June 27, 2016

Special Offerings for Guest Speakers

Question:

When a church solicits special offerings for visiting guest speakers is the income taxable to the guest speakers, and are the contributions tax deductible by the donors?
      
Answer:

According to IRS Minister Audit Technique Guide, “Contributions made to or for the support of individual missionaries to further the objectives of their missions are includible in gross income (Rev. Rul. 68-67, 1968-1 C.B. 38)” (p. 6 of PDF). The offerings solicited for visiting guest speakers represent compensation for the services rendered. The offering income is taxable to the recipients. The guest speakers may be able reduce this income by business related expenses, but the offering must originally be included as income.

Although the income is taxable that does not automatically indicate that the offering will cause a tax deduction for the donors. The deductibility lies in the control of the monies and purpose of the organization. According to Richard R. Hammar in his book 2015 Church and Clergy Tax Guide, “Contributions to a church or missions agency for the benefit of a particular missionary may be tax deductible [by donors] if the church or missions agency exercises full administrative and accounting control over the contributions and ensures that they are spent in furtherance of the church’s mission” (p. 384-385).  Because the special offering is an act of the organization as a whole, the deduction can be afforded to the donor. 

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