To help ensure you have accurate information in time to file 1099′s, it is a good practice to have your guest complete the W-9 form before services are rendered in time for you to proof it for omissions and errors. This is critical with the implementation of “The Small Business Jobs and Credit Act of 2010″ that increases fees for errors, omissions, and filing late.

Section 2102 of the Small Business Jobs Act of 2010 increased penalties for failure to file information returns, failure to furnish correct payee statements, and for intentional disregard of the law.

 What does that mean for returns filed January 1, 2011 and thereafter?

•  It means that if you pay an unincorporated landlord or any minister, singer, guest lecturer, or contractor who is paid nonemployee compensation (issued a W2 by your church) $600 or more during a calendar year and fail to issue the minister a 1099 your church can incur a $250 penalty for intentional disregard per return you failed to issue. Let’s say you failed to file ten—that is $2,500 in penalties.

• It means if you pay an honorarium and failed to receive a completed W-9 from the payee, which lists his or her Social Security, legal name, address, and signature, then your church is subject to fines and penalties. The W-9 is what provides you with the information on the payee you will need to complete the 1099, extremely important with penalties now being doubled.

• It is your church’s legal obligation to have the W-9 completed. A few years ago a minister who had a great relationship with the church leadership where I worked stopped in town one weekend and they allowed him to minister and even did a special offering for him in addition to the honorarium. It was quite a significant amount. I called the guest minister to obtain an email address where I could send the W-9 so he could bring the completed form with him that morning when he picked up the check. He informed me that he would not be filling out a W-9. I notified the pastor and quoted him IRS regulations and he told me to do what the law requires. In effort to obtain a completed W-9 when the minister arrived I explained to him as gently as possible that IRS guidelines required me to withhold 28% from his check if he refuses to provide me his Social Security and that I would need to issue a new check later that day when I can obtain the necessary signatures. He stood angrily in front of my desk and then snatched the W-9 off the desk and completed it. I then released the check. It was an uncomfortable situation, but IRS laws trumped my discomfort. My responsibility was to the church and to ensure I did not put it at risk because of fear or awkwardness. On a sad note, I did lose a great deal of respect for that minister.

• Now if your church is renting a building from a sole proprietor who refuses to complete a W-9 (as that can get pretty ugly) or if your pastor or church board decides “it’s better to just issue the honorarium without any fuss,”  the law is very clear in what must done—you must begin backup withholding immediately on any reportable payments for any payee refusing or neglecting to provide a TIN. The current rate for US citizens is 28%.  See IRS Publication 1281 for further guidance. (Always use wisdom and operate within federal, state, county and your church’s guidelines and seek an attorney when dealing with rental issues)

• The changes also mean that if you have a typo, misspelled name, transposed numbers, or omissions within the Social Security, your church is subject to penalties from $30 to $100 per return. Please note that the $30 only applies to return errors corrected within 30 days of submission. The question is how many of us review 1099s we have issued after we have already filed them with the IRS? So, your penalty will more than likely be $100 per form issued with errors. Because it’s normally a year or more when the IRS informs you of your error.

Things to know:

• The IRS may impose a $50 penalty for any payee who fails to provide the payer a correct TIN.
• A payee who provides false information on a form W-9 is subject to a $500 penalty, criminal penalty, and/or imprisonment.
• The payee is not legally required to sign the form W-9 unless he/she has been notified  that he/she previously gave an incorrect TIN.
• Failing to obtain a W-9 and failing to withhold backup withholding subjects your church to being assessed tax at the 28% backup withholding rate, as well as interest and penalties for lack of compliance.

Since 2008 we regularly receive emails from churches who have been misinformed regarding filing the Form 990-N. Some are so upset because they have attended seminars or received marketing materials from some organizations informing them that they are on the verge of losing their exempt status.

Below is the information regarding who is legally required to file Form 990-N each year. If you are not a church but have a nonprofit ministry you need to be aware what is required of you. Failure to comply will cause you to lose your nonprofit status and even once it is reinstated, your ministry will still appear on the “Auto-Revocation List.”

What’s the big deal? Donations given to you during the time your nonprofit status has been revoked are not tax-deductible donations. In other words, donations given to your ministry cannot be claimed on your donors’ taxes.

Also, an organization that has lost its tax exempt status may be required to file federal income taxes via Form 1120.

Who Must File

Most small tax-exempt organizations with gross receipts that are normally $50,000 or less ($25,000 for tax years ending on or after December 31, 2007 and before December 31, 2010) must file the e-Postcard. Exceptions to this requirement include:

• Organizations that are included in a group return,
• Churches, their integrated auxiliaries, and conventions or  associations of churches, and
• Organizations required to file a different return

Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less ($25,000 for tax years ending after December 31, 2007 and before December 31, 2010) are required to electronically submit Form 990-N, also known as the e-Postcard, unless they choose to file a complete Form 990 or Form 990-EZ instead.

If you do not file your e-Postcard on time, the IRS will send you a reminder notice. There is no penalty assessment for late filing the e-Postcard, but an organization that fails to file required e-Postcards (or information returns – Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status. The revocation of the organization’s tax-exempt status will not take place until the filing due date of the third year.

The e-Postcard is due every year by the 15th day of the 5th month after the close of your tax year. For example, if your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. You cannot file the e-Postcard until after your tax year ends.

