Why would a church need to apply for a Tax ID (i.e., EIN or Employer Identification Number)? There’s a lot of reasons. Here’s the three I’ve run across most often:
#3 – Realignment
It is fairly common for churches to partner together in order to afford a pastor. These partnerships usually don’t last forever. A church may close or maybe there’s a decision to breakup the partnership. Sometimes this results in a different church having to cut the paychecks. This church will need an EIN in order to cut the paychecks and report to the IRS.
#2 – New Church
I love it when this one happens. I wish this was the #1 reason because we need more and more new churches in order to reach more and more new people. Sometimes a new church will fall under the corporate umbrella of another church or their denomination until they are established. When new churches were ready to cut their own payroll, that was like a rite of passage…kind of like when one of your kids gets their driver’s license. I looked forward to helping them get their own EIN and learn how to cut payroll and report to the IRS. It was a proud moment.
#1 – Lost or Invalid EIN
This is by far the most common one. Many churches have been operating for a very long time. Usually well over 50 years. Sometimes as the treasurer duties are handed off to a new person, things get dropped. It happens. The church starts using an incorrect number for their Tax ID. Most often it is the pastor’s tax accountant that finds out first. When the accountant tries to e-file the pastor’s taxes, the tax return is rejected because the EIN is invalid. Here’s what you can do before you get a new EIN:
- Check Old Tax Forms: Churches are usually pretty good about keeping old records. Dig through the old financial records to see if you can find some old tax forms (W-2’s, 1099’s, an old coupon book). If you find anything, compare it to the one you’re using.
- Check with the Bank: It’s possible that the church has been with the bank so long that there is no EIN on file. Still, this is worth checking into. Likely it will need to be a signer that is able to get this info from the bank.
- Call the IRS: This sounds awful, but it’s worth a try. The number is 1-800-829-4933. I think they will try to look it up based on the church’s name and physical address. The caller should probably be the treasurer as they are an officer of the church.
If these all fail, watch the video and apply for a new EIN. It takes maybe 10 minutes tops.