COUNCIL ON CHURCH FINANCIAL INTEGRITY
Biden Beefs Up the IRS
In a newly announced administration government spending plan, the IRS will get an extra $80 Billion because Biden has vowed to target new enforcement tactics against wealthy people, including Pastors of large churches and ministries. The IRS enforcement staff would grow by 15 percent each year over a decade.
BREAKING IRS NEWS ALERT -
AFTER 11 YEARS OF NO CHURCH AUDITS, BIDEN IRS ANNOUNCES THAT CHURCH AUDITS WILL RE-START
Here are excerpts from the remarks of IRS Director of Exempt Organizations Rulings and Agreements Steve Martin, making comments on IRS plans for church audits restarting:
“Our compliance efforts extend to all exempt organizations, including churches. Where we undertake compliance activity with respect to a church, we have procedures in place.”
“Delegation Order 7-3, Church Tax Inquiries and Examinations, confirms that the authority to begin a church tax inquiry and a church tax examination… begins when the IRS Commissioner of TEGE signs notices of a church tax inquiry and notices of church tax examination.”
A “church tax inquiry” means your church gets a letter from the IRS that they are concerned about something, but you still have a chance to avoid a full scale audit.
A “church tax examination” means your church gets a letter from the IRS that they are going to audit your church.
The IRS Director also announced that the IRS expects to make another update about Church Tax Inquiries and Examinations this year. He further revealed that so far in 2021, the IRS has started 579 501(c)(3) (exempt organization) audits, 60% of which were based on referrals. Referrals are where someone on staff at your church blows the whistle and calls the IRS. Even if the church employee, or former church employee, is lying, it can still start an audit.
So make sure your church doesn’t have any unknown errors in how your operate your finances, because the IRS finds problems in about 79% of cases. The most common issues where churches end up owing money relate to some aspect of filing payroll taxes and paying salaries to Pastors and other church staff.
Even though the Treasury Department oversees the IRS and usually makes these kinds of decisions, this time the IRS went ahead on its own and made the decision to start auditing churches again, after there being no church audits in the United State for for over 11 years. For the IRS to make this decision on its own without the Treasury Department’s Office of Chief Counsel’s approval, is unprecedented, as well as being very unusual.
We hope this “straw in the wind” is not a signal of things to come. Please help CCFI so we can keep on top of what’s happening and protect your church. In the weeks and months ahead, we’ll report more on how you can protect your church against an audit by the Biden IRS.
Update on New Biden IRS Audits
The Biden plan calls for increased audits to collect another $700 billion in tax revenue, by giving more money to the IRS for enforcement activities.
Biden is also proposing to require banks to report information on money going into and coming out of your bank account. That would make small business profits reported to the IRS just like wages are.
Under Biden’s plan, the new federal tax rate could be up to 43.4%. Add State taxes, and that could put your combined tax bill north of 50%.
Biden Proposes $80 Billion to Beef Up the IRS
Biden wants to raise the top income tax rate for Americans to nearly 40%.
IRS audits of rich taxpayers declined under Trump. Biden wants to change that. Some research suggests that the United States could raise as much as $1.1 trillion over a decade using tougher IRS enforcement. Our question is, since the U.S. National Debt is now more than $28 Trillion already, the new IRS plan would take approximately 250 years to pay down all that debt - why not just find ways for the government to boost our key businesses like the Chinese do, and create more wealth for everybody?
The proposal also includes new disclosure and reporting requirements for business owners using so-called pass-through Sub S corporations.
Biden’s $80 billion plan would allow the IRS to "steadily ramp up their enforcement practices".
Gallup began asking questions about church membership in 1937.
Now for the first time in history, Gallup has found that the number of Americans who attend a church, synagogue, or mosque has plunged below 50%.
Back in 1937, a whopping 73% of Americans went to church, synagogue, or mosque.
That number was still 70% in 1999. Today it has rocketed downwards to only 47%.
So is America losing its religion?
During the 20th century Americans enjoyed great wealth and world power. Many believe those blessings depended on worship. That seems to be changing rapidly in the 21st century.
The sudden loss of U.S. religion may result in this country becoming a secular state, increasingly godless, and more and more hostile to the things of God.
