- - - Rejoice in the Lord always ... again I say Rejoice !!! - - -

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                      TO:  Interested Ministries                                                                                                                 FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                                      FILE:  0108-01/all

                       RE:  Form  (IRS) 990 Issues                                                                                                           Originated:   December 2001

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       Non-church Ministries need to file the US Government form 990, or if you have annual income of $100,000 or have only some $250,000 of assets you can file a short version or form 990EZ. When we use the term "990" below we mean the applicable 990EZ or 990.

    These forms are "information" returns ...... obviously not "tax" returns, since a Ministry has no taxable income subject to Federal Income Tax.  It's primary reporting objective is to substantiate the fact that the money that came into the Ministry was, in fact, used for it's tax exempt purpose and the Ministry's assets over liabilities were not unrealistically excessive or 'hoarded."

    The Ministry expense reporting emphasize is to show how much money was spent directly on Ministry "Programs", or for it's tax exempt purpose. Then, in some cases,  also show how much was spend for the necessary "Fund Raising" and the amount spent on the needed and essential "General and Administrative" Ministry costs.  Such expenses are dubbed  "Functional Expenses."  

    A Ministry's annual Form 990 is available to the general public. Go to www.guidestar.org  about a way of getting your Form 990 out on the web; a Ministry might want to make this known within their annual report.

    Please go to  http://www.form990.org  for more details of how the 2002  (plus subsequent years)  form 990 can be prepared electronically. This will also give you info about how you can also do "e-filing" for state equivalents of the IRS Form 990..

    Ministries who get their donations from their members (e.g., Churches, Camps and Schools), need to be financially accountable to their membership via annual reports, etc.  This often includes a financial audit by qualified outside accountants. 

    As of now (1)  Churches do NOT, by law, have to file any 990 forms. Due to the nature of their Ministry, some publicly supported Christian Ministries (especially Mission Agencies) can appropriately become "legal" churches and NOT file annual forms 990.

    Ministries (2) who get their donations from the Christian Public (e.g.,  Ministries that carry the name of a high profile person  (Billy Graham Evangelistic Assn) -Mission Agencies, Radio/TV programs, etc ) need to be financially accountable to their wide range of generic constituents.   Mission Agencies (especially those that are smaller and handle some $200,000 annually or less ) need to be financially accountable to their donors.  These publicly supported Christian Ministries can be financially accountable to such donors in at least two ways:

•   A cost effective way to do this is for the Mission Agency to annually file form 990 and go out of their way to provide a copy to interested donors or constituents. I know it is tempting to not have to file forms with the government, but doing so might "push" you to also be more accountable to those who support you.

•    Become a member of the "Evangelical Council for Financial Accountability - ECFA" .... click here for specifics. Membership requirements include annual financial audits by qualified outside accountants.  Smaller groups will find it difficult to afford such a membership.

    Please go to  0110  for links to IRS resources, but I have also been provided with the following relevant INTERNAL REVENUE CODE REFERENCES

§6033(a)(2) exempts certain organizations from filing Form 990. These include:
§6033(a)(2)(A)(i): churches, their integrated auxiliaries; and conventions or associations of churches;
§6033(a)(2)(A)(ii): organizations described in §6033(a)(2)(C);
§6033(a)(2)(A)(iii): the exclusively religious activities of any religious order      and
§6033(a)(2)(C)(i): religious organizations that are not private foundations and whose average annual gross receipts do not exceed $5,000.

     Let us know at   Jim@bcidot.org  if you have any comments or questions.

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      The bulk of this Publication originated in December 2001 and was .  UPTD: May 26, 2008  

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        (1) An Online Document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
        (2) WRIT formats include the perspective of   Jim@bcidot.org   via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, or a hypothetical Online conversation (thread) with members of a MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; or via a FAQ, or a response to Frequently Asked Questions. 

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