Inherent Risk is defined as "what could go wrong, in the absence of internal controls".

Internal Controls are defined as...systems in place that identify errors and irregularities on a timely basis.

With Senator Grassley's inquiry with six televangelists, the questions, as documented in press releases, seem to be directed at governance and reporting issues. These two operating areas, independent yet dependent in function, require two important factors, transparency and accountability.

How do you define these terms? In this post and following, we will briefly define and explore these important, vital characteristics for a church.

Transparency is defined well by Joyce Meyer Ministries. Upon walking into their ministry headquarters, the following words are embedded in the concrete:

In order for a contribution to be deductible for income tax purposes, the contribution must meet 6 general requirements. In our previous post we discussed the gift of cash or property. In our post today we will discuss what types of organizations can receive contributions and provide substantiation to the donor in order to deduct the donation for income tax purposes.

Requirement #2 for contributions is that the donation of cash or property must be made to or for the use of a qualified organization.

Intermediate Sanctions allow the Internal Revenue Service (IRS) to assess excise taxes on excess benefit transactions that occur between a disqualified person and a 501(c)(3) or 501(c)(4) tax-exempt organization.

What is an excess benefit transaction?

An excess benefit transaction occurs when the value of the benefit to the disqualified person exceeds the fair market value of the services rendered. Examples of potential excess benefit transactions include, but are not limited to:
o Unreasonable compensation,
o Personal use of church property,