half of fraud schemes found were detected as a result of another employee performing a person’s duties” in their absence, noted CPA Michael Batts, another Church Law & Tax senior editorial advisor who reviewed the results. “The rotating duties of workers performing certain financial duties is, itself, an effective internal control mechanism, especially where adequate segregation of duties for a particular position is not in place.”

Encouraging signs—but much room for improvement

While the ease with which perpetrators stole from their churches is troubling, many of the practices best positioned to thwart such efforts do not require extensive time or expense.

On an encouraging note, many respondents indicated at least some best practices are already in place.

About 86 percent of all respondents regularly generate and review financial statements, and 83 percent make certain two unrelated people work together to handle financial tasks.

Around three-quarters of those who had experienced fraud said they use separate individuals—the “segregation of duties” in accounting parlance—for authorizing cash disbursements, maintaining custody or control over cash, and handling accounting responsibilities. (Note: Most of those who responded to the question about “segregation of duties” were in churches that had experienced fraud. Respondents highlighted in the “Top measures churches take to prevent financial misconduct” infographic were asked to check all that apply.)

Still, the responses for these categories show between 17 percent and 25 percent of churches are not performing these basic measures.

The percentages worsen when considering other areas of financial accountability or internal controls recommended by experts. For instance:

  • Slightly more than half of respondents said one person in their church has the ability to perform all aspects of cash disbursements without requiring another individual’s involvement. “That is a staggering statistic,” Laue noted.

Dimos said this problem, along with improper expenses or expense reimbursements—the leading type of fraud found in the survey—can be easily prevented by “[r]equiring a second person to review and approve all credit card purchases or reviewing invoices or reimbursement requests before signing checks.”

Additionally, “disciplined monthly reviews of cancelled checks (or images) and reviews of monthly credit card statements and related documentation and support [can] significantly reduce risk,” Salsbery said.

  • Only one-third of churches store their collections in a safe and secure manner and require dual controls for access when they cannot be immediately deposited at the bank (again, stolen contributions constituted the second-highest type of fraud in the survey).
  • Only one-third of churches have their payroll approved by someone other than the preparer and then reconciled to the church’s accounting system.
  • Only 22 percent apply accounting procedures to tangible property susceptible to theft, such as electronic equipment or bookstore inventories.

“The addition of internal controls to protect your church will not cost the church anything,” Dimos observed. “Having a second person—like a staff member, trusted volunteer, or board member—be responsible to review the bank reconciliation and bank statements, or review a general ledger detail report, can provide a great deal of accountability, but not add any extra expense for the church.”

Audits and assessments

Financial audits and fraud risk assessments offer additional protections for churches, although unlike the previously mentioned preventive steps, these typically come with a cost.

An ongoing audit process “can help a church greatly reduce the risk of misappropriation and embezzlement,” Batts said. Dimos agreed, adding the use of fraud risk assessments can go one step further and “help a church test their controls and identify potential weaknesses and risk areas.”

In the survey, about 24 percent of respondents conducted outside audits with a CPA, which involves documentation and third-party support of the financial information, Laue said. Thirty percent hired a CPA or financial expert to perform a less intensive outside review, which relies on inquiries and analytical procedures, Laue noted. Almost 38 percent said they perform internal audits using church staff and volunteers.

In terms of fraud risk assessments, nearly 51 percent said they do not use them at all.

Learning from “hard lessons”

Church Law & Tax’s survey “presents a strong case for churches to be proactive in preventing fraud,” Dimos said.

The fact that 30 percent of churches reported experiencing financial misconduct at some point, and that the possibility exists even more experience it without realizing it, reveals “the risk of fraud is very real in all churches,” Salsbery said.

While many will think the steps are unnecessary, or shouldn’t be necessary because people should know better, Salsbery pointed to examples of fraud contained in the Bible—including Judas’s thefts from Jesus and the disciples’ ministry account or Ananias and Sapphira’s attempt to deceive Peter—as reminders that anyone can succumb to temptation.

