Is Your Online Church IRS Compliant?

online church IRS compliant

Like your physical church, what your ministry does online is held accountable to the IRS.

When you took your church online, did you know that it needs to meet compliance requirements? Like your physical church, what your ministry does online is held accountable to the IRS.

The pandemic caused a massive shift from traditional ministry to online ministry and church services. Within the change, it was easy to let the finer points of compliance slip through the cracks. Today, I will share a five-point checklist to audit your online ministry and protect your church on the internet.

1. Establish social media and digital media policies

If a church or a ministry will go online, they need to have policies set into place. These policies need to cover how to interact with others online through social media and the website and manage the church’s social media, privacy policies, and more.

Some topics a church’s social media policy should outline are:

1. Who and what can be represented in the photos posted
2. Protection for children and youth who are in foster care systems and custody issues
3. Your privacy policy
4. Who can post on social media (does someone approve posts before they are published?), and what kind of content is allowed
5. How to interact with political matters and hot topics
6. What content is acceptable in recordings and videos
7. Policies related to purchasing and licensing content from other churches, ministries, or companies

If you need help with other policies for your church, we offer a Policies Suite to help you protect what God has called you to lead.

2. Create secure ways to accept online donations

With COVID radically changing how we do church, digital ministry has taken the forefront. Now more than ever before, people want the convenience of giving tithes, offerings, and donations online.

However, you want to ensure you make giving online as secure as possible. Security for donations means a couple of different things:

Firstly, you want to make sure that your donors are not liable. Having a legally structured church that is 501(c)(3) approved gives donors the confidence that not only is your church and ministry legitimate, but that their donations are protected as well.

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Secondly, you will want to make sure you use an online giving platform that is not easily compromised. Use secure platforms like Square, Stripe, PayPal, and more to ensure a donor’s donation is going to the right place and that their information is protected.

3. Obtain licenses for using songs and other media

Did you know not all songs and graphics online are free to use? That’s right; some content can cause your church or ministry some severe problems if you use it without permission. Copyrights and trademarks could very well protect worship songs and other graphics you use online. Licensing music and other digital resources are essential to factor in as well.

If you are using content that is not originally yours, make sure you obtain a license. If you do not, you could jeopardize your credibility and legal standing.

4. Perform your own digital IRS compliance audit

Your online ministry is held accountable to the IRS. The IRS publication 1828 lists qualifications and rules nonprofits must follow. As a nonprofit holding 501(c)(3) status, your church or ministry also must abide by these rules. When a church or ministry violates one of the listed rules in publication 1828, the organization is at risk of having its 501(c)(3) status revoked.

With this in mind, you will want to take an internal audit on if your digital ministry complies with IRS standards. It is wise to add a section to your policies that would help keep the church in line with IRS compliance.

When taking count of your internal IRS audit for your digital ministry, make sure none of the following negative behaviors are present:

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1. Inappropriate comments, pictures, or gestures
2. Political comments, stances, or rants: As is listed in the IRS publication 1828, a pastor or church can’t claim a political party from a public platform, including social media. However, a pastor can address beliefs and hot political topics over social media. Let your policies be clear on how your staff and pastors can interact with political matters on social media to stay within the IRS compliance.

3. The pastor’s or church staff’s behavior: As a church staff member, one is held to a higher standard and faces scrutiny more frequently. The staff member’s conduct is reflected not only on them individually but also on the church. Actions to avoid include, but are not limited to:

Angry rants
Theological debates
Slandering businesses, organizations, and individuals
Behavior that violates the church’s bylaws of restricted activities

You will want these negative behaviors addressed within your digital policies. Without clear communication and accountability, it’s very easy to misuse social media. Churches and individuals can also be sued for violating privacy, custody issues, and related situations regarding this matter, so it is crucial to take these policies and practices seriously.

5. File annual reports

While this checklist does not apply to all ministries and nonprofits, be careful that your organization doesn’t require an annual or biannual report of some kind. Different states have various requirements for churches and ministries. You will want to be fully aware of what your church or nonprofit needs to continue operating in-person and online.

To find out if your church or ministry needs to file annual reports, refer to your Secretary of State’s website to see what they require for your ministry. These reports have caught many churches and ministries unaware, and it causes many problems for them down the road.

Read more from Christine Bové.

First published on Used by permission.