Church Tax Law & Compliance Guide

This manual is a working tool. Keep it on the treasurer’s desk, bring it to board meetings, and mark it up. Each chapter opens with a “Did You Know?” list of short facts that surprise many church leaders. The rest of the chapter explains the rules, gives checklists, and includes sample resolutions, policies, and worksheets you can adapt.
The chapters at a glance:
Chapter 1, General Administration, gives the traits of a strong financial administrator, a quarter-by-quarter close-out checklist, and a North Carolina and South Carolina state checklist.
Chapter 2, Legal Structure and Tax-Exempt Status, covers the EIN, incorporation, minutes, bylaws, tax-exempt status, the IRS marks of a church, and records retention.
Chapter 3, Clergy Compensation and Taxes, explains how each type of pay is taxed, the housing allowance, gifts to the pastor, and the resolutions every church needs.
Chapter 4, Financial Management and Internal Controls, covers offerings, contribution statements, check writing, petty cash, benevolence, the chart of accounts, bookkeeping, and financial statements.
Chapter 5, Payroll, walks through payroll for ministers and non-minister staff, with a full 2026 payroll example.
Chapter 6, IRS and State Forms Reference, is the heart of this edition. It profiles the federal forms a church may need, lists retired forms and what replaced them, and covers the main North Carolina and South Carolina forms.
Chapter 7, Insurance and Risk Management, covers coverage, the personnel manual, and a full risk management assessment.
The appendices give 2026 quick-reference figures, an annual compliance calendar, and a list of free resources.
Who this book is for. It is written mainly for churches: local congregations, conventions or associations of churches, and integrated auxiliaries of churches. Much of it also applies to faith-based nonprofits (religious 501(c)(3) organizations that are not churches, such as parachurch ministries, food pantries, and stand-alone Christian schools) and civic nonprofits (community-serving 501(c)(3) charities with no religious tie).