gift to unpaid pastor

by Silas Fowler

Our church is a free church and as such is not registered as a 501(c)(3) although we meet the qualifications and our members are allowed to take a deduction for their donations under the mandatory exception rule under 508(c)(1)(a).

Furthermore, we are structured as a brotherhood where the authority lies with the congregation and not a pastor. We have four elders who handle all do the teaching on a volunteer basis. They receive no compensation from the church. Their only source of income are in the secular workforce.

If we as a body decide to give the elders a one time gift of groceries totaling $500 each (total of $2000) as an expression of gratitude is this taxable for either party? These four elders served faithfully teaching, counseling, performing weddings and funerals for ten years without ever asking for compensation. We want to do something but don't want it to result in a bigger burden for them.

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