Destiny Church could be at risk of losing its tax-free status after a member of the public complained to Charities Services.
Charities Services today confirmed it will analyse the Church's tax-free status and see if its guilty of breaching the Charities Act.
The assessment will see if Bishop Brian Tamaki's church is guilty of any wrong doing.
If anything is uncovered a full investigation will then be carried out.
A spokesperson for the church this afternoon said they have had no communication with Charities Services so would not be commenting on the development.
The spotlight has been on Tamaki's church since his homophobic sermon blaming gays, sinners and murderers for earthquakes.
He also blamed a gay priest and the people of Christchurch for the devastating earthquakes that hit Canterbury in 2010 and 2011 which killed 185 people.
"The land actually speaks to God. It spews itself up after a while - that's natural disasters. Because nature was never created to carry the bondage of our iniquity," Tamaki said.
However, he later hit out at media for sensationalising the sermon and tried to back track on RadioLive saying it wasn't just gay people who were being punished for their sins, but adulterers, child abusers and anybody indulging in "extra-sexual behaviour".
Hannah Tamaki was also vocal about it on social media, on Saturday tweeting, "The hyped up loose so called jurnos owe my husband an apology. 4 stirring up hatred. That wasn't freedom of speech. It's Anti Christ jumbo" [sic].
Bishops comments also sparked Aaron Smithson to set up a petition calling for the church to lose its charity status.
It has currently attracted more than 120,000 signatures.
The petition, on Change.org, sprung up after the self-appointed Bishop's Sunday sermon in which he told his congregation the earth "convulses under the weight of certain human sin".
Charities Services today confirmed to the Herald it will begin an assessment after receiving a complaint from a member of the public.
"We take every complaint seriously and are following our usual process which is to make an initial assessment on whether there are grounds to believe that a charity may be in breach of the Charities Act, its own rules, or may be responsible for serious wrongdoing.
"This assessment will determine whether or not an investigation is required."
A spokesman said it couldn't comment any further while the process was underway.
When questioned about the petition last week, the Church didn't appear bothered as it believed it would "create a precedent" if it was to be deregistered.
"Other churches could potentially be deregistered ... There's a Charities Commission in this country and they audit our books every year and see how valid and legitimate everything is and so that's our position."
Tamaki's sermon came one day before the massive 7.8 earthquake struck central New Zealand killing two and leaving thousands stranded, with limited food, water, shelter and communication.
The comments have shocked people in the community - even Prime Minister John Key who called them "ridiculous".
"It's nothing to do with people's sexuality. I mean, it's just madness."