“Just as policies are put in place to help prevent other sins from damaging the church, controls are needed to protect churches from the sin of fraud,” Salsbery said.

And taking time now to review practices and strengthen them—especially when no apparent problem exists—only ensures church leaders are stewarding resources well, Laue added.

“Let’s learn from the hard lessons of others,” Laue said. “I strongly encourage churches to take the step and carefully review internal controls or even hire someone to help assess and implement better internal controls now. Even if fraud was never to occur, it won’t hurt for us to operate with good processes in place.”

NEW! Safeguarding Your Church’s Finances—a multi-session video course for pastors, board members, staff, and volunteers on the basics of fraud prevention. LEARN MORE!

Matthew Branaugh is an attorney and editor for Church Law & Tax.

Reporting Financial Crime as a Matter of Stewardship

Reporting financial crime in your church is a matter of stewardship, yet many church leaders report not doing so, or even knowing how.

Reporting financial crime is a matter of stewardship, yet nearly 70 percent of churches that have experienced fraud chose not to report it to the police, according to a 2021 survey of more than 700 church leaders.

Included in This Series

The spring 2021 study on financial misconduct surveyed 706 church leaders.

About one-third of leaders said financial misconduct had taken place in their churches. Among those churches that experienced fraud, only a third filed a report with law enforcement.

In my own experience, the vast majority of churches that know or believe financial misconduct occurred are reluctant to contact law enforcement.

These leaders told me they would rather handle the matter internally. Church Law & Tax’s nationwide survey confirms this.

Additionally, nearly half of the respondents said their church boards have not discussed how they would respond to suspected fraud.

Why leaders do not report financial crimes

In the survey, leaders most frequently gave these explanations as to why they did not contact authorities:

  • We were able to recover the money without having to take legal action (27.7 percent).
  • We wanted to work on restoration with the individual(s) (26.5 percent).
  • We did not want to make it public to protect the church’s reputation (20.5 percent).
  • The church chose to forgive rather than report to the authorities (19.3 percent).
  • We did not want to make it public to protect the individual(s) (16.9 percent).
  • Legal action would go against the church’s ministry philosophy (7.2 percent).

(Note: Respondents were asked to check all that apply.)

When I speak with church leaders, their hesitations for contacting law enforcement often arise because the suspected embezzler is almost always a trusted member or employee, and church leaders are reluctant to accuse such a person without irrefutable evidence of guilt.

Seldom does such evidence exist. The pastor may confront the person about the suspicion, but the individual will often deny any wrongdoing—even if guilty. This only increases the frustration of church officials who do not know how to proceed.

Thinking of not reporting a financial crime?

Caution 1: The fraud is often far greater than the church realizes. A failure to report a financial crime may hide the true depth and extent of the crime committed. CPA Vonna Laue’s experience certainly affirms this. “Each time I have been brought into a ministry’s financial fraud situation, the amount of loss grew as more information was uncovered,” said Laue, a Church Law & Tax senior editorial advisor who advised this nationwide survey project. “It was always more than the perpetrator indicated and sometimes even they were surprised by the total.”

Caution 2: It does not matter whether the embezzler intended to pay back the embezzled funds someday. This intent in no way justifies or excuses the crime. The crime is complete when the funds are converted to one’s own use—whether or not there was an intent to pay them back.

Of course, an offender’s repayment may make it less likely that a prosecutor will prosecute the case. And even if the embezzler is prosecuted, this evidence may lessen the punishment. But the courts have consistently ruled that an actual return of embezzled property does not purge the offense of its criminal nature or absolve the embezzler from punishment for his or her wrongdoing. Also, note that church officials seldom know if all embezzled funds are being returned. They are relying almost entirely on the word of the thief.

Caution 3: Whether a church opts to notify law enforcement or not, there are tax law obligations with the Internal Revenue Service (IRS) that must be fulfilled.

Responding to suspected cases of fraud

Church leaders often learn of suspected financial misconduct because discrepancies or irregularities arise or someone submits a tip.

