Author: Alyssa Lofggren

Churches are busy places! Because the main business of the church is spreading the message of the Gospel and helping people, it is sometimes easy to let certain matters slide. Please remember that—regardless of how the church actually operates day by day—if you are ever in a lawsuit, you are held accountable for the way the church should be run according to its constitution and bylaws!

In some cases, churches do not even know where their organizational documents are. While most churches have their documents extremely well organized, you are not in a good position if you “think that one of the deacon’s wives has all that stuff.”

If you haven’t seen your organizational documents for a while, find them! Then browse through them to see if they need to be updated. If you need any assistance, our dedicated legal missionaries will be more than happy to help.

It is certainly the case that what the Internal Revenue Service considers incomeis often different from what ordinary people consider income. The situation of a discounted sale is an excellent example.

A well-established church in Northern Virginia had accrued a number of houses during its long and storied history. In addition to its facilities at the main church campus, the church owned several houses in neighborhoods 

around town.

The church wanted to be a blessing to its pastor, so they explored the idea of selling the pastor one of the church-owned houses. Because of booming real estate prices in Northern Virginia, a house that the church purchased for about $200,000 was currently valued at about $650,000. The church floated the idea of selling this house to their pastor for the price they paid.

To be clear, the church has every right to sell this house to their pastor, and he has every right to buy it. But because the sale would be $450,000 below fair market value, the church would have to include $450,000 on the pastor’s W-2 Form for the year, and he would be responsible to pay taxes on that money as though it were income. Keep in mind that the church did not give the pastor a check for $450,000, but the IRS certainly counts the discounted price as part of the pastor’s annual income.

In many cases, sales like these would create such a heavy tax burden for the pastor that the discounted rate would bankrupt him. Unless the church also had the ability to greatly increase his annual salary to cover these taxes, their generous gesture would actually turn out to be harmful.

If you have questions about how taxes work when church property is bought and sold, please contact the legal team at the Christian Law Association.

As Christians, we are called upon to be faithful stewards. In churches, we should certainly use the talents of our staff members prayerfully, take care of the physical church plant, and faithfully preach the Word. But we must be careful not to overlook solid financial stewardship. In most churches, receiving the offering is the starting point of the church’s finances, and proper procedures should be in place from the very beginning.

The handling of offerings may be likened to links in a chain. Each link is important to the trustworthiness of the chain. The basic “links” of the offering chain are the contributors, the collectors, the counters, the recorder, the depositors, and the recordkeeper. This “chain of custody” of money given to God as an act of worship must be regained in churches. Increasingly, churches are being held to the same standards of financial accountability as businesses. The pastor should not handle the finances of the church personally (1 Corinthians 16:3). Instead, the pastor should ensure that procedures for handling the church finances are adopted and followed.

1. Those involved in handling the church finances should be approved as persons of integrity by the church body and then by the leaders.

2. The handling of the church finances should never be left to one person. Always have two or more involved in the “chain of custody.” This provides a twofold protection: shared strength against the temptation to dishonesty, and a witness in case of unfounded accusation.

3. The pastor should not treat the communication of the financial activities and status of the church as unimportant.

4. He should communicate with the people on the matter of church finances.

5. He should use both verbal and written means to keep the congregation informed.

If you ever face legal action related to your church’s finances, it will be very helpful to have a list of the people who collected the offering each Sunday, as well as a list of the people who counted the offering each Sunday. Keep in mind that you cannot verify who actually did the work by looking at something like the schedule for ushers because the day-to-day reality of church work often involves people swapping dates, not showing up at the last minute, etc. It is also important to bear in mind that the people who collect the offering should not be the same as the people who count it.

The people who count the offering should be carefully screened. The strongest links in the offering chain must be the counters. CLA strongly recommends that the following policies be adopted:

1. Always have at least two people involved in the counting of the offering. 

2. Basic written counting guidelines should be made known by the pastor or the deacon board.

3. The counting room should be secured from the inside during the count. 

4. There should not be any traffic in or out of the room during the count. 

5. For security reasons and for best practices, have all the materials needed (such as bank bags and adding machines) for accurate counts.

Following procedures like these offers many benefits to you ministry. First, when these procedures are followed, the church is less likely to have some of its funds surreptitiously stolen. Second, and perhaps more importantly, if these procedures are not followed, it makes it easier for people to sue the church and perhaps impeach the character of church leadership, even if they have been completely honest and upright.

At the Christian Law Association, we have dealt with the issues that arise from financial situations for decades. We have several other steps and procedural recommendations in our resource, From Offering Plate to Disbursement. Please contact us today to get your copy so that you can be certain your ministry is taking the proper precautions with the finances. If you need any assistance, our dedicated legal missionaries will be more than happy to help you.

A small Christian school educates students in Western Kentucky. In order to make the school work, several of the mothers volunteer at the school, generously offering their services for free. The principal of the school, being grateful for their work and knowing the school could not operate without these volunteers, thought it would be appropriate to pay them a token sum of money each month and to reduce their children’s tuition by 50%. His primary goal was not to compensate the volunteers, but to do something that would express his gratitude for their work.

