AboutHarvey Mechanic Expertise Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer question about Nonprofit's Unrelated Business or how to fill out forms. This forum is only for legal questions about a specific nonprofit asked by members or those otherwise directly effected by the specific nonprofit organization.
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Our Senior Pastor went on a short term mission trip with other members of our church. The trip was funded through donations from the congregation and, if short, the participants understood that they were to pay out-of-pocket.
At the end of the trip, all members of this mission team had to pay an additional $110.63 for shipping (I am assuming luggage, etc.)and for activities while on the trip.
Our Senior Pastor did not lead this as we have a mission team in place that was involved on this trip. Further, mission trips are not a requirement of his duties. This is the first mission trip that he has attended in his twenty years of service.
He has asked for a non-taxable reimbursement for the $110.63 as he does have this benefit per his salary contract. Is this a legitimate expense that is allowable?
Thank you for your time!
Lisa
Answer You wrote that he does "have this benefit per his salary contract". I am not going to inform you that you should not reimburse him if his contract provides that requirement. I would need to review the wording of the contract if you erred and just concluded that he has the benefit. If it is not required in the contract, then there should not be a reimbursement unless the his services on the trip for the church were necessary and ordinary.
www.irs.gov/pub/irs-pdf/p535.pdf
on page 2 right column:
To be deductible, a business expense must be
both ordinary and necessary. An ordinary ex-
pense is one that is common and accepted in
your industry. A necessary expense is one that
is helpful and appropriate for your trade or busi-
ness. An expense does not have to be indispen-
sable to be considered necessary.
Reimbursements may only be for items that would be a business expense, whether paid directly by the organization or reimbursed by the organization.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