Top Six Red Flags

The survey indentified these signs that someone might be committing fraud:

1. Excessive control or unwillingness to have others cover his/her job duties

2. Repeated lying/deception

3. Family problems

4. Living beyond his/her means

5. Other moral or spiritual failures.

6. High levels of debt (e.g., credit card, student loans)

Along with these red flags, consider the following scenarios that point to the possibility that fraud might be taking place:

  • Giving is always higher when the person who usually does the counting is on vacation or ill during a weekend service.
  • A church bookkeeper lives a higher standard of living than is realistic given her or her income.
  • Church offerings have remained constant, or increased slightly, despite that attendance has steadily increased.
  • A church official with sole signature authority on the church checking account has purchased a number of expensive items from unknown companies without any documentation to prove what was purchased and why.

Safeguarding Your Church’s Finances—a multi-session video course for pastors, board members, staff, and volunteers on the basics of fraud prevention. LEARN MORE!


When unusual activity gets detected, or a tip is received, church leaders should take these steps in response:

1. Carefully gather information before reporting a financial crime

When evidence of actual or suspected financial misconduct surfaces, the pastor and/or church leaders should gather as much information as possible. Compile all documents and records that point to the possible irregularities and inconsistencies. The church should contact its attorney. It also should strongly consider hiring a qualified CPA firm or Certified Fraud Examiner (CFE) to conduct a more thorough investigation.

Note. Some churches have used CFEs to detect embezzlement and estimate the amount of loss. But note that CFEs are not required to be CPAs, and many have far less familiarity with accounting records than a CPA. The ideal professional would be a CPA who is also a CFE. For more information on CFEs, and to find one nearby, go to the website of the Association of Certified Fraud Examiners.

A deeper investigation offers the best way to quickly determine if the irregularities and inconsistencies are a product of human error or misconduct, and the amounts of money lost. If the cause is error, then the church can address the problem while avoiding making any erroneous and harmful accusations. If the cause is misconduct, then the church knows it must take appropriate next steps in whether to report a financial crime.

2. Sit down with the suspected perpetrator

If sufficient information points to a suspected perpetrator, at least two church leaders, and possibly the church’s attorney and the CPA or CFE (if one is hired) should meet with the person. Provide some general descriptions about the irregularities or inconsistencies that have arisen and ask the person what they can tell you about them. Take careful notes, including any questions or comments the person makes.

If the person confesses and asks how things will be handled, explain the criminal nature of the offense. Also explain the legal requirements to contact the IRS (see more below).

Caution. Always keep in mind that embezzlement is a criminal offense. Depending on the amount of funds or property taken, it may be a felony that can result in a sentence in the state penitentiary.

If the person confesses, evaluate with the church’s attorney the possible ways the person can possibly repay the stolen funds—but know that such a step does not absolve the person of his or her crime, nor does it eliminate potential consequences with the IRS. Also know upfront that such agreements by embezzlers to repay funds often are not honored.

3. Contact authorities

If there is a confession, or if the evidence clearly indicates the person stole church funds, church leaders must consider turning the matter over to the police or local prosecutor and the IRS. These are very difficult decisions, since doing them may result in the prosecution, penalization, and possible incarceration of a member of the congregation.

Note. Embezzlers never report their illegally obtained “income” on their tax returns. Nor do they suspect that failure to do so may subject them to criminal tax evasion charges. In fact, in some cases. it is actually more likely that the IRS will prosecute the embezzler for tax evasion than the local prosecutor will prosecute for the crime of embezzlement. Along with contacting local authorities, your church also should contact the IRS regarding the matter.

Before you “forgive and forget”

In some cases, a person confesses to the misconduct. Often, this is to prevent the church from turning the case over to the police or the IRS. Perpetrators believe they will receive “better treatment” from their own church than from the government. In many cases, they are correct.

Lead Your Church With Confidence—Become a Church Law & Tax Member Today.

It often is astonishing how quickly church members will rally in support of the embezzler once he or she confesses—no matter how much money was stolen from the church. This is especially true when the perpetrator used the stolen funds for a “noble” purpose, such as medical bills for a sick child.

