Discussion:Not For Profit - Church
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| 8 June 2007 | |
| Hi,
I am a credit analyst and in the myst of underwriting a loan to a Church, which is a not for profit organization. Do they file some type of tax return? There must be some type of form they present to the IRS each year, even though they do not owe taxes? Thanks in advance, Joe | |
| June 8, 2007 | |
| Nope. Churches are exempt from reporting. A large church might choose to have an audit, or follow ECFA standards, but smaller churches won't. And the financials can be pretty spotty, frankly. I'm deeply involved in the church world...and until they get to the size of having a couple staff members, usually accounting isn't much on the radar screen. Good luck. | |
| 8 June 2007 | |
| Churchs don't file tax returns. They may, however, require periodic financial reports to the board of directors.
The only tax returns required of the church w/b p/r taxes for employees. If there is unrelated business income, maybe, a 990T. | |
Bottom Line (talk|edits) said: | 9 June 2007 |
| Financial info also depends upon what denomination they are. Some denominations are closely watched by a governing board. They may have to submit financials to that board.
As a former credit analyst/loan review officer in the commercial banking industry, I feel I must give you an aside. Beware of loans to churches. If the preacher does something the congregation feels is wrong (could be anything from dancing to murder), all the tithes (ie income) go away! You're safer with a "name brand" denomination than an independent. Try to get some guarantors (who actually have some money). For PR reasons, it's virtually impossible to foreclose on a church. Besides that, what do you do with a single purpose building (worse than a bowling alley or a skating rink)? | |
