FEIN for Church

[Snaggletooth]

Here we go again. Another post about preachers/churches.

I have encountered some W-2s and 1099s from churches who have no FEIN number. The rationale between whether pastors receive W-2s or 1099s is never consistent. Many churches depend upon a member who might be an accountant, or their secretary, or maybe even the preacher himself.

Here is my question: Are churches REQUIRED to have an ID#?
Note that my question is NOT:
1. MAY a church have an ID# at their option, or
2. Would the govt PREFER that the church have an ID#

I realize also, the the IRS is slow to invade churches for compliance and doesn't want to get involved in court cases involving separation of church and state, and related taxation issues.

Look forward to hearing from you...

[Bird Legs]

EIN-Church

Would say yes. The church will occasionally pay for contract services for church
or ground maintenance, janitorial service, the minister, whatever. And again, 1099s & W-2s will need to be issued which will require the FEIN.
The minister will, should, receive a 1099 or W-2 for his/her services.

[Jesse]

My opinion only

Here is my question: Are churches REQUIRED to have an ID#?

If the Church hires, or will hire employees they will be required to obtain a number. Even if reporting is done on a 1099 they will need a Fed ID No. or someones Social Security number as the "Payor" to report the payments to recipients.

Also, to open bank accounts, again if a Fed ID No is not obtained, someones social security number must be used.

[B C]

Fein

The church I did the books for had a FEIN. They had a preschool attached to them with employees that received W-2's every year and also church staff that received W-2's. I don't know how they could get by under these circumstances with a number.

[Snaggletooth]

Yes, but

Good point, B C. But what I'm seeing is many churches who DO have an FEIN, but I'm coming up empty when finding a REQUIREMENT for them to do so.

In fact, in the 1040 instructions when filling out the daycare credit (Form 2441), it is noted that if the daycare provider is a religious institution and has no FEIN, then "TAX EXEMPT" is to be entered in the space otherwise provided for the ID#.

Does this suggest that churches are not required to have a FEIN??

[dmj4]

Jesse's post

Jesse brought up a point that I have found to be the case with churches. They don't think they have an EIN until you look at their bank statement and find that they did have one all along.

[RLymanC]

Ein

Yes, Yes, Yes.

The church may be tax exempt, but if they have employee's or contract labor the church must have a EIN.

This can be taken a step further and say even if the church has no employee's the fact that they are a non profit requires a EIN.

http://www.irs.gov/businesses/small/article/0,,id=97872,00.html

[Black Bart]

Nobody knows (for sure)

My man, you've asked one of the most difficult questions in the world to have answered correctly and definitively, and I don't mean just about church EINs. The hardest part of any question to uncover is this: "are they required to...." And the answer to that is--nobody knows for sure.

I've tried looking things like this up and scoured the countryside for conclusive answers, but they're rarer than unicorns. You can get good, helpful speculation from many sources: friends, colleagues, academics, internet, IRS, big thick books, and it's always the same. Most of us have an opinion and many sources (online for instance) will tell you that "it's best" to have one, or "things will run more smoothly" if you get it, or any one of a thousand good reasons to get one--or maybe even one that says you can completely do without it. But none of those things quite hit the nail on the head. You think that yes, it's nice to know the experience of others and the odds that such-and-such will happen if I do it or don't it, but the thing is, you want to absolutely know what the rules of the game are and then you can decide what course of action to take from there.

I've looked at the IRS website and their FAQS and forms, etc. They furnish you a PDF form to print out. They just don't tell you whether or not you must do it. About the only conclusion you can draw from that is a sort of negative inference; that is, although a requirement rule (maybe) does not exist; an SS-4 form does exist, ergo they mean for you to fill one out (perhaps).

After you posted, I looked at a few denominational sites for guidance and all I could find was the statement, "You need to get an SS-4 form and fill it out because... or "You should get an SS-4 form..." No help there. If IRS says anywhere on the site that it's required, I can't find it. As to calling them up, you'll get all kinds of offers to send you forms and tell you how to fill them out, but what you're asking is, in their opinion, such an "off-the-wall" question that they'll become annoyed with you if you persist. They don't know or care what the rule is--all they know is they're trying to help you fill out the form and you won't do it, shut up, and go away. About all you can do with a question like that is try to outlive the reason to be asking it. Good luck.

P.S. Just thought--if there is such a creature in the IRS regs, I'll bet Beauregard would know about it. What do you think? Plead for his assistance?

[S T]

From SS-4 instructions

Snags, Let's see if this answers your questions about being required to have an EIN#

Who Must File
You must file this form if you have not been assigned an EIN before, and:

You pay wages to one or more employees, including household employees.
You are required to have an EIN to use on any return, statement, or other document, even if you are not an employer.
You are a withholding agent required to withhold taxes on income, other than wages, paid to a nonresident alien (individual, corporation, partnership, etc.). A withholding agent may be an agent, broker, fiduciary, manager, tenant, or spouse, and is required to file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.
You file Schedule C, Profit or Loss From Business, Schedule C-EZ, Net Profit From Business, or Schedule F, Profit or Loss From Farming, or Form 1040, U.S. Individual Income Tax Return, and have a Keogh plan or are required to file excise, employment, or alcohol, tobacco, or firearms returns.

Also see this link on around page 3 and page 4 http://www.irs.gov/pub/irs-pdf/p1828.pdf While it states the church "should" have an EIN for certain filings, bank accounts, etc, it still does say required. However, if the church is issuing statements for contributions received under 501(c)(3), then they would need an EIN#.

The church would also need an EIN# for certain filings with the State as well as Federal.

Sandy

[Snaggletooth]

Thanks

Thanks to all who ventured an opinion.

Looks like the "official" answer is "YES" according to most of you, and this can be confirmed by IRS publications.

However, Sandy's link (the IRS pub) only emphasized the "real world" side of this. The pub says "yes" but goes on to tell you that a church is protected by law from being audited, unless a certain IRS official suspects there is unrelated business income or the entity is not acting like a church.

IRS even charges a user fee for churches who apply for 501(c)(3) status. Lots of reasons for churches not to be bothered with it, and apparently IRS can't touch them...

Thanks S T, and others.

Ron Jordan