Many church members demand forgiveness for the perpeator. The idea of turning the perpetrator over to the authorities is both shocking and repulsive. But is it this simple? Should church leaders join in the outpouring of sympathy? If the embezzler confesses, should church leaders leave it at that?

These are questions that each church will have to answer for itself, depending on the circumstances of each case.

Before forgiving the embezzler and dropping the matter, though, church leaders should consider the following.

Embezzlement is a crime breaches a sacred trust

The church should insist, at a minimum, that the embezzler must:

  • disclose how much money was embezzled,
  • make full restitution by paying back all embezzled funds within a specified period of time, and
  • immediately and permanently be removed from any position within the church involving access to church funds.

Closely scrutinize and question the amount of funds the embezzler claims to have taken. Remember, you are relying on the word of an admitted thief. That is why it is important to involve the church’s attorney, as well as a CPA or CFE, when suspicions first arise.

The embezzler must return the stolen money within a specific time or sign a promissory note agreeing to pay back the funds within a specific time.

Caution. An attorney should be consulted before the church has any discussions about an agreement with the embezzler about paying back stolen funds.

The church faces tax consequences for not reporting financial crime to IRS

The church needs to tell the embezzler that the stolen money is taxable income. Therefore, failure to agree to either of the above alternatives will force the church to issue him or her a 1099 (or a corrected W-2 if the embezzler is an employee) reporting the embezzled funds as taxable income.

If funds were embezzled in prior years, then the employee will need to file amended tax returns for each of those years to report the illegal income since embezzlement occurs in the year the funds are misappropriated.

Failure to report taxable income will subject the church to a potential penalty (up to $10,000) for aiding and abetting in the substantial understatement of taxable income under section 6701 of the tax code.

Note. If an employer is able to determine the actual amount of embezzled funds as well as the perpetrator’s identity, the full amount may be added to the employee’s W-2, or it can be reported on a Form 1099 as miscellaneous income. But remember, do not use this option unless you are certain that you know the amount that was stolen as well as the thief’s identity.

If the full amount of the embezzlement is not known with certainty, then church leaders have the option of filing a Form 3949-A (“Information Referral”) with the IRS. Form 3949-A is a form that allows employers to report suspected illegal activity, including embezzlement, to the IRS. The IRS will launch an investigation based on the information provided on the Form 3949-A. If the employee in fact has embezzled funds and not reported them as taxable income, the IRS may assess criminal sanctions for failure to report taxable income.

Caution. If the embezzler agrees to pay back the stolen money and does so, does this convert the embezzled funds into a loan, thereby relieving the employee and the church of any obligation to report the funds as taxable income in the year the embezzlement occurred? The answer is no.

Most people who embezzle funds insist that they intended to pay the money back and were simply “borrowing” the funds temporarily. An intent to pay back embezzled funds is not a defense to the crime of embezzlement.

The courts are not persuaded by the claims of embezzlers that they intended to fully pay back the funds they misappropriated. The crime is complete when the embezzler misappropriates the church’s funds to his or her own personal use.

There is yet another problem with attempting to recharacterize embezzled funds as a loan. If the church enters into a loan agreement with the embezzler, this may require congregational approval. Many church bylaws require congregational authorization of any indebtedness, and this would include any attempt to reclassify embezzled funds as a loan. Of course, this would have the collateral consequence of apprising the congregation of what has happened.

Reporting financial crime may be a matter of fiduciary responsibility and good stewardship

Viewing the offender with mercy does not mean forgiving the debt and ignoring the crime. Churches are public charities that exist to serve religious purposes.

Donors give money in support of those purposes.

Forgiving and ignoring embezzlement may not serve those purposes.

The church should care about other churches

As Church Law & Tax’s findings also reveal, the average tenure of embezzlers tended to be less than 10 years, and oftentimes measured less than 5 years.

Letting an offender off the hook and sending them on their way exposes other churches to the same behavior. No record of the offender’s activities will be available—and that means even a church that follows healthy screening and selection steps (including criminal background checks) will be unable to detect this person’s past offenses.

