Nonprofit Law/Love offerings


QUESTION: We have two regular speakers at our church. Love offerings often  taken for them.  Checks are written to church with speakers names on the envelops.  Checks are deposited to church bank account and church than issue checks to the speakers at the month end for the full love offering amounts.

Question #1: Can the donors receive contribution credit ?
Question #2: Does church need to issue 1099s for the full amount to speakers (amounts are over $600 annually)? Any exceptions ?
Question #3: Is this correct way of handling the love offerings from the stand point of IRS?  

We also have a church member who was a missionary, but, retired due to his health condition.  Love offerings are regularly taken for him even he does not perform any services.  Checks are made to church but with his name on the envelop. Church issues him a monthly check with the total love offering amount.  Does he get a 1099 from church or can this be consider as benevolence and no 1099 required ?

Thank you in advance for your time.

ANSWER: I am assuming that the regular speakers are not employees of your church (other than for their speaking).

As to charitable deductions, see IRS Publication 526 "Charitable
Donations"  which is available at:
on page 6 where the IRS lists as not deductible "Contributions to
individuals who are needy or worthy. This includes contributions to
a qualified organization if you indicate that your contribution is
for a specific person."

1.  No (see above for reasoning)

The Internal Revenue Code at section 102(a) provides that generally
gifts are not income.  "Gross income does not include the value of
property acquired by gift..."

However, section 102(c) of the Code has "Subsection (a) shall not exclude from gross income any amount transferred by or for an employer to, or for the benefit of, an employee...."

2.  It depends if the speakers are church insiders like officers or directors or employees.  If not then such gifts are not considered taxable income and are not required to be reported.

3. It is fine the way you are doing it, but see #2 above for a method you may want to adopt.

As to the former missionary, An IRS letter ruling 200013031 from the year 2000 indicates that
payments that are "in the nature of general welfare ...are not
includible in the recipients gross incomes" and concludes that a
1099 is not required for those type payments.
It is important to note that pursuant to 26 USC 6110(k)(3) such
items [private letter rulings] cannot be used or cited as

You are welcome.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    

---------- FOLLOW-UP ----------

QUESTION: Thank you for your quick response and appreciate your time.

Refer to your answer #2, speakers are full time preachers who do not receive monthly salary.  Therefore, the love offerings consider gifts and not taxable income and are not required to be reported.  Is this correct ?

Not sure if I understand your comments on answer #3... " But see #2 above for a method you may want to adopt".  What methods are you referring to ?  

Lastly, as to the former missionary, does church need any document to support the "in the nature of general welfare....."

Thank you again for your time.

Correct on #2. As for the other method, I had put that your congregation can give checks made to the names of the speakers and that would avoid any issues for the church, but I deleted it by mistake.

As for the missionary, Revenue Ruling 56-304 has:
--- Start of Excerpt ---
Organizations privately established and funded as charitable
foundations which are organized and actively operated to carry on
one or more of the purposes specified in section 501(c)(3) of the
Internal Revenue Code of 1954, and which otherwise meet the
requirements for exemption from Federal income tax are not
precluded from making distributions of their funds to individuals,
provided such distributions are made on a true charitable basis in
furtherance of the purposes for which they are organized.

However, organizations of this character which make such
distributions should maintain adequate records and case histories
to show the name and address of each recipient of aid; the amount
distributed to each; the purpose for which the aid was given; the
manner in which the recipient was selected and the relationship,
if any, between the recipient and (1) members, officers, or
trustees of the organization, (2) a grantor or substantial
contributor to the organization or a member of the family of
either, and (3) a corporation controlled by a grantor or
substantial contributor, in order that any or all distributions
made to individuals can be substantiated upon request by the
Internal Revenue Service.
---End of Excerpt---

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 possible 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. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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