Purpose of tithes and offerings

by Bishop

Is it true that the IRS does not allow churches to make monetary gifts to an individual from the tithes and offerings funds?

We had a guest minister who served our church for a period of 2 months without any type of remuneration. As he was going on vacation, we decided that we should bless him with a small donation. We were told by our "sponsor" church that what we did was illegal because the IRS does not allow tithes and offerings funds to be used as gifts. They said that we were supposed to collect a special offering from the congregants for that purpose. That sounds very weird to me because I don't understand why we can encourage our folks to give ( " so that there can be food at the storehouse" ) yet we cannot bless someone with what we receive.
Could you please shed some light over this matter?

God bless

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Comments for Purpose of tithes and offerings

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Aug 20, 2010
Taxability of a Gift
by: Vickey

That I know of there is no IRS regulations regarding what you can and cannot expend out of your general fund which is how the tithes and regular offerings are usually classified as.

The IRS does state...net earnings may not inure to the benefit of any private individual or shareholder.

However, I do not think that would apply here, so I am not sure what your ?sponsor? church was referring to.

You should be aware that your ?gift? to the visiting minister is most probably taxable income and you should send him a 1099-MISC at the appropriate time if the amount given to him was over $600 in a year?s time. At the very least you should have a W-9 filled out for him and on file and inform him of the taxability of the gift.

Aug 21, 2010
Taxability of Gifts for Services Rendered
by: Marcus in Texas

I agree with Vickey that if the "gift" was essentially compensation for services rendered over the 2 months, then if the amount for the year in which it was paid was $600 or more, then it constitutes taxable income and a form 1099 must be filed.

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