A Game Changer is about to be Released by the IRS
Churches and other non-profit organizations depend upon donations from members and generous citizens to further their tax-exempt purpose. For a Church it is the tithes and offerings that are received during their regularly scheduled worship services that pay the bills, including salaries, and provide necessary funds for outreach ministry.
What would happen if this stream of revenue would dry up for any reason? Regardless of some people’s super-spirituality, it takes money to operate a ministry. Utility companies do not care how spiritual a Church is. The only thing they are concerned with is, is the monthly bill paid on time each month.
IRS Release of Proposal
Fox News reported that the IRS was now proposing to require Social Security numbers for any donor that contributes to a non-profit if the donation is $250.00 or more during a calendar year. This is nothing new! It has been in the making for years. Chitwood and Chitwood began to warn clients and conference attendees 25 years earlier that this would be the case.
Please understand that the Internal Revenue Service does not make suggested proposals for information to be voluntary, unless they have another motive. That motive is that they are getting the backlash out of the way before it becomes mandatory. This has always been the Government’s Modus Operandi (M.O.).
Since they are suggesting that the information be voluntarily supplied by the Church or non-profit organization is a good indication that it will be mandatory very soon. This is why Chitwood and Chitwood has been sounding the alarm for years in our Church Management and Tax Seminars. The sooner we can prepare the Saints, the quicker Churches can have a plan in place so that there will be minimal decrease in the tithes and offerings on any given day of Worship.
Why the Request for Social Security Numbers?
If one should listen to the chatter from the IRS public relations staff, the IRS simply wants to streamline the process of tax returns so they may be more efficient. Since they now operate via Electronic Filing Requirements, the IRS wants John Q. Public to believe it will save the government money.
My question to everyone is, “When has the Government ever been concerned about saving money?”
One of the most common individual itemized return deductions is that of charitable contributions. To date this is the only remaining item for which there is no requirement to file an information report to the IRS. Mortgage interest payments are reported by lenders via Form 1098, while dividends and interest, miscellaneous income, and other payments are reported on one of the several 1099s. The IRS uses these forms to reconcile with the individual’s Social Security Account Number (SSAN/SSN). The Canadian system at which the IRS has been reviewing has confirmed that the registered system for Churches and non-profits has provided a very effective system for tax deduction integrity. However, it has also resulted in some hardships for Churches.
The reason I believe they are doing this is to develop another avenue to catch fraudulent returns that in turn would generate millions if not billions of dollars in penalties and interest for Government coffers.
If a Church reports to the IRS everyone who donated $250.00 or more in a given year, and did so via the donor’s Social Security number, once the donor filed his or her individual return, the IRS would have an immediate Check and Balance System to catch anyone misrepresenting his or her charitable giving. This in turn would generate immediate IRS audits of individual returns.
As of now, most of the IRS audits are random. This would drastically reduce random audits and aim the IRS resources at returns that are more likely to yield additional taxes, penalties, and interest.
We Are Fighting for You!
If Social Security numbers are required in order to receive a tax deduction for the donor, what will be in store for the average Church? How much will their weekly tithes and offerings drop? It did for Canadian Churches and will do so for those in the USA.
This is why Chitwood and Chitwood has been fighting this with every available resource at our disposal. Because of the multiplied thousands of churches we represent, we know the devastation it would rain upon our clients.
Our opposition to this has been ongoing for years – ever since we saw the handwriting on the wall 22 years earlier. However, if it becomes mandatory, those who are prepared ahead of time will suffer much less damage than those who have not.
This is why every Church in America should be contacting us now! Our wisdom saw this coming many years ahead of its release by the IRS. This same insight is what we have on all of the laws, codes, and sections that apply to Churches and non-profits. Don’t you think it is wisdom to have this knowledge working for you?
In Closing
There is not another Church and Clergy tax firm in America that knows what we know. Our knowledge of the IRS allows us to foresee IRS proposals, years in advance. It is only when people are blind-sided that they are defenseless.
Imagine the strategies that every Church could employ if they knew far enough in advance, the changes that were coming? We are years ahead in this knowledge and will prepare our clients long before things become law.
Chitwood and Chitwood is not a luxury for Churches and Ministers, we are a necessity! Our wisdom and knowledge will prepare you for any onslaught that comes from Government intrusion. Remember, “It is not what you know that will hurt you – it is what you don’t know!” This is why you need to contact us and make sure your Church books are in order. My father always said: “The Bible says build your house on a firm foundation – solid bookkeeping is the secular foundation for a House of Worship.”
Call us immediately at 800-344-0076 to learn how to become a Chitwood and Chitwood client, or to register for an upcoming Church Management Tax Conference near you.
For us, it is “A Ministry – Not A Job!”