Unfortunately, when volunteers are paid—even if the pay is only free or reduced tuition—their classification changes. Instead of being volunteers, they must be reclassified as paid staff.

Suppose Sally volunteered at the Christian school 20 hours per week, and the principal gave her a token payment of $100 per month. 

In the eyes of the law, she was working 80 hours per month and being paid at the rate of $1.25 per hour. This fact would mean that the school is now in violation of the minimum wage law.

In addition, the “volunteer” who was receiving $100 per month would need to be signed up as a regular employee, and withholding tax would need to be deducted from the “salary.”

Complex legal issues arise when paying staff and providing expressions of gratitude to volunteers. Understanding this information is extremely important for the legal protection of your ministry.

In the many decades that have passed since the founding of the Christian Law Association, we have been singularly blessed by the Lord. Some would say that we have an astonishing record as we have labored to defend religious liberty in the United States.

Though we have been blessed with talented attorneys and a strong leadership team, we know that every legal success is a gift from God. “Every good gift and every perfect gift is from above, and cometh down from the Father of lights, with whom is no variableness, neither shadow of turning” (James 1:17).

When we have won legal battles, we know it is by the grace of God. We know it is because of the faithful prayers of people who carry our ministry and our cases in their heart. As an attorney in the nineteenth-century said, “Little prayer, little power; much prayer, much power.”

While we encourage Christian people to fulfill their civic duty, we understand that government is not the guarantor of our religious liberty. If you think that Washington, D. C. is the answer, you should know that they don’t even know the questions! It is God, and only God, who enables us to win legal victories.

The Psalmist was wise to write, “O thou that hearest prayer, unto thee shall all flesh come” (Psalm 65:2). As we make our way through the new cases of this calendar year and as we continue working to finish legal cases from the past, we humbly ask you to keep us in your prayers. We can see firsthand how God steps in to help His children in ways that we could never have imagined, and we need His help, strength, and guidance.

We thank the Lord and honor Him for His undeserved blessings. We ask you to keep praying for God’s will to be done as we continue battling for the religious rights of God’s people here in these United States.

The Internal Revenue Service is making it a little easier for people who have been affected by Hurricane Helene.

•      Taxes due in March or April of 2025 are now due on May 1, 2025 for the entire states of Alabama, Georgia, North Carolina, and South Carolina.

•      Taxes due in March or April of 2025 are now due on May 1, 2025 for 41 counties in Florida, 8 counties in Tennessee, and 6 counties and 1 city in Virginia.

•      These extended deadlines apply to both individuals and to businesses.

•      These extended deadlines apply to quarterly payroll and excise taxes.

•      Individuals and businesses who were not covered by insurance or who did not get reimbursed for disaster-related losses, can claim these on their taxes during the year the loss occurred or on the previous year’s taxes.

•      Additional information is available on the IRS website.

https://www.irs.gov/newsroom/irs-provides-relief-for-helene-various-deadlines-postponed-to-may-1-2025-part-or-all-of-7-states-qualify

If you have questions about this or need any assistance, please contact our offices.

Though some people don’t think much about it, hiring and firing employees is one of the most legally dangerous tasks in which a church routinely engages. CLA has seen more lawsuits filed against churches over employment law than almost any other legal area, and it can sometimes seem that churches are between a rock and a hard place. They can be sued for not asking enough questions, and they can be sued for asking the wrong questions during an employee interview. Since our nation is built on federalism, the laws regarding the hiring process vary widely from state to state. Because of these state-to-state differences, CLA cannot offer a comprehensive written guide that applies nationwide and also covers every foreseeable issue that a church ministry might face.

To point you in the right direction, we have included below a very brief “Dos and Don’ts” list for interviewing potential employees and bringing on volunteers. This checklist should by no means be considered everything you must know before interviewing potential employees. You must be aware of the employment laws in your particular state. CLA is happy to help you navigate this complex legal field.

When you start the interview process, keep these important cautions in mind.

DO be up front about your faith. It’s obviously important to know if the person is qualified for their job—and at a ministry, faith is a key part of the job. Religious non-profit organizations have a specific exemption from discrimination in employment claims made on the basis of religion. This means you are allowed to base relevant hiring decisions on religious preference without violating the law.

DON’T forget to check references. This is a big one. We have actually seen a church lose a lawsuit over failing to check prior job references for a pastoral candidate. Ask for references, and actually follow-up with substantive questions for the people listed on those references. Obtaining personal references is not enough; you also need to request corporate references.

DO check your state laws regarding background checks. Background checks are vital for any employee or volunteer who will work with children in any capacity, and we recommend them even for volunteers that don’t work with children. That said, when it comes to employees, some states have strict “Ban the Box” laws that prohibit asking about irrelevant criminal convictions in most job interviews. Call our office before you interview a potential employee to be sure you know your state’s stance on this critical issue.

DON’T ask unnecessary personal questions. Remember, there are different laws in different states, but when you begin the interview process, you should know that certain topics are considered illegal to discuss. A good rule of thumb is to avoid asking any sort of non-job-related questions about a potential employee.

