Expert: John Stancil, CPA - 1/15/2005

Question
Are there any IRS stipulations as to what a church can give money to an individual for? Can the money be given directly to the individual by the church? I understand that it can not be a designated gift from one individual to another. I am a former treasurer. I went to a Michael Chitwood Seminar in 1996 where we were told that it is only legal for the church to pay for a persons medical expenses, utilities, purchase food or clothing, and pay their rent or mortgage. I have been trying to locate any information as to wheather this is an IRS regulation. Any light that you can shine on this matter would be greatly appreciated.

Answer
Barbara,

Thanks for your question.

I am not aware of any specific regulation as such.  However, there is an overarching principal involved.  The church should not give money to an individual if giving that money is outside the exempt purpose of the organization.  

In other words, giving me money to help meet my basic needs (as you mentioned) would be a part of the charitable/humanitarian purpose of the church. Giving me money to take a crusie (for example) is not really associated with the exempt purpose of the church and could get the church into difficulty with the IRS.  Obviously, payment to employees, contractors, etc. for services rendered fall under the acceptable arena as the employees, etc. are functioning in a manner to further the mission and exempt purpose of the church.

Hope this helps.

John Stancil, CPA