AboutHarvey Mechanic Expertise US 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 questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation.
To search my previous answers you can do a Google search: site:allexperts.com/q/nonprofit [with your other search terms appended].
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Education/Credentials B.S. Columbia University in New York City, 1970
J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude
Question Is it ok to borrow money from your local church, as a loan to be paid back to the church, not from other peoples tithes or offering but maybe from offerings that yourself have made in the past, when what you are asking the church is much less than what you have offered or tithe into that church.
Answer The past donations are not relevant as to loans. However, the church is permitted to refund past donations. If, instead, it gives a loan it will need to be secured and would need to call for market rate interest. If the loan is inadequately secured and that is given to an
insider then the IRS treats the proceeds as compensation to the
insider which may result in a total of excessive compensation to
that person which is a violation of IRS regulations.
www.irs.gov/irm/part7/irm_07-025-003-cont02.html#d0e4749
If you then read two sections down you would see that such
violations may result in excise taxes for "intermediate
sanctions"
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