Churches need to wake up. Without healings, miracles, and works of power every Sunday morning, the unthinkable future of America could be the United States of Babylon.
The Supreme Court tells CA Governor Gavin Newsom that his office is not higher than Jesus.
California Governor Gavin Newsom was forced to bend his knee to the First Amendment right to the free exercise of religion.
The U.S. Supreme Court has ruled 5-4, in a decision released shortly before midnight, that churches will be allowed to meet during the pandemic, period, amen.
It literally took a year and millions of dollars in legal expenses, to fight the state of California for the right to pray to their God at church gatherings.
On Monday, Gov. Newsom was forced to stop requiring location and capacity limitations on California churches, including house churches.
During this past year of turmoil, megachurches have been shuttered throughout California state because of Newsom’s dictates. Some churches have gone to court and won. Others just met anyway.
The high court reminded California that it cannot treat churches and religious gatherings differently than businesses like Costco or Walmart.
Supreme Court Chief Justice John Roberts voted against churches.
Grace Community Church in Los Angeles fought during for their fight to defend their right to gather for indoor worship services.
The church’s leadership resumed services last July and defied state and local health mandates. The L.A. Superior Court then issued an injunction last September ordering the church to cease holding indoor services. The court ordered that church goers wear masks and socially distance even during outdoor services.
The church issued a statement: “People in the church are free to wear masks if they choose. But people who disagree are likewise free to worship, sing, pray, and proclaim God’s Word without a face covering — even if that goes against the arbitrary, dictates of government officials. It is not the church’s duty to enforce executive orders based on a politician’s whim — particularly when those edicts impinge on our freedom of worship in our church.”
As U.S. Supreme Court Justice Neil Gorsuch said in another case, “Even if the Constitution has taken a holiday during this pandemic, it cannot become a sabbatical.”
Beginning April 15, California is set to loosen restrictions on large indoor sports, theater, and concert gatherings as coronavirus cases plunge in the state.
A study released on March 17, 2021 called for a more universal charitable tax deduction that would give a much larger share of the population a reason to give money to churches.
A universal charitable deduction that allows people who aren't rich to get credit on their tax return, could boost giving to churches.
Never Forget How They Treated Christians During the Pandemic
During the pandemic, a young Catholic mother was recently arrested in Holy Trinity Church in Dallas, Texas. She is pregnant, and already has a one-year-old. During Holy Mass, three police officers were waiting for her after she went to Holy Communion at Holy Trinity Church. She was kneeling down and holding her baby when the police officers asked her for ID and told her she was going to be arrested. She was told she needed to leave the mass and not to come back to this Catholic Church again.
It is way past time for our government officials to take a clear stand that Freedom of the Exercise of Religion is non-negotiable in the USA.
There are lines that must never be crossed.
This is one of those dangerous lines in the sand we must defend at all costs.
This spirit of anti-religion must be cast down in the Spirit, and in the government.
This country was founded on the rock of Freedom of Religion for all.
Students at federally-funded Christian colleges and universities launched a defense of religious freedom by filing a federal lawsuit in Oregon against the Department of Education (DoE). The lawsuit claims the government violated the First, Fifth, and Fourteenth Amendments to the Constitution when it granted religious exemptions to Christian schools which are allowed to decide who they hire, and who they admit as students. “The law does not recognize ‘love the sinner, hate the sin’ policies," the lawsuit claims.
The lawsuit also claims that religious exemptions in general violate the Establishment Clause.
The lawsuit seeks to cut off the estimated federal $4.2 billion funding to Christian universities.
Southern Baptist Theological Seminary President Al Mohler stated that the lawsuit targets “not just Christian institutions, organizations, and ministries, but the churches and denominations behind them.”
Congress has passed $Billions more in grant money, some of which churches may qualify for.
More details here:
Never Forget How They Treated Our Churches During the Pandemic
Maine’s Governor ‘Expands’ Limits on Church Gatherings—to 50 Attendees
The Governor’s new rule:
a. From March 26, 2021 through May 23, 2021: 50% of permitted occupancy, 5 persons per 1,000 sq. ft., or 50 persons, whichever is greatest;
b. May 24, 2021 and thereafter: 75% of permitted occupancy, 5 persons per 1,000 sq. ft., or 50 persons, whichever is greatest.
