Content by Rev. Paul Johnson, CCA
This is a series of articles about real world problems that churches often find difficult to handle. They are presented in the form of emails for ease of conversation but can come in many different ways. Disclaimer: All the names are made up and in no way identify actual people nor does the author assume responsibility for the opinion expressed in the response.
This may not be the exact email that you receive but it is the time of year when churches need to be reminding givers what the rules for accepting tax deductible gifts are and what the church policy is about them.
The good news is that you do not have to be the “bad person” here. The IRS has very clear rules and GAAP (Generally Accepted Accounting Principles) also are very clear in year- end situations.
My recommendation is that you give members these links and suggest that they consult with their accountant if they disagree. Basically the rules show that mailed checks must be postmarked Dec 31 to be counted and credit card or stock transactions must be completed before Dec 31. A credit card does not have to be paid but the transaction must happen in the year that the donor seeks a tax deduction.
In the specific case cited above the response is that the church does not “cheat”, it is illegal and the church would lose its tax exempt status and face fines if caught.
All in all it’s best to publish the churches rules and procedures for receiving year-end tax deductible gifts early in December and repeat near the year end. Be sure your message includes holiday office hours and all the details that relate to last minute giving. The most important thing is to be consistent and have a NO EXCEPTIONS policy.
You will have a much Happier New Year if you warn folks in advance.
LINK: https://www.irs.gov/uac/Six-IRS-Tips-for-Year-End-Gifts-to-Charity – This is the IRS link for 2014 (the 2015 link is not out as yet) but the rules pretty stable.
LINK: http://www.fasb.org/resources/ccurl/770/425/fas116.pdf – This is the link for the FAS for accountants.