Frequently asked questions by churches
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Patterson Financial Services, Inc.
"Empowering Your Vision Through Fiscal Management & Accountability" ™
Question: Are contribution reports to members
Answer: Yes. Most charitable organizations are
required to inform donors through written statements
that quid pro quo contributions in excess of $75 are
deductible only to the extent that the contributions
exceed the value of goods or services provided by the
organization. Also, they must provide the donor with a
good faith estimate of the value of those goods and
services (Code Sec.6115) Penalties of $10 per
contribution (with a maximum penalty of $5,000) will be
imposed upon charities that do not make proper
disclosures, absent reasonable cause (Code Sec. 6714).
In addition, charitable contributions of $250 or more,
made on or after January 1, 1994, must be substantiated
by a contemporaneous written acknowledgement from
the donee organization.
Question: Can the government ever examine the
Answer: Yes. Because of the need for the IRS to combat
efforts on the part of some individuals and organizations
to utilize a church form of organizations to avoid taxes,
and the equally important need to protect legitimate
churches from undue IRS interference in their activities,
the Code contains detailed rules governing the
circumstances under which the IRS may inquire into or
examine churches (Code Sec. 7611 Reg 301.7611-1 Reg