New Changes to Church Tax Laws

There have been some changes in church tax law recently and I would like to make you aware of these changes.

Here are at least four items that you need to understand:

Cash Contributions

The old law stated that the church did not have to provide any contribution record to a donor unless that donor gave a donation of $250 or more at one time. Most of you are already providing a contribution record to any and all donors, but it is law now that you, as a church, must provide a contribution record to anybody that gives you a contribution, no matter its size.

Contributions of Non-Cash Gifts

The old law stated that when you, a church, received a non-cash gift valued at $5,000 or more and sold within two years the church had to file an 8282 with the Internal Revenue Service. This applied to all non-cash gifts except publicly traded stock. These are the changes based upon the new law: The value of the gift must exceed $10,000. The church must sell the non-cash gift within three years. The major change takes place when you fill out the 8282. There is a new section. You must describe how the proceeds where used and if they were used for an exempt purpose. You must remember that the donor must fill out an 8283 and must have a qualified representative of the church sign that form for it to be a legal donation. The donor must now also receive a qualified appraisal of these non-cash gifts.

Donation of Clothing and Other Household Items

The new law states that the items donated must be “in good used condition or better,” if not then it is illegal to offer the donor a contribution letter. Household items are defined as furniture, furnishings, electronics, appliances, linens, and other similar items. Items such as art, jewelry, food, paintings, and antiques are considered non-cash gifts (see above paragraph). Remember the church does not have to accept these donated items.

Displaying Workplace Posters

Recently you have received solicitations about workplace posters. Many of these solicitations tell you to buy their posters and you will be covered, then these posters cost you $150 or more. Please be aware that you can receive these posters from the Department of Labor for free. The companies soliciting your order do nothing more then go to the Department of Labor and get their posters and put them together in one neat poster and laminate it for your benefit. If you want that look then buy their poster, if not go to the Department of Labor and download them for free.