Church and Taxes : LUSENET : A.M.E. Today Discussion : One Thread

Why is the church management not addressing the seriousness of its auxillary churches not paying or withholding the required taxes as set forth by current law. This law has been effect since 1974. Majority of A. M. E. Churchs ignore this requirement.

-- Anonymous, June 06, 2002



Seriously, this is a very poorly understood area of church administration. For example, I thought withholding was "required" only recently, after a case that was litigazted in the mid-90s.

But it is quite a serious issue, and all of our local assemblies, especially their operations entitities, should become familiar with Federal requirements. Stewards should also become familiar with surrounding issues, such as the role of Social Security, the impact of the connectional retirement plan, the responsibility of the church to contribute to the plan for the pastor, the tax implications of employees other than the pastor, etc.

Thanks for asking the question.

-- Anonymous, June 07, 2002

I have recently addressed to question of church and taxes at our Annual Conference in the 3rd District. Bishop Webster was very interested and receptive to the seminar that I put on concerning the federal and state laws which churches are required to follow. I also enlightened the Bishop that even though by law churches are considered tax exempted from some taxes uner 501 (C) 3 they must also be issued an exemption letter from the AME Board of Incorporators Washington DC. I do own a small business which specializes in Church Management and if any AME Church wishes to have a seminar on this subject please feel free to contact me. PS, I am an AME member and for that part I am very concerned on the future of our churches. May God continue to bless us.

-- Anonymous, November 15, 2002

Mr. Beaty, I respectfully disagree with you about AME Churches and taxes. Each AME Congregation according to church law must be incorporated as a Non-Profit Corporation (501c(3). Next the church must apply to the IRS on (SS4) for Tax Exempt status. Corporate Tax is different in different states. In Texas we must apply to the Secretary of State (Texas) to get relief from Corporate taxes. Now, as for withholding taxes from employees, the persons working can be treated as Self- Employed". This reduces the book keeping related to Social Security taxes. Normally I would not have responded to this post byt as the Chairman of the Northeast Texas Trustees, I spend alot of time helping churches in this matter.

Be Blessed,

Pastor Paris

-- Anonymous, November 16, 2002

Dear Rev. Paris,

I do understand your point of view but because our churches are connectional, they do not have to submit for their own 501 (C) 3 status. Yes, each church must obtain their own EIN but they also must obtain the appropriate exemption which goes with it. This exemption has already been obtained by the AME Board of Incorporators, Washington, DC. Each church must submit a request to the Board stating that they meet all federal and state tax laws and in turn the Board will issue a group exmption certificate to the requesting church. Also, under the law the only person who is considered as self-employed is the minister all other persons i.e (secretary, music directors, custodians) are not considered or are they catagorized as self-employed. These persons are employees of that particular church and as such all required taxes must be withheld and paid. This tax requirement is so misunderstood by many of us. If you wish to check on the answer that I just gave please review IRS Publication Number 517 Social Security and Other Information for Members of the Clergy and Religious Workers which states that If you are a religious worker (church employee) and are not in one of the classes already discussed, your wages are subject to social security and Medicare tax (FICA) not Self-Employed (SE) tax. I understand that Ministers are well versed in a wide range of matters but the federal and state tax regs is not one of them.

-- Anonymous, November 17, 2002

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