Interest earned on church bank account

[Black Bart]

Client asked me if it's taxable. I haven't done any church books, but I understand they're automatically tax-exempt as a non-profit organization. Still, it doesn't seem like it should be exempt because it's really got nothing to do with the church's actual operation.

Taxable? Non-taxable?

If it's not exempt, I guess they can give the bank Heaven's name, but what for an ID number?

P.S. In the real world here they just give the preacher's name and number to the bank and he/she pays taxes on the annual fifteen or twenty bucks interest, but I wondered what you're really supposed to do.

[travis bickle]

Well, to start with

Client asked me if it's taxable. I haven't done any church books, but I understand they're automatically tax-exempt as a non-profit organization. Still, it doesn't seem like it should be exempt because it's really got nothing to do with the church's actual operation.

Taxable? Non-taxable?

If it's not exempt, I guess they can give the bank Heaven's name, but what for an ID number?

P.S. In the real world here they just give the preacher's name and number to the bank and he/she pays taxes on the annual fifteen or twenty bucks interest, but I wondered what you're really supposed to do.

you might recommend to the preacher to get a copy of Publication 1828, because if they are doing the above incorrectly, "heaven" knows what else may be wrong.

They should have applied for an EIN so that they could have listed the Organization's Name and ID Number with the bank.

Do they fill out Form 990-T?

Tell the preacher, "It's time to get right with the Man!"

[Snaggletooth]

FEIN number

Banks insisting on FEIN numbers to report interest is an increasing problem for churches. Fortunately, for most churches there's not a lot of it, but banks are getting to the point where they have to have an FEIN to open ANY interest-bearing account.

I would recommend the account be opened by a Mexican. Biggest banks in the country are opening accounts for Latinos without any prerequisites whatsoever. The rest of us seem to be under the Patriot Act, and can't do banking without birth certificates, fingerprints, life history, etc. Wow, that Patriot Act has sure saved our country from influx of unidentified millions, hasn't it?

Wonder if some of our members who are familiar with the banking industry can post some advice as to how to deal with bank requirements for FEIN numbers?

[Lion]

Patriot Act

Did you know that The Patriot Act is actually an acronym. Our government loves its acronyms. But, don't ask me to tell you what it stands for until I've had more than one night's sleep. Anyway, just give in and get an EIN. If the church hires employees, a secretary or pre-school teacher or janitor or whatever, it needs an EIN anyway. If you can't beat 'em, join 'em. Besides, the pre-school parents want the EIN so they can claim dependent care credits.

[Black Bart]

Thanks for the information.

you might recommend to the preacher to get a copy of Publication 1828, because if they are doing the above incorrectly, "heaven" knows what else may be wrong.

They should have applied for an EIN so that they could have listed the Organization's Name and ID Number with the bank.

Do they fill out Form 990-T?

Tell the preacher, "It's time to get right with the Man!"

I was unaware of Form 990-T's existence, so I looked up the instructions -- to wit: "Any domestic or foreign organization exempt under section 501 (a) or section 529 (c) must file Form 990-T if it has gross income from a regularly carried on unrelated trade or business of $1,000 or more...Gross income is gross receipts minus the cost of goods sold."

So I think we're okay under that rule and besides, I don't want to make a federal case out of it. He's already "right" with the Man upstairs, tax on $15 shoudn't interest the one downstairs, and Pub 1828 wouldn't help (he doesn't grasp non-gospel work too good -- part-time preacher, part-time box factory). The only "what else" is a Wal-Mart rent receipt inscribed "Healing Hands & Living Waters Free Will New Hope Pure Gospel Apostolic Sanctuary* gave Willard Goodpastor $2500 of love offerings in 2007." It's signed by the church treasurer -- Mrs. Willard Goodpastor. Now, I ask you, who would dare impugn the integrity of such a document and certification? Good Lord! I certainly wouldn't.

We'll just give 'em his/her number and forget the whole thing.
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*While it's not the real name of the church -- around here, it could be.

[JohnH]

*While it's not the real name of the church -- around here, it could be."

We've got one named "United House of Prayer for All People" (also known affectionately a UHOP), but in all seriousness it ain't a bad name for a genuine place of worship.

[Black Bart]

Yuk-yuk

*While it's not the real name of the church -- around here, it could be."

We've got one named "United House of Prayer for All People" (also known affectionately a UHOP), but in all seriousness it ain't a bad name for a genuine place of worship.

Pretty good, John.

Asked client about a check this season; "Interesting name. Who's FG COGOP?"
Reply with raised eyebrows and quizzical look: "That's the Full Gospel Church of God of Prophecy."

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The world is my country,
all mankind are my brethren,
and to do good is my religion.
--- THOMAS PAINE, The Age of Reason