“And for us at home — fathers, mothers, children, wives, sisters, and brothers of brave men overseas, whose thoughts and prayers are ever with them — help us, Almighty God, to rededicate ourselves in renewed faith in Thee in this hour of great sacrifice.”
No, that quote wasn’t from the Governor of Maine - the quote was from President Franklin D. Roosevelt’s national prayer radio address. How times have changed.
"In other words, no more than 50 people in Maine can gather together to worship the God to whom FDR encouraged the entire nation to pray. There may be 1,000 or 2,000 congregants in a church, but no more than 50 of them can gather together for worship. Religious worship is clearly not considered even remotely essential.
Besides the regular congregants of Calvary Chapel, the victims of the Governor’s one-size-fits-all bureaucratic decree are participants in the church’s highly successful Calvary Residential Discipleship (CRD) program for those struggling with addictions.
The CRD program is limited to 48 participants, who are required to attend weekly church services. That means under Mills’ order, the rest of the congregation and all but two of the seven staff members are barred from attendance."
- From PJ Media
The IRS believes that America’s wealthiest 1%, which includes many prosperous Pastors, may not be paying taxes on all of their income, according to a new study conducted by two IRS researchers along with professors from Carnegie Mellon University, the University of California at Berkeley, and the London School of Economics. At the very least, the fact that IRS officials are working with university professors to study how to audit rich people better ought to alarm privacy advocates. Is internal IRS information being shared with these universities?
The study concluded that tax evasion by rich people is much more widespread than the IRS previously thought. The authors of the study say they found that although the IRS finds some tax evasion, the IRS misses many complex situations that avoid reporting income.
Ministers qualify for housing allowance which is not reported on the minister’s tax return in some cases, and is not required to be reported on Form W-2 in all cases. Minister’s retirement plans can pay over $100,000 a year tax free under some setups. Both housing and retirement plans for ministers are perfectly legal - but many IRS agents are unfamiliar with the complicated and little known tax rules that apply to ministers and churches.
IRS Commissioner Chuck Rettig told a House panel last week that audit rates for high-income taxpayers have fallen off dramatically over the past decade due to budget cuts and staff shortages among the IRS working groups which audit rich people.
According to the report, the Treasury could collect over $175 billion per year of extra income tax from the richest top 1%.
To make this happen the researchers are suggesting for the IRS to deploy “additional tools” such as more specialized audits and whistleblowers getting bonuses for turning in rich people to the IRS.
The IRS already has a little known guide for IRS agents on how to audit ministers. The study seems to suggest that this guide be used more, and that maybe church employees should get a reward check from the IRS for turning in ministers.
This could be a dangerous overreach of government power in the case of ministers, most of whom pay all the taxes they owe. If an innocent minister is turned in by a church employee, who will reimburse the minister once the IRS finds out they didn’t owe any money after all. The minister still has the hassle and inconvenience, plus paying accounting and legal fees to represent the minister before the IRS.
The icing on the cake? Congress is discussing right now the idea of giving more funding to the IRS after years of budget cuts, so the IRS can hire specialized auditors and improve IRS technology. Congress is also considering allowing the IRS to get more financial information from banks and financial institutions.
CCFI News has seen analyst reports that Congress excluded the Hyde Amendment from a recent COVID-19 “relief” bill.
The Hyde Amendment protects the consciences of pro-life taxpayers from funding abortion, because the Hyde Amendment prevents the government from spending tax dollars on abortion.
Members of both parties planned to introduce Congressional legislation to help smaller news organizations negotiate for better deals with big social media platforms which use news to attract customers.
The planned bill would allow indie news groups to negotiate collectively, to increase their chances of getting better revenue-sharing deals from the likes of Google and others.
The Pew Research Center has noted that the news industry as a whole has been hit hard by pandemic related problems which have led to changing media habits.
Rather than indie news outlets going to social platforms on their own, the proposed legislation if enacted will help give indies - including religious press organizations - a way to act together and exert more influence with social media giants.
