Mileage reimbursement for church volunteers

[drc34718]

Question has arisen as to whether a volunteer for a denomination (Baptist, Methodist, etc)
who conducts business on behalf of the denomination (such as board member, etc) is entitled to the business mileage reimb rate or the charitable mileage rate?

Any comments appreciated..Individuals are not employees of various denominations nor do they receive stipend or other monies outside of reimbursement of actual mileage costs.

Can the business rate be used in this instance as opposed to charitable rate since individual does act in a business context for the denomination.

Thanks

RD Cooper

[taxmandan]

Charitable rate. Since the church is a not-for-profit organization, there is no 'business' activity. The business OF the church is still performed as a volunteer and thusly a charitable activity.

[JohnH]

That's interesting

I was about to say that volunteers should be reimbursed at the same rate as church employees (standard business mileage rate), but I can see how your post makes sense. I'm still inclined to go with the business rate, though.

[Roland Slugg]

Charitable rate

Dear RD Cooper

I'd recommend the charitable rate of 14¢ per mile. Since your client is a volunteer, that is the mileage rate he could deduct as a contribution, so a reimbursement at the same rate will create no income. If the reimbursement rate is higher, the excess will be taxable income. In order for the business rate to be used (without creating income to the recipient) there would need to be an employer-employee relationship. (Regs 1.62-2(d))

[fliszt]

I vote chartible rate.

My thought process: IRS allows business mileage deduction because an individual is reaping an income. IRS allows charity mileage allowance to provide charities with an enticement for others (non-paid) to help with their endeavors. I do not believe the IRS would allow a business mileage deduction for some unpaid person. Therefore a charitable deduction would be my best guess. right or wrong. I’m sure others on this board will continue to point out specifics for you.

[JohnH]

Another view

I know the ECFA isn't a tax authority, but they recommend reimbursing at the business rate.

http://www.ecfa.org/Content.aspx?PageName=ART-InformationReporting2007&PrintVersion=True

[thomtax]

I know the ECFA isn't a tax authority, but they recommend reimbursing at the business rate.

http://www.ecfa.org/Content.aspx?Pag...ntVersion=True

John, thanks for this link. I try to bookmark what may be of help at some point and am glad to have this to add to them.

LT

[veritas]

I'm not buying

the business mileage rate for charity non-employees.

I think the maximum would be actual expenses or the standard mileage rate of 14cts.

Would like to know for sure.

[fliszt]

I'll be darned.

The link above does state this:

<"Volunteers. Payments to volunteers that represent a reimbursement under an accountable business expense reimbursement plan for expenses directly connected with the volunteer services are not reportable by the church. Payments for auto mileage up to the maximum IRS rate for business miles (48.5 cents for 2007) are generally considered to be tax-free for volunteers">

How 'bout that. Goes to show you how my logic is flawed.

[BOB W]

the business mileage rate for charity non-employees.

I think the maximum would be actual expenses or the standard mileage rate of 14cts.

Would like to know for sure.

The business rate includes depreciation, so it doesn't make sense to get depreciation where a business relationship does not exist.

[JohnH]

Just another source

I'm not saying that the ECFA info is right - their advice could be flawed. I just threw it into the mix for discussion purposes. Other info on the page is essentially right but incomplete (the 1099 info, for example). And their 1098 info is incorrect, IMHO. There are no cites or references accompanying the guidelines, but they are written by a CPA (Dan Busby) who has authored books on Church & Ministerial issues..

Anyhow, I'm just as interested in finding a definitive answer as everyone else on this thread because I serve as my church treasurer and we do occasionally reimburse volunteers for mileage. Most consider it a part of their charitable work, but there are situations (such as seniors, etc) who are willing to drive their cars for certain charitable purposes but can't afford to cover the costs. I'd like to be sure we are doing it right.

(Where's Mike Malody when you need him?)

[MAMalody]

IRC 170(i) of the tax code states that "for purposes of computing the deduction under this section for use of a passenger automobile, the standard mileage rate shall be 14 cents per mile."

Publication 526 states, "You may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be unreimbursed, directly connected with the sevices, expenses you had only because of the services you gave and not personal, living, or family expenses.

