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Clergy Tax Clergy Tax Facts  

Clergy Love Gifts

Are "love offerings" to clergy always taxable income?

This question has puzzled churches for decades and made recent headlines in the tax-evasion conviction of a pastor and his wife in Charlotte, North Carolina.

The co-pastors indicated they were confused about whether money from speaking fees, pastor’s anniversary collections, and other “love offerings” congregants gave them were taxable income. But the IRS argued that the couple had failed to report more than $2.3 million in taxable income from 2002 to 2007.

Churches and pastors have always struggled with questions about love offerings. However, there's no confusion about the tax statutes that apply. It's almost impossible for love gifts from the church to be non-taxable.

If the gift is spontaneous in nature and motivated out of affection of an individual for another individual, it would be non-taxable income. But if it can be construed as payment for services rendered, it's taxable. The church gift being made in the employment context is almost impossible to isolate that from services rendered.

Gifts from individual can be considered non-taxable if it is motivated by "love and affection." In order to be certain that such payments will be tax-free, all the conditions below must be met. Gifts received from the church are generally considered taxable income, i.e. Christmas or holiday bonus, compensation incentives, fee for performing weddings, funerals, and baptisms, etc.

  • love offerings cannot be solicited
  • are not conditioned on further services
  • must be spontaneous in nature
  • must be clearly ascertainable as a gift with no service attached
  • cannot qualify as a tax deduction for the donor
  • are motivated out of affection of an individual for another individual

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Clergy should not view this information as a substitute for professional advice. This information is subject to change, due to administrative rulings or interpretations and or technical corrections by the IRS. If legal advice or other expert assistance is required, the services of a competent clergy tax professional person should be sought.