Expert: Dan Hotchkiss - 1/9/2011

Question
I knoww of someone who is having checks written to his "ministry"
the "ministry" has no website, no office or staff, doesn't do anything. my mother lives w/ this individual and all her rent and misc checks are made out to the Ministry so it's not recorded as income.  how can this be done legally?

Answer
From the information you give, the arrangement certainly looks fishy. IRS oversight of congregations is looser than for other charities, but the same essential criteria apply. You can learn more about these by downloading the IRS tax guide on the subject: http://www.irs.gov/pub/irs-pdf/p1828.pdf

If, after reviewing the requirements, you decide that you have evidence that your mother's landlord is breaking the law, you have to decide what to do. One option is to report him or her to the IRS (see http://www.irs.gov/individuals/article/0,,id=106778,00.html). You would need, in this case, to consider possible adverse consequences, including the likelihood that your mother would lose her home or be vulnerable to reprisals from a hostile landlord.

You might wish to discuss the situation confidentially with an experienced tax attorney or accountant before taking any action. Of course, you will need to pay for this.

Dan

www.danhotchkiss.com