As Laue, the CPA who advised the survey project, also notes: “We have a responsibility to protect Kingdom resources, whether they are ours or someone else’s, and we can’t do that if we don’t take the necessary steps to make others aware of the fraudulent activity.”

The bottom line: Churches should report financial misconduct as an act of stewardship for the global church.

Case Study: A Repeat Embezzler. A church administrator embezzled over $350,000 from his church. He wrote unauthorized checks to himself and others from the church’s accounts, and used the church’s credit card on over 300 occasions to purchase personal items. Police officers were called and he made a full confession.

The church secured a $1 million civil judgment against him. He was prosecuted and convicted on four felony counts including forgery and theft, and he was sentenced to 32 years in prison based on “aggravated circumstances” (the large amount of money that had been stolen, the care and planning that went into the crimes and their concealment, the fact that a great number of checks were stolen and unauthorized credit card charges made, and breach of trust).

Several years earlier, the administrator embezzled a large amount from a prior church employer. However, that church chose not to initiate criminal charges, believing that he had learned his lesson.

This case study is taken from the “Embezzlement” section of the Legal Library.

Answers to other key questions about reporting financial crimes

Find detailed answers to the following questions about embezzlement in the Legal Library:

  • How does embezzlement occur?
  • How does a pastor handle someone who confesses to embezzlement during a confidential counseling session?
  • Can a church require a suspected embezzler to take a polygraph test?
  • How can a church avoid making false accusations?
  • How should a church discuss embezzlement with the congregation?

And as both the study and my own experience show, a most-troubling aspect of financial misconduct in churches is the unfortunate reality that many pastors and other leaders choose to handle fraud or suspected fraud internally—meaning they avoid involving a CPA or CFE, the IRS, and law enforcement. But the failure to report can be problematic for the reasons I have detailed in this article.

For the sake of practicing good financial stewardship, it is my hope and prayer that churches will carefully consider the advice I offer in this article. Most importantly, my hope is that churches will seek do all they can to prevent financial misconduct from happening in the first place through implementing a system of sound internal control.

Attorney Matthew J. Branaugh, content editor for Church Law & Tax, contributed to this article.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Loved and Trusted: What Shocks Us Most About Fraud Perpetrators

A closer look at the men and women who steal from churches—and the red flags leaders should watch for.

Last Reviewed: May 13, 2025

Church Law & Tax’s nationwide survey of congregations and the financial misconduct they experience paints four portraits of the types of individuals who most commonly steal from their churches.

What’s most shocking?

The positions of trust the men and women who commit these crimes carry.

The study revealed that common perpetrators included middle-aged men who served as treasurers or board members, sometimes for upwards of 10 years; men and women in their 30s and 40s who worked in their roles as administrators and treasurers for less than 5 years; and male pastors in their 40s.

And then there’s the group of perpetrators that may be the most surprising of all: men and women, typically 60 or older, who held their positions for 20 years or more. The crimes committed by these individuals “were disproportionately expensive” compared with other offenders, according to Arbor Research Group, the firm Church Law & Tax commissioned to survey church leaders nationwide.

“Just as fraud can happen in any sized church, fraudsters can be any age, any gender, and perform any function in the church,” said Rollie Dimos, a Certified Fraud Examiner (CFE) who reviewed the survey results ahead of publication and provided comment. “That’s why it is so important to put financial processes in place to actually protect our church team members from being tempted to steal God’s money. Internal controls are like guardrails that help keep people honest and accountable.”

Portraits of the perpetrators

The national survey fielded responses from 706 leaders and revealed nearly 30 percent served in churches that had experienced some form of financial misconduct. Nearly half said the crimes occurred within the past 10 years (see “Every Church Is at Risk for Fraud. Here’s Why”).

Those who suffered from some form of fraud answered questions exploring the acts committed and the people responsible for them. Through those responses, Arbor was able to classify the four classes of perpetrators, shedding more light on the common traits they possess.

