For the full article: http://m.blogs.christianpost.com/liberty/irs-official-we-are-close-to-auditing-churches-again-16109/

ANSWER:  Eligibility for tax-exempt status is different from recognition of that status.  When the IRS recognizes the exempt status of an organization, it makes a written determination that the entity constitutes a tax-exempt organization.  When exercising this function, the IRS reviews, analyzes, and interprets the law, and agrees with the organization that it is exempt.  The process is almost always begun by the organization’s filing an application for recognition of tax-exempt status with the IRS.

ANSWER:  Section 107 allows a minister of the gospel to exclude from income the rental value – including utilities – of a home the church furnishes as part of his or her compensation (a parsonage) or the rental allowance it pays under the same circumstances to the extent the minister uses the allowance to rent or provide a home.  The home or rental allowance the church provides must be as payment for services that ordinarily are the duties of a minister of the gospel.  The services ministers perform are sacerdotal functions, such as the conducting of religious worship and the control, conduct, and maintenance of religious organizations (including religious boards, societies, and other integral agencies of such organizations), under the authority of a religious body.

On May 20, 2002, Congress passed the Clergy Housing Allowance Clarification Act of 2002, and President George W. Bush signed it into law.  One of the purported purposes of the new law was to support the constitutionality of the parsonage allowance.  The parsonage allowance is now limited to the fair rental value of a minister’s home.

Some churches and religious nonprofit organizations provide a parsonage for the minister’s use.  The value of the use of an employer-provided home is generally taxable to the recipient.  However, because the home is part of the minister’s compensation for services provided in the exercise of ministry, the value is excluded for income tax purposes (but not for self-employment tax).  In addition, the organization may designate a portion of the minister’s cash compensation as a nontaxable housing allowance for furnishing, utilities, and other maintenance items.

ANSWER:  In accordance with the Free Exercise Clause of the Constitution, a church has the protected right to expel or discipline its members.  A church member who concludes that he or she has been improperly disciplined or expelled from membership in a church has several potential claims or causes of action against the church available.  The remedies, claims, and causes of action include the following:

• If the church is located in a jurisdiction that permits review of church membership disputes, the member can seek to obtain a judicial review of the discipline or expulsion process.  If, following a judicial review, a court determines that the discipline or expulsion was improper, the court can rule that the discipline and/or expulsion was defective and declare the action of the church null and void, and, thereby, reinstate the member.
• A member can seek injunctive relief against the church, thereby barring the church from any actions of discipline or expulsion.
• A member can seek a declaratory judgment from the court clarifying and setting forth the member’s rights, powers, and privileges.
• A member can sue the church, its board of directors, and other members under tort law seeking monetary damages.  Possible causes of action include invasion of privacy, defamation, and negligent and intentional infliction of emotional distress.

When undertaking discipline or expulsion of a member, a church should take care to follow the rules that it has set forth in its organizational documents or internal policies and to document the measures taken to follow that process.

Unfortunately, the church is not immune from episodes of sexual harassment from taking place within its walls.  It is crucial that churches understand what constitutes sexual harassment, how to prevent it and how to handle it should it occur.

Sexual harassment is prohibited at the federal level by Title VII of the Civil Rights Act of 1964.  If your church is engaged in interstate commerce (a very, very broad view) and has at least 15 members, then the federal ban on sexual harassment legally applies.  Moreover, your state is likely to have its own legal requirements and it will not include the necessity of engaging in interstate commerce and frequently will apply to organizations with fewer than 15 members.

Although training is not required by federal or state law for churches, your church should nevertheless train its personnel and volunteers on the prevention of sexual harassment because several Supreme Court cases, federal and state court decisions and Equal Employment Opportunity Commission (EEOC) Guidelines make it clear that sexual harassment training is essential and is expected among all employees, including churches.

http://churchexecutive.com/archives/training-cuts-lawsuit-impact

ANSWER:  Generally, yes.  It is not a contradiction to use an employment contract while maintaining the employment at-will relationship.  An employment contract may be useful to a religious nonprofit organization for many purposes, apart from the basic and traditional specification of duties, terms of compensation, and period of employment.  Although most employers opt for employment at-will without a term of employment for most employees, a contract can memorialize that understanding and state that no oral agreements may modify that relationship.  Further, contracts may contain important mandatory alternative dispute resolution provisions and include provisions for the confidentiality of private information during and after employment.  Key personnel are often secured only by an employment contract, as they may place value on the certainty of a minimum employment term as well as benefits that have been offered or negotiated for.  Employment contracts may also be used to identify particular performance requirements and expectations, reiterate grounds for termination of the employment relationship, and allocate the ownership interests of creative works (intellectual property) created during the employment relationship.

Instead, the employees would obtain coverage through a separate, private insurance policy at no cost.

The proposed rule also reaffirms that churches and other houses of worship themselves are exempt from the contraceptive mandate in Obama’s healthcare overhaul, and makes it easier for institutions to show that they qualify for the exemption.

For-profit businesses with more than 50 employees will still be required to provide health coverage that includes contraceptive benefits, even if the employer has moral objections to such benefits.

http://articles.latimes.com/2013/feb/01/nation/la-na-insurance-contraceptives-20130202

ANSWER:  While the general principle is that creative works are owned by the individual who authored the work, the work may actually be considered the property of the employer (religious nonprofit organization) if the authoer prepared the work either (1) as an employee within the scope of his or her employment or (2) as a specially ordered or commissioned work if the parties have agreed in writing that the work is made for hire.

The measure would allow churches to avoid taxes on property used for activities other than religious worship.  The bill’s sponsor, Republican Rep. Justin Olson, said the current religious-exemption law has resulted in many lawsuits because county property assessors don’t have clear guidance on which organizations qualify for the exemptions.

Proponents say the proposed overhaul will allow churches to avoid property taxes on vacant lots that could eventually be turned into worship centers.

But critics say the proposed expansion could result in tax fraud because it would allow any religious organization to claim exemptions on property not used for worship.

http://www.businessweek.com/ap/2013-03-08/house-stalls-new-tax-exemptions-for-churches

But in a victory for the pastor, Kenneth L. Miller, Judge William K. Sessions III of Federal District Court in Vermont said he did not have to start serving his sentence until higher courts decided on a planned appeal, which could take at least two years, according to Brooks G. McArthur, one of Mr. Miller’s lawyers.

Mr. Miller’s lawyers have argued that Vermont, where an original custody battle over the girl was fought, was an improper venue for an alleged crime that took place in Virginia and elsewhere. While Judge Sessions had previously ruled that the case could be tried in Vermont, his ruling on Monday appeared to acknowledge that federal court rulings had been contradictory and that Mr. Miller’s appeal had a chance of success.

For the full article, http://www.nytimes.com/2013/03/05/us/kenneth-miller-convicted-of-aiding-in-parental-kidnapping.html?_r=0.