The belief that Allah is everywhere is a false belief that is contrary to the view of the Muslims, which is a belief that Allah rose above His Throne and is above His creation and He is with us by His knowledge.

Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said:

This view has implications that are very, very false because if you say that Allah is everywhere, this implies that He is in lavatories – Allah forbid – and in other places that filled with impurities and filth, and who would describe his Lord in such terms? It is not possible for any believer to describe his Lord in such terms.

The one who has some knowledge and awareness of this matter must advise those who hold contrary beliefs, because this is a major issue of belief, especially if the one who holds contrary beliefs is the imam who leads the people in prayer. If he responds to the advice and adheres to the way of Ahl as-Sunnah, then praise be to Allah. But if he persists in this false belief, then there is a difference of scholarly opinion as to whether prayers offered behind him are valid. The view favoured by Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) is that one may pray behind him, because he is not deemed to be a disbeliever just because he believes in this innovated view; usually no one falls into innovation except one who misinterprets things and is ignorant.

 It is proven in the Quran and Sunnah (prophetic teachings) and by the consensus (ijma’) of the salaf (early generations) of this ummah (global Islamic nation) that Allah is above His heavens over His Throne (as befits His Majesty), and that He is the Exalted, Most High. He is above all things, and there is nothing that is above Him. Allah says (interpretation of the meaning):

“Allah, it is He Who has created the heavens and the earth, and all that is between them in six days. Then He rose over (istawa) the Throne (in a manner that suits His Majesty). You (mankind) have none, besides Him, as a Wali (protector or helper) or an intercessor. Will you not then remember (or receive admonition)?” [32:4]

There are many similar Ayat (verses) and Ahadith (prophetic narrations). But at the same time, Allah tells us that He is with His slaves wherever they are:

“Have you not seen that Allah knows whatsoever is in the heavens and whatsoever is on the earth? There is no najwa (secret counsel) of three but He is their fourth (with His Knowledge, while He Himself is over the Throne, over the seventh heaven), — nor of five but He is their sixth (with His Knowledge), — nor of less than that or more but He is with them (with His Knowledge) wheresoever they may be.” [58:7]

Saying that Allah is with us does not mean that He is mixed with (or dwells in) His creation; rather He is with His slaves by His knowledge. He is above His Throne and nothing is hidden from Him of what they do.

Allah says in Quran: “And We are nearer to him than his jugular vein (by Our Knowledge).” [50:16]

We ask Allah to guide the Muslims.

(Source - Islam Q&A)