Our sources on Capitol Hill say that there is a bipartisan appetite right now for this legislation, which could help many of the churches and other evangelical groups which source and distribute news.
We will report details of the legislation after the language of the bill is released.
Chad Schavey who heads up the church accounting firm ChurchShield, has informed CCFI News that the federal income tax filing rules for Ministers for the 2022 tax year have a few new wrinkles they need to know about.
These changes apply to individual Ministers, including Ministers who pay self-employment tax.
Ministers may need to file certain forms to qualify under these new rules.
Hat Tip to:
In the previously breaking news item below, IRS managers and examiners who were interviewed anonymously stated that they believe churches’ exemptions from filing annual information returns hinders detection of potential noncompliance.
In other words, people inside the IRS, whose names and positions we do not know, have stated for the public record that their personal opinion is if churches would be made to send their financial information to the IRS each year, the IRS would find things that the churches did wrong.
They also stated that the IRS relies on the payroll returns that churches file, such as quarterly Form 941 employment tax returns, and year end W-2s, to look for churches that can be penalized for noncompliance with IRS rules.
This means that churches need to make very sure that all salary reporting for Pastors and other church staff, is completely accurate, and that compensation paid is reasonable according to IRS rules.
The officials also said the IRS finds out about church wrongdoing when current or former church staff "turn the church in to the IRS".
Does your church have regular checks by outside accountants and other experts to make sure your church is doing everything right by the book?
CCFI believes that the IRS needs to be more transparent about which IRS officials have these opinions.
What information, facts, or experience are these opinions based on?
Then we need to have a forum open to the public to discuss these issues.
It is not good for anonymous IRS officials to make statements that reflect badly on churches without some backup information.
On the other hand, if these officials' opinions are in fact correct, then churches need information on how to correct problems known to the IRS but which are not now known to the churches.
The text below is from a speech Biden made back on Monday afternoon March 15, 2021 this excerpt from Whitehouse.gov:
THE PRESIDENT: I discussed it with my team, and they say the thing that has more impact than anything... is... what the local preachers... say.
So I urge... all... local ministers and priests to talk about why [my policy is] important...
On its face, this statement urges preachers to become salespeople for government agencies and policies.
The question is, if preachers are legally allowed to promote government policies, are preachers also allowed to oppose government policies they believe run counter to the teachings of Scripture?
Hat Tip to one of our CCFI Sr. Pastors who flagged this item.
In the News Item below, who was the Member of the House Ways and Means Committee who started the Biden IRS audit report about churches?
Why was this information kept secret until now?
What is the purpose of releasing this information now?
Does the IRS have concerns about churches and is this report being released to somehow set the stage to start auditing churches again?
The February 17, 2021 report does list several concerns that the IRS has about church compliance.
Should there be informative discussions between church leaders and the government about these concerns, including concerns about having government entanglement in church matters?
CCFI News will update this story as we get more information to report.
*** Breaking ***
The Biden IRS Issues Report on Church Audits
A February 17, 2021 report was issued by the Biden Inspector General for Tax Administration.
This audit was initiated at the request of an anonymous member of the House Committee on Ways and Means. The objective was to review the IRS’s policies and audit procedures to identify improper conduct by tax-exempt organizations including churches.
Previously unknown information about church audits by the IRS was released for the first time.
From the audit report:
We identified a population of more than 263,000 churches and other religious organizations that IRS systems showed were not required to file tax-exempt annual information returns with the IRS. Of those, 39 (0.01 percent) organizations had 52 returns examined during FY 2019, which is about a one in 5,000 chance of examination.
The EO managers and examiners we interviewed stated that they believe churches’ exemptions from filing annual information returns hinders detection of potential noncompliance.
The IRS instead relies on other types of returns that churches and religious organizations must file, such as employment tax returns, to identify church noncompliance.
The IRS may also identify church noncompliance through referrals.
“Referrals” means that a disgruntled current or former church employee has turned in the church to the IRS.
This week we will discuss more about what this audit report means for your church.
Congressman Greg Steube (R-Fla.) made a speech in the House of Representatives day quoting the Bible.
Rep. Jerry Nadler (D-N.Y.) responded to the Bible this way, "What any religious tradition describes as God’s will is no concern of this Congress.”
