MUST HAVE REFERENCE GUIDE

Site Map or Site Search

CHURCH ACCOUNTING PACKAGE

Refuses to Provide SSN/Tax ID for 1099-M

by Church Girl
(Small Town, USA)

We have an evangelist that speaks at our church quite often. We issue him a check each time - a total of $1200.00 in 2012, but he refuses to provide me with his SSN/Tax ID. What should I do? I tried getting it last year too, but was not even acknowledged. He has been a long time friend of the "church family" and believes he is exempt from this law. His theory: "If he doesn't provide a number, the church can't issue him a 1099-M, and so he doesn't report these monies. PLEASE HELP!!!! He also collects money himself from the congregation. I was told that he doesn't have to pay on this money as it is considered a gift. Thank you so much for some clarity.

Comments for Refuses to Provide SSN/Tax ID for 1099-M

Click here to add your own comments

Jan 06, 2013
 1099-Misc
by: Barb

If someone is not willing to provide their SSN/Tax ID #, then I wouldn't invite him to come in the future. Obviously, he isn't concerned if your church gets audited. How can he expect his ministry to be blessed if he doesn't follow the laws of the land? Also, how can he be a blessing to others and encourage others to do the "right thing" if he is not?

If the church body/board still insists on having him come to minister, I would demand that the W-9 be filled out prior to his visit or prior to handing him a check. We have dealt with this issue before and no one gets a check unless the W-9 is filled out.

In the meantime, I would send him a letter (with the boards approval, of course) with a w-9 attached letting him know that he needs to fill out the w-9 before he will be asked to minister in the future. It's not worth losing your tax exempt status.
Jan 07, 2013
 getting SSN
by: Anonymous

This site may be helpful http://www.socialsecurity.gov/employer/ssnv.htm

however they actually do not have to give you their SSN see: http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/78/~/legal-requirements-to-provide-your-social-security-number

this site states to write "refused by contractor" in the ID box http://smallbusiness.chron.com/send-1099-ein-ss-exists-11355.html but I find no support of that on the IRS or Social security sites...

Prayers

Apr 11, 2013
 Taxable Income
by: Pastor's Wife

Although churches and individuals may intend for an amount of money to go to a speaker or minister as a "gift," but what matters is how the IRS sees those monies. Feel free to look up the issue online (on reputable sites, including irs.gov), using words like "clergy", "honoraria", "gift", and "offering". Or get a hold of a copy of Worth's Income Tax Guide for Ministers (I have the 2009 version, Evangel Publishing House), which handles the issue well.

Here is the gist of how the IRS sees it:

"Offerings and Fees -
If you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc., in addition to your salary. If the offering is made to the religious institution, it is not taxable to you." (From IRS Pub 517)

Worth's Guide (above) says this on page 16: "When an employer gives a bonus or "love gift" to an employee, it is simply additional salary and should be included in the W-2, Box 1." [If the Home Church gave the money.] "Honorariums or gifts that are received by the minister from individuals to whom he ministers or from whom he receives support are to be included on Schedule C." [Which is where a clergy member would include their self-employment income.] B.J. Worth goes on to describe two court cases where ministers had received three or four large special occasion offerings each year, not reported them, lost the cases, and were fined and charged back taxes.

On page 29 of Worth's Guide, Worth says that, "According to Sec. 102, gifts received directly from relatives and personal friends for personal reasons are not taxable income. When you have not performed a service and someone gives you a gift and it does not come from an employer, the gift can be considered non-taxable."

Honoraria/honorariums is a term that means a payment or gift given to a speaker. The IRS stated above that such amounts of money are deemed income.

Most clergy are considered dual-status, in that they are employees in certain ways, and self-employed in other ways. If the employing church (home church, most likely, or perhaps denomination) gives the money, it goes on a W-2 as income. If other individuals or churches give the money, keeping in mind the above discussion, it goes on the clergy member's Schedule C or C-EZ, as income. (See IRS Pub 517.)

This is not meant to be a comprehensive guide, but just a warning that we must pay the taxes we owe, and we must account for them properly. Christ Himself said to render to Caesar what is Caesar's, when asked about taxes. Where there are benefits allowed by law, we should by all means take them, but we must be very wary of going against the law simply because we don't like it. I believe the first response was a good one. If a minister of the gospel of Jesus Christ is acting contrary to Scripture (not paying certain taxes and putting other believers in an awkward position in regard to the law), then they should be approached according to Matthew 18.
Apr 18, 2013
 Pastor's Wife
by: Church Girl

Pastor's Wife: Thank you so much for taking the time to provide all that information. I really appreciate it, and agree with it as well. Trying to research anything regarding this particular subject can quickly become overwheming. I love how you gave precise pages, sections... referencing the information you provided. Again, thank you so much.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Clergy Tax Q&A.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)



Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.