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: Integrated Auxiliaries
Question I greatly appreciate your feedback on previous questions!! We are in the process of writing our church's 1st financial policy manual and I've had to come up to speed real quick.
One area of confusion is designated contributions to and fundraisers for an integrated auxiliary (the Ladies Auxiliary). Basically, how autonomous is the auxiliary allowed to be and still the tax deductible nature of donations?
1. Can it receive designated funds from church members and operate "off the church's accounting books" and not part of the church's annually approved budget?
2. Separate bank accounts with different signators?
3. Can it spend money for the church? (e.g. decorating, or other "non-budgeted" expenses?
4. May it issue scholarships to individuals?
5. May it issue gifts (cash or otherwise < $250) to encourage ladies (not requested by the recipient)
It seems that these integrated auxiliaries could expose many loopholes if they are not operated under a consolidated banking and accounting/budgeting system which is church wide.
Thank you for your advice! Do you know I could search for a "face-to-face" legal advisor who could sit down with our financial steering committee and ministry leaders to insure we have complete transparency and best practices?
Answer Kenneth,
Thanks for your question.
From a tax standpoint:
1. Yes.
2. Not required.
3. Yes.
4. Yes.
5. Yes.
However, there is nothing to prevent the church from setting policies along this line as to what is and is not permissible. In all 5 questions the key is that they "may" do those things. It is OK to prohibit them otherwise regulate them.