Class 1

Arbor characterized this group as “middle-aged, non-pastoral male leaders with some experience in their roles.” These men frequently served as treasurers, board members, or in non-pastoral leadership roles.

Class 2

This group constituted “older, experienced men or women in leadership,” Arbor noted. They often served in their roles—which varied—for 20 years or more. A quarter of these cases resulted in losses of $250,000 or more, while half caused losses ranging anywhere from $10,000 to $250,000.

“The worst-case scenario for a church is to have fraud committed by long-tenured leaders in the church,” said Nathan Salsbery, a CFE and a partner and executive vice president for nonprofit CPA firm CapinCrouse who also previewed the survey results. “And if those leaders had unmonitored access to the cash coming in, the cash going out, and the accounting records, the financial losses can be staggering.”

Class 3

This class featured the highest number of perpetrators, Arbor said. It, too, was evenly represented by men and women, but their ages ranged from 30 to 49 and their average tenures were 5 years or less. Among these individuals, about one-third worked as administrators, while 20 percent served as treasurers. Overall, 20 percent were unpaid volunteers.

Class 4

This group was comprised entirely of male pastors “typically 40 to 49 years of age and in their role 1 to 5 years,” Arbor noted. The thought of a pastor betraying his congregation in this way exacts significant tangible and intangible damage, Salsbery noted. “Lack of healthy accountability for senior leadership is one of the most significant risks to a church,” he said.

Red flags to monitor

The top “red flag” identified among the fraud cases disclosed in the survey—representing 32 percent—was “excessive control or unwillingness to have others cover his/her job duties,” according to the results. In fact, 47 percent of the cases weren’t discovered until another person performed the perpetrator’s duties for one reason or another.

The second-highest red flag was “repeated lying or deception,” followed by “family problems,” “living beyond his/her means,” and “other moral or spiritual failures.”

Lower on the list were “medical issues in family,” “expressed lack of job satisfaction,” and “loss of spouse’s job.”

When asked about red flags, a sizable portion of respondents selected “Other.” Asked to clarify, the bulk of the respondents said there either were no red flags, the person wasn’t caught and the fraud was later detected, or the red flags weren’t exhibited within the church and only learned of later.

In his comments about red flags, Dimos noted the “fraud triangle”—the illustration often used to describe financial misconduct. It forms a triangle with these three points: pressure (or incentive), rationalization, and opportunity.

“As church leaders, we can’t control what financial pressure someone may experience, like a family medical issue, nor can we stop people from rationalizing that it is okay to steal from the church,” he said. “But church leaders can create processes that prevent someone from having the opportunity to abuse funds.”

Red flags are consistent in other sectors

Interestingly, Church Law & Tax’s survey results closely tracked with the 2020 Report to the Nations by the Association of Certified Fraud Examiners (ACFE), Salsbery said. In particular, with greater positions of authority and tenure came greater degrees of losses for the organizations, he added.

The ACFE report showed the median losses for employee-caused fraud measured $21,000, then jumped to $95,000 for managers and supervisors, and $250,000 for executive-level positions.

“This correlation of higher fraud losses for long-tenured, experienced leaders makes sense. Given their influential leadership roles, they usually have more access to the assets of the church and have had that access for a long time,” Salsbery said. “The first two questions I ask ministries when I conduct [fraud investigations] is: (1) How long was the person in the role? and (2) What access did they have to bank accounts, other assets, and financial activities of the church during that time?”

Given the frequency and consistency of the red flags, whether in secular settings or church settings, leaders are actually positioned well to help protect their churches, noted Vonna Laue, a CPA and senior editorial advisor for Church Law & Tax who co-led the survey project.

“The red flags have not changed over the years in any study you review, and they are the same across entities from churches to Fortune 500 companies,” Laue said.

Leaders need “an awareness of the red flags,” she added, and give careful consideration when those serving in financial roles exhibit “at-risk behaviors.”

NEW! Safeguarding Your Church’s Finances—a multi-session video course for pastors, board members, staff, and volunteers on the basics of fraud prevention. LEARN MORE!

