The recently enacted Tax Cuts and Jobs Act of 2017 called for many changes in tax law, tax reporting, and laws surrounding charitable deductions, among other things. Two such changes will significantly affect churches and affiliated religious organizations. These changes can be found in Section 512(a) paragraphs (6) and (7).
These changes require new methods of calculation for tax reporting and payment for income earned through unrelated trades or business for churches and affiliated organizations and declare certain amounts paid by tax-exempt organizations to be taxable income (e.g., for a parking facility used in connection with qualified parking, for a qualified transportation fringe benefit, gym memberships, etc.).
These changes have not yet been clearly defined and the reporting method for them is currently unknown. A delay in implementation of changes will allow churches and religious institutions time to ensure they are abiding by the new law and time to train treasurers, volunteers, and stewardship teams in appropriate new practices. An implementation delay will also allow the Treasury and Internal Revenue Service time to outline clearly the definition of these new requirements and create the reporting structures necessary for tax-exempt organizations to comply with the law.
The Christian Church Foundation, Disciples Church Extension Fund, and Pension Fund of the Christian Church each represent the financial interests of the Christian Church (Disciples of Christ), managing over $4B in assets. As advocates for the financial wellbeing of all of our churches and affiliated organizations such as colleges and universities, nursing homes, children’s homes, and other ministries, we respectfully add our voices to those of organizations, including Church Alliance, the American Institute of CPAs, and the National Council of Nonprofits, among others, that have requested a delay in implementation of changes relating to Sections 512(a)(6) and (7) of the Internal Revenue Code that were enacted as part of the recent Tax Cuts and Jobs Act (“TCJA”; Public Law No. 115-97).
We believe it is in the best interest of the Christian Church (Disciples of Christ) and other churches and religious organizations to delay the implementation of these new laws until Treasury and the Internal Revenue Service have accurately defined the measure of the law and created means to adhere to these new regulations or repeal this section of the law due to the undue burden this will place upon volunteer-based organizations.
If you would like to add your voice along with ours, please click here and fill out the corresponding form.
To read a full account of Sections 512(a)(6) and (7) please click here.
To read the full statement by Church Alliance please click here.
To view a full list of the Supporting Signers please visit the Pension Fund website here.