An Overview of Tax Issues for Religious Congregations

Abstract

This article discusses the tax issues that, in the author’s many years of giving pro bono advice to religious congregations, most experience often arise - or should arise. They are: (a) requirements for setting compensation; (b) lobbying and political activities; (c) substantiation of charitable contributions, (d) charitable fundraising, (e) payroll taxes and withholding for clergy, (f) parsonage and housing allowances, and (g) discretionary funds. While the discussion of applicable rules is designed to be accessible to lay leaders and congregational staff, whether volunteer or professional, it also includes citation to applicable provisions of Internal Revenue Code as well as other tax authorities that may be useful to tax professionals. Different groups of leaders and volunteers have interest in different topics; each topic is designed to stand alone, and thus there is some overlap in coverage.