DO call the Christian Law Association first each time you are preparing to interview candidates. Laws change all the time, and we are here to help you be as prepared as possible. Call our attorneys to find out what you should ask for the particular role you are trying to fill, what you shouldn’t ask in your state, and how to make sure you are in compliance with all new employee laws if the interview goes well.

One potentially great tool for ministry employers to offer is a Flexible Spending Account (FSA). For these accounts, your employees choose to voluntarily withhold a portion of their salary and place it into an FSA. If you are careful to follow the rules of the IRS, the money placed in an FSA is not subject to income or employment taxes.

The money in the FSA can then be used to reimburse the employee for qualified medical expenses. What constitutes a qualified expense is specifically detailed by the IRS, but common expenses include co-payments, deductibles, prescription medications, dental care, vision care, and medical devices.

FSAs can be wonderful tools. But, as most things are with the IRS, the rules surrounding them can also be complex, and the plans must be administered. If you want to understand FSAs better, speak with your ministry’s health plan provider, or talk with your banker for more information that is specific to your situation. If you need additional information, contact our offices so our experienced legal team can assist you.

We live in a country that has been blessed beyond measure.  As we enter 2025, our recommendation is that your ministry prioritize the recording of accurate board meeting minutes. If it’s not something you’re already certain is happening, it’s important to do not only because such records are helpful, but also because they are legally necessary for several reasons: 

• It is immensely helpful to have accurate details regarding specific events and votes, particularly if there is ever a disagreement or conflict.

• Such records are generally court-admissible to support what actually happened at the meeting.

• Minutes assist in providing a record that the board is meeting their duties of care. 

• Meeting minutes are often required by state law. 

All of that said, it’s also important to know how to take proper minutes. Too much information can be just as bad as no information. The best minutes provide a broad but clear summary of meeting points and issues without delving into exact quotes. The minutes of every meeting should contain the following:

1. Date and time of meeting

2. Place of meeting

3. Statement that the meeting was duly called:

a. State who called the meeting.

b. State what notice of the meeting was given.

c. Attach a copy of the notice or attach a duly signed waiver of notice.

4. Name of the presiding officer of the meeting

5. Name of the meeting secretary

6. Names of those present

7. Number of people present in person and number present by proxy (if applicable)

8. Reading, correction, and adoption of minutes of the previous meeting

9. Record of what occurred at the meeting:

a. Resolutions proposed

b. Resolutions adopted (The names of proposers and seconders need not be stated, unless they request it.)

c. Record of those who voted for or against a proposal (if they wish to have this recorded)

d. Reports of officers and committees

10. Time of adjournment 

11. Signature of the secretary

12. Counter-signature of the presiding officer, which will be obtained at the next meeting when the minutes are adopted

Lastly, choose carefully the person who will record your minutes. The job is important, and the person doing it needs to understand the ministry well enough to hone in on important issues that need to be noted while understanding which conversations or exchanges are irrelevant. Having accurate board meeting minutes will go a long way toward protecting your ministry in the event that they are needed.

We live in a country that has been blessed beyond measure. As we say the Pledge of Allegiance, the fact that we can look back through American history and say that we are “one nation under God” is a miraculous feat. We can only see how God’s hand has crafted this amazing country and kept her safe through the years.

As we view this through a new lens, we can see the blessings all around us. We are fighting for religious liberty every day, and, while our battle continues, God has spared us from the immediate threat of an even stronger culture barrage. We need your prayers and support to fund this ongoing skirmish! As we consider God’s blessing on America, the following are a few items for us to consider as we journey through this next year:

1. Spend time growing closer to God every day. 

If you want God to bless our country, do what God has called you to do. “If ye love me, keep my commandments.” (John 14:15)

2. Be God’s ambassador where you are. 

Many describe this as “blooming where you are planted.” If you follow after God in your city, others will hear the Gospel. Legally, we are fighting for you to have these rights for yourself as well as for generations to follow. These rights are only one generation away from being lost. We must use these rights while we have opportunities, because America and the rest of the world need to see sincere, God-fearing men and women who take God’s command to win souls seriously. 

3. Support the mission of CLA by praying and giving. 

We are inundated with legal questions and situations each day from believers across America who simply want to follow God’s call on their lives. If these Christians are legally stopped from accomplishing God’s will, how can they witness effectively, train children in a safe and informative environment, or be the lighthouse in their workplaces and communities that they ought to be? We need Christians to be effective in their local communities to follow God’s plan for their lives, and we are here to assist them when the culture and society tries to exclude them. God desires to use us to accomplish His will on the earth. 

As you think of how God can bless America, think first how God wants to use you. If we join together to follow after God, we can do great things for God in unity. Don’t be distracted. As others tried to resist his efforts to rebuild Jerusalem’s wall, Nehemiah said, “I am doing a great work.” Things done for God will be remembered for all eternity. Do something eternal for God today, and in doing so, know that you are doing your part for God to bless America.