Thursday, December 4, 2008

ASK THE TAX PRO - A VERY INTERESTING QUESTION

Q. Can you cash a check from the collection plate in church?

A. That is not a tax question. But I know what you are getting at, you sly dog - and that is cheating!
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I remember reading many years ago of a church member who approached the pastor with a concern. It seems that the cash from the Sunday collection plate was placed in a safe in the church office overnight and not deposited until Monday. The member was concerned about leaving large sums of money in what was not a very sturdy safe overnight, as the church was not in the best of neighborhoods.
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The church member had a retail business and needed cash in all denominations for the register. He came up with an idea that would benefit both the church and himself (you bet it would benefit himself). Each Sunday after the service he would give the pastor a check for the bulk of the cash in the collection plate and take the cash for use in his retail store. The pastor thought this was a wonderful idea and took him up on it.
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Each week the member would write a check, payable to the church and not to “cash” (he told the pastor a check payable to the church could not be cashed by a thief, while one made out to “cash” could) for a nice round figure ($200.00 and never $203.75 - this was easier for his own bookkeeping he said) to cover the bulk of the cash in the plate.
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When it came time to prepare his taxes he claimed as a charitable contribution the sum of all the checks he had written to the church during the year, which included his normal pledge and holiday donations as well as the weekly checks he wrote to the church for the cash in the plate!
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I don’t remember how this person had been caught – only that his “scam” had indeed been uncovered by the IRS in audit.
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Needless to say this is pre-meditated tax fraud, and anyone who does this is subject to all the various and sundry criminal penalties and fines that go with tax fraud.
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I hope I have answered your question!

TTFN

2 comments:

Al said...

Is this why the IRS no longer allows checks over a certain amount to serve as proof of the donation and now requires a statement from the church?

Robert D Flach said...

Al-

This could be one reason for the $250.00 rule.

TWTP