Matthew Branaugh is an attorney and editor for Church Law & Tax.

Key Tax Dates October 2021

Deadline for church employees with six-month extensions for filing 2020 tax returns.

Monthly requirements

If your church or organization reported withheld taxes of $50,000 or less during the most recent lookback period (for 2021 the lookback period is July 1, 2019, through June 30, 2020), then withheld payroll taxes are deposited monthly. Monthly deposits are due by the 15th day of the following month.

Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes. Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from the employee’s wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

Semiweekly requirements

If your church or organization reported withheld taxes of more than $50,000 during the most recent lookback period (for 2021 the lookback period is July 1, 2019, through June 30, 2020), then the withheld payroll taxes are deposited semiweekly.

This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.

Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from the employee’s wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.

October 15, 2021: Tax returns due for church employees with extensions

Last day to file a 2020 federal income tax return for taxpayers who obtained an automatic six-month extension by filing a Form 4868 by April 15, 2021.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

RLUIPA Case Study: City Walk Urban Mission

How one religious organization successfully navigated zoning codes.

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A zoning board sought to shut down City Walk Urban Mission in Tallahassee, Florida, through the enforcement of zoning code. This video case study shows how Pastor Renee Miller, the executive director of City Walk, worked with attorney Noel Sterett to successfully navigate the issue and continue the ministry’s work in Tallahassee.

Church Law & Tax members can watch the full Religious Land Use & the Church: Virtual Roundtable series, which includes an insightful discussion with leading attorneys, a companion PDF guide, and another video case study featuring a church that faced government challenges to a property it planned to purchase.

Matthew Branaugh is an attorney and editor for Church Law & Tax.

Video Series

Religious Land Use & The Church: A Virtual Roundtable

A virtual roundtable of attorneys discusses an often overlooked religious land use law.

The Religious Land Use and Institutionalized Persons Act (RLUIPA) was passed unanimously in 2000 by the US Congress and signed into law by President Bill Clinton. But nearly 25 years later, many church leaders remain unaware of how this law can help them avoid—or at least navigate—challenges posed by governments, agencies, and associations regarding the purchase or use of property for worship and other religious purposes.

Not yet a member? View the series introduction and one case study for free.

This virtual roundtable, featuring attorneys Midgett Parker, John Mauck, Noel Sterrett, and Eric Treene, explores why every church should understand the ins and outs of this valuable law, even if your congregation has yet to experience any obstacles from local government or zoning officials or neighborhood associations. It is conveniently set up in five segments for church leaders to watch either individually or as a board, committee, or leadership team.

In addition, Matthew Branaugh, an attorney and editor for Church Law & Tax, shares two video case studies regarding how RLUIPA helped two pastors successfully overcome obstacles presented by their local officials.

To get the most out of the roundtable, we suggest you download this PDF. It will help guide you through the video series and offer helpful notes and highlights for future reference.

Segment 1: Roundtable Introduction

Jump to:

Case Studies

17 Changes Relevant to Churches in Newest Robert’s Rules of Order

Leaders should note these changes before their next official church business meeting.

Last Reviewed: July 24, 2025

Does Your Church Use Robert’s Rules?

If your church references Robert’s Rules of Order Newly Revised in its bylaws—or uses it by tradition—it’s important to know that the 12th edition, released in late 2020, is now the current authority. This edition contains more than 89 substantive changes, and if your bylaws don’t specify an edition, the 12th edition now applies automatically.

Why This Matters

Most church bylaws that name Robert’s Rules automatically default to the latest edition. If your bylaws specify an older edition, such as the 7th (1970), you must use that version unless you amend your bylaws to state “the current edition.”

Key Point: If your church uses Robert’s Rules but hasn’t reviewed the updates in the 12th edition, now is the time.


Other Parliamentary Authorities

While Robert’s Rules is the most common, other worthy options exist.


What’s New in the 12th Edition?

Below are 17 significant changes church leaders should understand.