Congressman Steube responded by noting that the House of Representatives itself has “In God We Trust” behind the Speaker’s rostrum, which shows that Judeo-Christian beliefs do indeed belong in Congress.
The Coalition for Jewish Values (CJV), a coalition of more than 1,500 traditional Orthodox Jewish rabbis, condemned Nadler’s comment.
“Mr. Nadler has forgotten the Constitution,” CJV President Rabbi Pesach Lerner said in a statement. “The Founding Fathers required Congress to avoid infringing upon the free exercise of religion, meaning it must be sensitive to what every religious tradition describes as G-d’s will. It is especially true that Congress must remain cognizant of the set of foundational moral principles – including valuing peace, human life, and individual liberty and responsibility – that America calls Judeo-Christian ethics.”
CJV joined many other organizations in opposing the Equality Act, warning that the legislation would eviscerate religious freedom and condemning the bill as “a disgraceful attack upon Jewish Biblical beliefs.”
Lily Batchelder has been nominated to be Treasury Assistant Secretary for Tax Policy. This position is one of the top three tax positions in the federal government, just below the IRS Commissioner and the IRS Chief Counsel. She has very limited tax experience in the nonprofit area. She was educated at Ivy League universities, and was in the Obama White House.
Will she be interested in guarding the rights of churches?
Let's hope so.
Texas Takes Masks Off Churches
On March 2, 2021, Governor Greg Abbott issued Executive Order GA-34 to provide that, in all counties not in an area with high hospitalizations:
there are no COVID-19-related operating limits for any business or other establishment; and
individuals are strongly encouraged to wear face coverings over the nose and mouth wherever it is not feasible to maintain six feet of social distancing from another person not in the same household, but no person may be required by any jurisdiction to wear or to mandate the wearing of a face covering.
So churches in Texas now can worship at full capacity, without masks, as the US Constitution has guaranteed for over 200 years.
We have reports that Florida and Mississippi have taken the same steps. Unfortunately, some counties and cities are still attempting to impose their own "local rules" on churches.
CCFI News has been informed that House Speaker Pelosi will not allow anyone, including constituents, inside the US Capitol to visit their representative.
CCFI News is trying to confirm if this unconstitutional policy applies to the Press, which would violate the public's right to be informed.
On this subject, Colorado Representative Lauren Boebert commented to Newsmax TV: "I have constituents that can’t even come to my office that they pay for and visit me and petition their government…"
Rep. Boebert says there is no appointment system at present. "Only staff. Only members" may visit the Capitol.
CCFI is reaching out to our sources on Capitol Hill and will update our Members.
The heads of over 130 nonprofit organizations have signed a letter to the US Congress demanding the defeat of pending legislation that would violate the Constitutional rights of all nonprofits - including Churches.
More specifically, H.R. 1 and S. 1 include numerous, sweeping provisions that would violate the First Amendment rights of all Americans by:
• Subjecting citizens who contribute to nonprofit organizations including churches to harassment and intimidation by making their personal information available in a searchable government database. This mandate focuses public attention on the individuals and donors who support causes instead of on the messages communicated by those organizations, exacerbating the politics of division and personal destruction and further coarsening political discourse. This would have a considerable chilling effect on civic engagement and free speech.
• Policing speech by Americans about legislative issues by expanding the definition of “electioneering communications” – historically limited to large-scale TV and radio campaigns targeted to the electorate in a campaign for office – to include online advertising that bears no relation to an election. This will subject far more issue ads to burdensome disclaimer requirements, which will coerce groups into truncating their message and make some advertising, especially online, practically impossible.
• Indiscriminately regulating groups that incidentally or occasionally advocate on federal judicial nominations and require those groups to broadly expose their donors, even if those citizens had nothing to do with the groups’ speech about judicial nominees.
• Forcing groups to publicly identify their supporters on the face of the ads themselves. Faced with the prospect of being inaccurately associated with what the law would consider (unjustifiably, in many or most instances) “campaign” ads in FEC reports and disclaimers, many donors will choose not to give to nonprofit groups.
