AboutJohn Stancil, CPA Expertise I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Society of Tax Professionals, and the Institute of Management Accountants.
Experience I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper.
Expert: John Stancil, CPA Date: 7/13/2008 Subject: Benevolence Gifts
Question Dear John. Thanks for all your past entries. I've just spent the past couple hours reading through them. I have a situation I'd like info on:
1. Church employee A has a $1,700 car repair bill. Other employees of the church and congregants give money to help him with his car repair. Am I correct in understanding that they CANNOT take that as tax deductible and the recipient must? Any difference if it's NOT an employee of the church?
2. Is there ever a point that an employee can be given assistance through church benevolence?
3. If someone gives a gift of $700 and verbally or in a separate instance requests the church to consider giving money of or near $700 to help someone in need, is that gray area or not? Can we take their verbal suggestion? Or is that still "designated" giving?
4. What IRS doc can I read that outlines this?
Thanks..
Answer Bryan,
Thanks for your question.
1. That is correct. The donor gets no charitable contribution deduction, the employee has income of $1,700 which should be reflected on his W-2. He would not have income if the individuals gave him the money directly. If he were not an employee, it would not be income to him. There would be a charitable contribution deduction unless the donors gave with the stipulation that the money be given to that specific individual.
2. No, anything given an employee is considered a part of the employee-employer relationship.
3. Money can ge given to a benevolence fund, but the donor cannot control the specific use of that money.
4. As this is a free forum, I cannot take the time to research specific IRS code sections and documentation. Frequently there are numerous sections of the law that are applicable, so I do not cite code in this forum. However, I would refer you to the Church and Clergy Tax Guide by Richard Hammar. An excellent resource.
