Minister - Love Offerings Taxable?

[DorChe]

If I'm understanding Minister Taxes, love offerings given for service rendered are taxable. But, if the love offerings are given to show appreciation and not attached to a specific services are not taxable and considered to be a gift. Is this correct?

Donor wrote a check to the Church but entered the Minister's name in the "For" line on the check. Can someone verify that for the donor it is considered a tax deduction because it's written to the church, and for the minister it is considered to be a taxable income?

Thanks

[buzzardbreath]

Love Offerings

Dorchester, are not love offerings given to the church and not to the pastor? If they are not, then they should be.

Minister is off the hook for income if offerings are given to the church. If your clients' situation earmarks the money for the preacher, that needlessly subjects him to the possibility of having to report income.

[AJsTax]

Designated for one person?

If the person making the gift marked it for one person, one family, even if on a mission, that is a gift and not a deductible contribution. They can earmark it for a specific function of the church such as building fund or mission fund, but never for a person.
Not sure about the minister's side, but my first reaction is that it would be taxable because it is tied to his work.

[buzzardbreath]

Conflict in purpose

Sorry, if this is a gift, it cannot be taxable income for the recipient.

[MAMalody]

This is a troubling area for pastors and churches. Normally gifts received for personal reasons are not taxable income to the recipient. Often a church is asked to "funnel" a designated gift to a specific individual. If that individual is involved in a ministry and the church is given control of the gigt and chooses to honor the request, it should be treated as compenasation to the individual receving it, and included in the church's payroll reports. So the issues here is the intent of the giver and the control of the church.The IRS, in the past, have been reluctant to allow gifts to the pastor through the church and not count it as taxable income to the pastor. The safest course is to have the individual make the gift directly to the individual.

[kpangelinan]

This is a troubling area for pastors and churches. Normally gifts received for personal reasons are not taxable income to the recipient. Often a church is asked to "funnel" a designated gift to a specific individual. If that individual is involved in a ministry and the church is given control of the gigt and chooses to honor the request, it should be treated as compenasation to the individual receving it, and included in the church's payroll reports. So the issues here is the intent of the giver and the control of the church.The IRS, in the past, have been reluctant to allow gifts to the pastor through the church and not count it as taxable income to the pastor. The safest course is to have the individual make the gift directly to the individual.

This has been a huge controversy (not necessarily among IRS officials, tax court, etc.), but among tax professionals, churches and individuals themselves......I had to do tons of research on this a few years ago and my end result was that the above post is good advice! I'd say, all in all, it's a grey area that leans towards taxable income, but give it to the pastor directly would be my advice.

[DaveO]

The other side of this is the giver who comes in with a list of "donations" made to various clergy throughout the year. I explained that gifts to an individual are never deductible. But they are priests, she said!

[kpangelinan]

The other side of this is the giver who comes in with a list of "donations" made to various clergy throughout the year. I explained that gifts to an individual are never deductible. But they are priests, she said!

I'm glad you mentioned that......it should've been prefaced on my post....thanks! Good point! If it's written directly to the priest or minister....not tax deductible!

[oceanlovin'ea]

sam principle

Using that principle, if our clients write the checks to "us" personally, is it a gift? Or is it taxable income? True it is usually for a service we have provided that they are giving us money.
But by the same token, a minister is in the business of giving advice and counsel and is usually compensated by the church that he works for. Usually from what I am told most "love offerings" come as a result of a special preaching service the minister has performed.
People don't just walk up and had him $20 or $50 and say I want to give you a gift. They write a check because they consider it a tax deduction. So if it is a tax deduction for them, it should be income to the minister.
Maybe my thinking is a little off base to some of you. But just my opinion.

Linda, EA

[ATSMAN]

The way I advise my clients is that if you write a check to John Smith the pastor then don't expect to deduct that as charitable contribution. Usually these situations will come up when the family is pleased with the service of the pastor for a wedding or baptism and that is really a tip, not a gift. Because if the intention is truly gift, then they should not be expecting to deduct that.

If you want to deduct charitable contributions, make a check payable to the organization or Church and always get a written receipt.

Recently I read an article where an IRS agent was caught using forged receipts from a Church to deduct charitable contributions.

[kpangelinan]

Using that principle, if our clients write the checks to "us" personally, is it a gift? Or is it taxable income? True it is usually for a service we have provided that they are giving us money.
But by the same token, a minister is in the business of giving advice and counsel and is usually compensated by the church that he works for. Usually from what I am told most "love offerings" come as a result of a special preaching service the minister has performed.
People don't just walk up and had him $20 or $50 and say I want to give you a gift. They write a check because they consider it a tax deduction. So if it is a tax deduction for them, it should be income to the minister.
Maybe my thinking is a little off base to some of you. But just my opinion.

Linda, EA

If a love offering was a result of service, then sure, income to the minister, but I still can't see the tax deduction (charitable donations) to the giver as it has to be donated to a recognized non-profit or defined church by the IRS.

If a love offering is a truly a gift, then never taxable to the minister IMO and still no tax deduction to the giver. As a matter of fact, the recipient of any gift doesn't pay tax on the gift (assuming it's liquid, like cash).

[MAMalody]

Using that principle, if our clients write the checks to "us" personally, is it a gift? Or is it taxable income? True it is usually for a service we have provided that they are giving us money. But by the same token, a minister is in the business of giving advice and counsel and is usually compensated by the church that he works for. Usually from what I am told most "love offerings" come as a result of a special preaching service the minister has performed. Linda, EA

Agree somewhat.

People don't just walk up and had him $20 or $50 and say I want to give you a gift. Linda, EA

Wrong. This happens all the time. I have seen this gift be as much as $1000. I do agree that it may be hooked to an overall appreciation of the ministry of that particular pastor or some past issues he may have helped that individual with...but it is usually general in nature and not specific unless it happens to be a funeral or wedding.

They write a check because they consider it a tax deduction. Linda, EA

Wrong. Most people that give an individual pastor a gift do not expect to be able to deduct it....at least in my experience....and they don't think he should have to pay taxes on it.

The above are my opinions from working with pastors and church folks in 28 states and four countries. Of course, there are exceptions to all things, however, as a general rule those indicated above have been pretty firm from my experience.

[Jiggers]

I had, notice "had", a client that gave weekly checks direct to her preacher (in the preacher's name and not the name of the church). She wanted to take that as a contribution. I said no.

I explained why. Didn't matter.

She left.

[Gary2]

This may be a minor point on the original post, but the "For" line (or memo line) on a check is commentary, not contract. Unless there's additional missing information, I wouldn't assume that the donation was in any way legally restricted towards being given to the minister, nor would I assume that it was actually given to the minister.

[Burke]

You are probably right that there is no legal contract to give it to the minister in this case. However, it does signal intent of the donor which I am sure the IRS would leap on. Especially, if he/she actually wound up with the funds in the end.