• Increasing regulation of the online speech of American citizens while purporting (and failing) to address the threat of Russian propaganda.
• Expanding the universe of regulated online political speech by Americans beyond paid advertising to include communications on groups’ or individuals’ own websites and email messages.
• Deterring American citizens from serving their country through political appointments by forcing them to disclose their donations to causes they have supported in the past.
Our elections will not be more honest, more informed, or more secure from foreign interference if we sacrifice the privacy of American citizens. But our democracy will be weakened if voices are eliminated from public debate through intimidation and overregulation.
As a Member of Congress, you have taken an oath to support and defend the Constitution of the United States. H.R. 1 and S. 1 propose multiple violations of our First Amendment rights. On behalf of the millions of American citizens our organizations represent, we strongly urge you to oppose H.R. 1 and S. 1.
WASHINGTON, D.C.— Friends of CCFI House Republican Whip Steve Scalise (R-La.), Congressman Jody Hice (R-Ga.), and Republican Conference Vice Chairman Mike Johnson (R-La.) announced the reintroduction of the Free Speech Fairness Act, legislation designed to repeal the Johnson Amendment's censorship of 501(c)(3) employees, including religious leaders, and restore their First Amendment rights.
“For more than 60 years, the IRS’s discriminatory ‘Johnson Amendment’ has unjustly prohibited religious leaders and other employees of 501(c)(3) organizations from fully exercising their rights to speak freely,” said Whip Scalise. “To address this discriminatory abuse of the U.S. Tax Code, I have joined my colleagues, Congressmen Jody Hice and Mike Johnson in reintroducing the Free Speech Fairness Act. Our bill aims to repeal the Johnson Amendment to ensure that religious and nonprofit leaders will no longer face IRS bullying and threats just for exercising their right to free speech under the First Amendment. Freedom of speech is what makes America the freest nation in the world. No one should be restricted from speaking freely about the issues that affect each and every American family simply because of the job they hold or the religious views they share. We need to repeal the Johnson Amendment so people of faith can freely express their views without fear of retribution or intimidation by the IRS or any other Washington bureaucrat.”
“The First Amendment guarantees every American the right to free speech and free practice of religion. It is the very bedrock of our republic; the federal government has no authority to infringe upon those rights simply because one has entered a house of worship,” said Congressman Hice. “For decades, however, an unconstitutional provision in the U.S. Tax Code called the Johnson Amendment has silenced religious leaders from speaking openly from the pulpit. As a pastor before coming to Washington, I was personally harassed by the IRS. My church’s tax-exempt status was threatened because I dared to preach openly on political issues important to my congregation. Our Founding Fathers left us unalienable rights to be enjoyed – and defended. I’m proud to again join my colleagues in introducing the Free Speech Fairness Act to repeal the Johnson Amendment and fully restore Americans’ constitutional rights to express their beliefs.”
“The First Amendment does not end when a pastor stands behind a pulpit," said Vice Chairman Johnson. "I’m proud to offer the Free Speech Fairness Act with my good friends Whip Scalise and Rep. Hice to protect the rights of clergy, churches, and other non-profits from the threat of losing tax- exempt status as they live out their most basic American rights. I hope our Democrat colleagues will join our effort to pass this legislation and defend the freedom of speech in every venue.”
The Treasury Dept some time ago issued a report that stated: During 2019, the IRS Exempt Organization Division audited approximately 2,000 returns out of 1.5 million returns filed.
Put another way, an exempt organization’s chance of being audited was one in a thousand. You have a better chance of being hit by a meteorite.
This means that the chance of a nonprofit being audited is much less than for businesses and individuals - five times less than the business audit rate, and three times less than the individual audit rate.
And for churches, the rate has been nearly 0 for over 10 years.
However, the Biden IRS has already made a change to the Internal Revenue Manual that could open a can of worms and allow church audits to start up again.
CCFI News will stay on top of this story and update you as we learn more.
WASHINGTON, DC — U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chair of the House Ways and Means Subcommittee on Oversight, has written the U.S. Treasury Inspector General for Tax Administration (TIGTA) demanding fresh answers on what the Internal Revenue Service (IRS) is doing to step up enforcement actions against tax-exempt organizations.