Pastors paying taxes

We are a small church of about 30, our pastor gets 40 percent of what the tithes and offering is but he has refused to pay taxes for 12 years.

He calls it a love offering not pay.

Can he call it housing when we don't have a parsonage?

Worried about our church getting in trouble with IRS.

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Pastors paying taxes
by: Anonymous - Rochester, MN

Your Church it's board members and Pastor would be in serious trouble with the IRS if ever the Pastor would be audited for not paying taxes for 12 years.

Vickey has provided very good information and suggestions that should be taken seriously immediately.

by: Vickey

There is a lot in this post that concerns me.

Number 1: If you are going to pay your pastor a percentage of the church's offerings, there needs to be a cap on it...and that cap must be recorded in the minutes. Without a cap, any amount paid ...no matter how small would be considered private inurement and excessive benefit transactions which could threaten your church's tax exempt status. The IRS could also impose penalties on your pastor and church leaders.

See more on this page: https://www.freechurchaccounting.com/minister.html

Number 2: The church should issue him a W-2 and then it is his business whether he files is taxes or not.

Number 3: He can't call it anything! It is the church's responsibility to determine compensation and IF the church decides to designate part or all of his compensation as a housing allowance ... the church must do a resolution and include in minutes.

See more here: https://www.freechurchaccounting.com/housingallowance.html

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