Guest / Limited Access /

Are "love offerings" to preachers always taxable income?

That question, which has bedeviled churches for decades, made headlines once again in the May tax-evasion conviction of Charlotte, North Carolina, pastor Anthony Jinwright and his wife, Harriet.

The co-pastors of Greater Salem City of God said they'd been confused about whether money from speaking fees and anniversary collections was taxable. But the IRS and federal prosecutors argued that the couple had received so many warnings that their failure to report more than $2.3 million in taxable income from 2002 to 2007 was clearly willful.

Financial consultant Robert Howze issued some of those warnings. He said other congregations around the country are struggling with questions about love offerings.

"It's not much talked about," he said, "but the confusion is there."

Richard Hammar, editor of Church Law & Tax Report, agrees.

"There's confusion in the minds of a lot of pastors," he said, "but there's no confusion about the tax statutes that apply …. It's almost impossible for love gifts from the church to be non-taxable."

If the gift is given out of a "detached and disinterested generosity"—dollars handed to a homeless man, for instance—it would be non-taxable income, he said. But if it can be construed as payment for services rendered, it's taxable.

Hammar, an attorney and CPA, said congregants often get confused because they give such offerings simply "to bless the pastor." So why, they ask, should the IRS be involved?

"The problem is, the gift is being made in the employment context," he said. In such context, "it's almost impossible to isolate that from services rendered."

Related Elsewhere:

Previous Christianity Today articles on taxes include:

More Giving, ...
Subscriber access only You have reached the end of this Article Preview

To continue reading, subscribe now. Subscribers have full digital access.

Read These NextSee Our Latest
RecommendedHow to Help Those in Need (Without Treating Them Like Beggars)
How to Help Those in Need (Without Treating Them Like Beggars)
Robert Lupton shares strategies to lift people out of poverty for the long haul.
TrendingThe Colonists’ New Religious Mystery
The Colonists’ New Religious Mystery
Sorry, Pilgrims: Jamestown’s spiritual life is suddenly much more fascinating.
Editor's PickGood Behavior Matters After All
Good Behavior Matters After All
How I discovered God's plan to reach a lost and sinful world.
Christianity Today
Mixed Blessings
hide thisJuly July

In the Magazine

July 2010

To continue reading, subscribe now for full print and digital access.