1. Motion to Lay on the Table

  • Cannot be used to kill debate.
  • Should only be used to set aside discussion temporarily for urgent matters.
  • Use “Postpone Indefinitely” to permanently end debate.

2. Vice President’s Role Clarified

  • Vice presidents act only when the president is absent.
  • Cannot appoint committees if the bylaws assign that to the president.
  • In succession cases, the VP becomes president unless bylaws state otherwise.

3. Executive Sessions

  • Discussions in executive session are secret.
  • Actions taken can be disclosed only as needed to implement them.
  • Assemblies may vote to release more info by amending previously adopted actions.

4. Electronic Voting

  • Secret ballots can be conducted using electronic keypads.
  • Write-in options and independent tallies are required for elections.

5. Board Minutes Access

  • Normally, only board members may view minutes.
  • Assemblies can vote to release minutes with a two-thirds vote or majority vote with notice.

6. Terms of Office

  • Actual terms may vary depending on meeting dates.
  • Bylaws should specify start and end points clearly.

7. Bylaw Revisions Must Be Authorized

  • Only a properly authorized committee can draft a full bylaw revision.

Critical Distinctions: Bylaws vs. Robert’s Rules

Robert’s Rules has increasingly addressed church governance areas better left to:

  • Church charters
  • Bylaws
  • Denominational documents
  • Nonprofit corporation laws

Rule 1: Church bylaws always override Robert’s Rules.

Rule 2: If Robert’s Rules covers non-parliamentary topics, those provisions are secondary to governing documents.

Examples:

  • If bylaws state a 20% quorum, and state law says 10%, use the bylaws.
  • The sequence of articles in your bylaws does not need to match Robert’s Rules.

Additional Key Updates from the 12th Edition

8. Sample Rules for Electronic Meetings

  • Includes templates for various formats: internet, phone, hybrid.
  • Legal review is advised before adoption.

9. Excluding Nonmembers from Meetings

  • Assemblies can exclude nonmembers by a majority vote without entering executive session.

10. Ratifying Invalid Meetings

  • Actions taken at unauthorized meetings can be ratified.
  • Example: Online meeting held without bylaw approval can be validated post hoc.

11. Changing Ballots

  • Votes taken by secret ballot cannot be changed after submission.

12. Secrecy of Ballots

  • Ballot voting requirements cannot be suspended, even by unanimous vote.

13. Secret Ballots = Ballots

  • Clarifies that all ballots are considered secret by definition.

14. Ballot Voting by Mail

  • Bylaws should address tie-breaking procedures.

15. Ex Officio Officers

  • If not under the organization’s authority, they can vote but aren’t counted in quorum.
  • If they are officers, they must participate and count toward quorum.

16. Receiving Reports

  • No motion needed to “receive” a report.
  • Reports without recommendations can be filed.
  • Accepting a report = endorsing it fully.

17. Notice of Bylaw Amendments

  • Bylaws should specify deadlines for notice and delivery of amendment text.

Navigating Conflicts Between Authorities

Use this general order of precedence:

  1. Church charter or articles of incorporation
  2. Constitution (if any)
  3. Bylaws
  4. Denominational rules (if applicable)
  5. State nonprofit law
  6. Robert’s Rules of Order

If a conflict arises (e.g., quorum size or officer removal), always defer to the highest-ranked authority relevant to the issue.

Caution: If your bylaws or state law already cover an issue (like discipline or quorum), Robert’s Rules is not controlling.


Bottom Line for Church Leaders

Before adopting the 12th edition of Robert’s Rules—or assuming it applies—review your bylaws and understand what governs your church. If needed, seek legal counsel.


Additional Reading

Attorney Sarah Merkle, a professional registered parliamentarian and senior editorial adviser for Church Law & Tax, wrote a five-part series, “Mastering Meeting Basics,” which dives deeper into planning and leading church business meetings. She also authored a companion four-part series detailing a hypothetical case study that applies the rules and principles.


We’ve used a combination of AI and human review to make this content easier to read and understand.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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Frank Sommerville is both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.
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