In 2003 both houses of Congress overwhelmingly passed slightly differenct versions of the Charity Aid, Recovery and Empowerment Act (never enacted due to failure to reconcilement). It would have allowed charitable reimbursement for mileage not to exceed the standard business rate. Question why would this be necessary if your could already reimburse volunteer's miles at the standard mileage rate.

In a press release that went along with this Senator Russ Feingold said, "under current law, volutneers who use their cars for charitable purposes may be reimbursed up to 14 cents per mile...." Here we have a statement by a United States Senator that under current law it is not the standard busines mileage rate.

Revenue Procedure 80-32 indicates that the charitable standard mileage rate of 14 cents per mile is proper for volunteer church member mileage.

In spite of the fact that Busby is pretty good and ECFA is even better, the evidence as I see it, indicates that if you are not an employee of the church then 14 cents is the correct figure to use

Mike.

[Gene V]

google search

A couple of findings while doing a google seach.
NO. 1
Yes, a volunteer can be reimbursed for mileage incurred for a qualified charitable organization. Whatever rate the organization chooses to use is the rate that applies, there is no IRS policy on reimbursement rates.

Hope this helps.

John Stancil, CPA

NO.2
For the year 2007, the IRS has issued the mileage reimbursement rate of 48.5 cents per mile. This means that if the church establishes a mileage reimbursement policy for when church volunteers and/or church staff use their personal vehicles for church business, the maximum reimbursement rate is 48.5 cents per mile. While many churches chose to reimburse people at a lesser rate, it would appear to be prudent to use the government standard, so as to avoid issues of people feeling used and or abused for Kingdom service or in extreme cases, encouraging people to inflate their actual mileage to compensate for lower reimbursement rates.

The IRS requires that a mileage record be kept of all reimbursed miles. The record must be kept for audit purposes for at least five years either by the church or by the individual. We recommend that the church retain the mileage records for backup to the reimbursement check issued. The mileage record should include the individuals name, date of travel, purpose for the travel and actual miles driven. The IRS further stipulates that mileage between home and the church is not reimbursable. They consider that mileage a part of the normal employment process.

If a person leaves from home to go to a church function or appointment, then drives to the church office following the appointment, only the difference in total mileage of going straight from home to the church is reimbursable. Example: Normal distance from home to the church is 10 miles. You leave home to go on a hospital call and from home to the hospital and then on to the church is a total of 15 miles. Only difference (15 miles – the normal 10) = 5 is reimbursable.

In addition, all documented mileage reimbursements that are at or below IRS issued rate are not taxable. They are not reported on 1099 or W-2 documents.
© Copyrighted

[David1980]

I'm not so sure. On that one, No 1 doesn't agree with No 2 (and No 1's answer seems rather suspicious. No IRS policy regarding mileage reimbursement rates? At all? We know that to be false.)

No 2 doesn't give any sources, so can't confirm it from what he says.

IRS Pub. 525 says on the top of page 2 "Expiration of relief granted for Hurricane Katrina" and includes "Exclusion from income of increased mileage reimbursement."

IRS Pub. 4492 (Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma) on page 4 has Katrina related mileage reimbursement amounts for charities.

40.5 cents from Aug 25 - Aug 31 2005, 48.5 cents for Sept. 1 - Dec. 31 2005, and 44.5 cents for Jan. 1 through Dec. 31 2006.

Why even list the mileage reimbursement rates for Katrina if they are the same as the normal charitable rates (which would be same as normal business rates)? Why specify the increased rates for Katrina have expired if they were the same as normal charitable rates?

The only way it makes sense to me is if the normal charitable rates were lower than Katrina rates, which would then make the normal charitable rates for reimbursement lower than business reimbursement rates.

[outwest]

I think you can reimburse at any rate..

the question is whether it's taxable.

Business reimbursement up to 48.5 (50.5 this year) is not, and excess over that is taxed.

I think charity reimbursement gets the same treatment using 14 cents. The charity can reimburse 48.5 cents but the 34.5 cent excess would be taxable as line 21 other income.

My 2 cents.