Information Needed to File e-Postcard

Completing the e-Postcard requires the eight items listed below:

1. Employer identification number (EIN), also known as a Taxpayer Identification Number (TIN)).
2. Tax year
3. Legal name and mailing address
4. Any other names the organization uses
5. Name and address of a principal officer
6. Web site address if the organization has one
7. Confirmation that the organization’s annual gross receipts are $50,000 for tax years ending on or after December 31, 2010).  Note: Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses
8. If applicable, a statement that the organization has terminated or is terminating (going out of business)

Please to visit IRS.gov for further assistance.

http://www.irs.gov/charities/article/0,,id=169250,00.html

IRS 2012 Standard Mileage Rates

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You have been entrusted with an awesome ministry that will impact lives, help direct and bring order where needed, and aid in expanding the kingdom of God. You will assist in planning and preparing community events that will touch lives. You will have days where you experience sheer joy in this ministry. There will also be days when you will feel overwhelmed, under qualified, ill-equipped. However, it is in those days that you will draw on the strength of the call — knowing that God has chosen you for “such a time as this.”

 Understanding the Call to Church Administration Excerpts

Saint Augistine said, “Pray as though everything depended on God. Work as though everything depended on you.”

You could spend years learning these powerful skills, making your share of mistakes along the way or you could take a short-cut by attending this workshop. This equipping workshop will teach you in one power-packed day the proven skills of church administration and office management—techniques that will make the difference between a so-so office and church and one that is outstanding.

Early Registration Deadline: May 3, 2011

Late Registration Fee: $55.00 (after May 3, 2011)

All registrations must be received by May 10, 2011.

• Succeeding in Effective Church Administration (includes general operations overview and forms you must know about and know how to complete)
• Copyrights and Churches (an overlooked violation that is costing churches and pastors a great deal)
• Understanding Your Role as a Board Member (trustee, deacon, board of elders, etc)
• Financial Accountability, Internal Controls, Tax Laws
• Grants and Other Church Funding
• Panel Discussion

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Learn how to better protect your church from seen and unseen pitfalls.

Is your church an older church looking for money for repairs or renovations? Come and find out what funding is available.

Are you a new church looking for free furnishings or at least at significantly discounted rates? Come and discover resources for you.

Come learn of fundings beyond tithes and offerings or government funding

Is your house in order? You will leave with a wealth of information to help bring order to your church office.

 This is a training workshop.

You will receive valuable training, unlike any other. Receive answers to your questions and acquire useful information to help you excel in your role as a pastor, ministry assistant—including board members, church secretaries, financial secretaries, church administrators, elders, deacons, and more!

CLICK HERE TO REGISTER NOW

What is Church Administration? It is a gift from God. Training can equip you, but God is the only one who can call and empower you to serve effectively in whatever your role is in church administration.

Good administration is getting others to work together.  You must understand that church administration is a ministry centered on people, not techniques and paperwork.  It is an art of management, not manipulation.  It requires faith in God, sensitivity, integrity, timing, administrative skills, and resourcefulness. 

Ministry Assistants are leaders – they have the ability to influence people.  Many serving in church administration are gifted with natural talents, yet these natural talents are sharpened through experience, training, and empowerment from God.

Effective church administration gets the bulk of the members to see the vision, grasp the vision, communicate the vision, and impart the vision to others. Failure to do so only causes chaos in your church.  You will have Committee A doing one thing, Committee B doing something else, and Committee C at odds with everyone.

Have you ever noticed that there are some secretaries who are actually administrators – they are able to influence and lead people?  Their warm smile, sincere concern, and inviting attitude just naturally draw people to them. However, there is so much more to them. They are organized, decisive, creative problem-solvers,  excellent decision makers, resourceful, and peace-makers, all qualities of a good administrator.

 In church administration one of the key things we must remember, is to place people where there strengths and/or calling are, not just where there is a vacancy. There are some administrators who are really outstanding receptionists, but inefficient administrators.  

I recall spending five days training a church administrator who was really an amazing secretary, but had been drafted into being the church’s administrator. During the first day of training I felt in my heart that she was not an administrator. After developing a relationship and earning the right to be heard (by day two), she began to pour her heart out to me. Little did her pastor know, for months she had been overwhelmed and unhappy and was at that time on the brink of not only resigning her position, but leaving the church. She loved her church, but felt she would be letting it down if she resigned. Her husband had become disillusioned with the church and felt it was taking advantage of his wife’s kindness and “inability” to say no. Therefore, she and her husband had decided it was best to leave the church. Day three of the training was spent with me still training, having two other staff members to sit in on parts of the training that I believed would further overwhelm her, but me also ministering to her and informing her that becasue the church hired me I had to fiduciary duty to inform the pastor of the dilemma, which I did. It allowed her the opportunity to voice her concerns. It is important to remember that ministry assistants by nature love to give, share, and do. Many have to be taught boundaries, how to say no without feeling guilty, and so forth. Seasoned ministry assistants have learned this through some hard knocks, dissappointments, long hours, and unfortunately fatigue or burnout.

Day four we met with the pastor to implement a resolution. Day five was spent with me teaching her boundaries, even as she returned to her position as church secretary, and quick tips to help enhance her secretarial skills.

Nothing is more frustrating than serving in the wrong role. It wearies the ministry assistant, the pastor, and the church members.

In days to come we will be adding information on roles, qualifications, and the responsibilities that accompany them. We will discuss the benfits and drawbacks from hiring within the church, or non-members, and so forth.

Please submit your inquires and concerns, as well as “best-practices” that have help you to become a better ministry assistant.

Check back soon for new entries!

 *Scripture quotations taken from the Amplified Bible, Copyright © 1954, 1958, 1962, 1964, 1965, 1987 by The Lockman Foundation. Used by permission.