Copyright 2011© What the Guidebook Doesn’t Tell You California law and other important issues that affect your Church

Here is What the IRS Says You are a 501 (c)(3) business tlaw.com/lr-04.htmhttp:// tlaw.com/lr-04.htm Focus of organization's purpose must be to benefit the community or society as a whole, not just the organization's members and their families or other select individuals. A 501(c)(3) organization may not devote a substantial part of its activities for lobbying (try to influence) purposes. (section 2A.1)

Four Things the IRS Will Come After the Church For Nonpayment of employment taxes. Embezzlement. Political issues. Nonpayment of unrelated business income (UBIT).

California Tax Issues FederalCalifornia 941 (quarterly) and 944 (annually)DE 9 (quarterly) and DE 7 (annual) W-4DE DE 542 (independent contractor) w/in 20 days W-2 (Feds will send to state)DE-1NP w/EDD: w/in 15 days after paying wages to an employee W-9DE 34 w/EDD: w/in 20 days of new hire or rehire I-9 not filed with government; kept on file at church FTB 3500A w/ Franchise Tax Board – one-time filing 592-B w/ CA out-of-state speaker: 7% of wages or honorariums paid over $600

California Statement of Information Filed every other year. Must notify them if you move – they do not forward form. Church is suspended if you fail to send in form. Effects of Suspension: Corporation prohibited from – transacting business – Answering a lawsuit filed against it – Initiating litigation – Protecting and preserving its name

California Statement of Information Any contract executed by a CA suspended corp. is voidable at the demand of the other party. Any person who attempts to use corporate privileges while suspended is subject to fines and/or imprisonment Only exceptions: Name change by amendment to articles of incorporation Apply to Franchise Tax Board for tax-exempt status Suspended corp. must pay taxes and file tax returns even if no money is earned STAY UP TO DATE:

Contributions Cash (check, debit card) Securities Real estate Life insurance Personal property Charity auction or bargain sales Gifts are made at the point of “irrevocable giving over” (Exodus 29)

Not Contributions Service Use of property Gifts made to individuals Private school tuition

Investment Considerations Which types of investments are acceptable risk to the church? Who will administrate the funds – a person or committee? What percentage of the total funds will be invested in the stock market? Can the broker be a member of the church? (I strongly advise that the broker not be a member of the church because of conflict of interest.) What ethical standards will guide the church's investments? Will the church invest in alcohol, tobacco, gambling, pornography or abortion? What documents will guide the actions of the investment committee? for Policy and Procedures manual.

Budgeting Process Values, Mission and Vision statements first. One- two- and three-year goals. Action plans. Answer the questions.

Budget and Stewardship Promotion Budget promotion packets Tracts Brochures Videos Testimonies Podcasts Twitter and Facebook

Budget and Stewardship Promotion Bible studies (time, tithe, talent, touch) Personal money management seminars Will and trust seminars Investing in insurance seminars

Trustees Establishing and reviewing procedures for the church's financial management along with the treasurer. Represent the church in legal matters. Serve as legal guardians of all church property. Give input and financial advice to the stewardship committee and pastoral team as needed. Execute bank notes, deeds and other legal documents after receiving approval from the church body.

Trustees Examine quarterly financial statements along with the treasurer. Investment policy and oversight. Fulfill the laws of the State of California while serving as trustee. Assist in the awarding of contracts for work that must be done to improve or repair church buildings or property. Written job description gives continuity

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