Providing Things Honest in the Sight of all Men: Confidential Tax Receipts

This continues a series of articles on issues that relate to the financial and legal aspects of an assembly .

Down through the years, the Internal Revenue Service has required various Christians, when audited, to provide receipts to substantiate deductions claimed for money given to the Lord through assembly offerings. When an assembly had no system for providing tax receipts, the government often denied legitimate deductions for lack of proof, and required some Christians to pay substantial sums of money in additional Federal Income Taxes. A system can be set up for providing receipts to any Christians who desire them. The system should be voluntary and completely confidential, so that no one can know what any other Christian gives to the Lord.

The IRS published a regulation that as of January 1, 1994, tax payers must be able to substantiate itemized deductions for religious or charitable donations of $250 or more by a receipt from a recognized church or 501 (c)(3) nonprofit organization (such as, Truth and Tidings Gospel Trust, USA). Recognition by the IRS of an assembly as a legal entity can only be guaranteed by obtaining a 501 (c)(3) Ecclesiastical Corporation status from the state and the IRS. The IRS is also now requiring that there should be what is termed a paper trail to verify that the amount on the annual receipt equals the sum of the weekly contributions.

How a Confidential System Functions

A brother in the assembly who would not be involved in counting the assembly offerings should be given the responsibility of assigning a confidential number to each Christian (or couple) in the assembly who desires an annual tax receipt. The number could be the last four digits of the individual’s Social Security number. He would also provide a supply of contribution slips and small envelopes (see sample at the bottom of the page)*. Each Lord’s day a slip would be filled out by the individual and included with the offering in a small envelope, leaving it unsealed, and deposit it in the basket or box as it is passed around. The Acct. section can be added to the slip for optional use if, for example, a person were absent on a Sunday when a special offering was taken, such as a Building Fund offering, and he or she wanted to designate a contribution to it the following Sunday.

When the brethren count the offering, they would record the amount contained in each envelope under the appropriate confidential number and one brother initial the slip for verification of the amount. The brother, who is the only one who has a record of both names and numbers, should not be involved in counting or recording the offerings enclosed in the envelopes. The used envelopes can be accumulated in a box kept in a convenient place for reuse by the members of the assembly. Each week the treasurer would file the slips under each confidential number.

At the end of the calendar year, the treasurer would prepare a receipt under the assembly letterhead for each person, showing: (1) the total amount accumulated during the calendar year, (2) the date and amount of any single gift of $250 or more (such as for a special offering) and (3) the confidential number, but the place for the name of each donor would be left blank.

The IRS now requires that a statement be included that “The donor received no benefit in return for this contribution.” The receipts should be signed by the treasurer and by at least one other brother who verifies the accounting. Each receipt should be sealed in an envelope, the confidential number written on the outside, and the sealed envelopes given to the brother who has the list of the names and confidential numbers for distribution. Each person then would add his or her name(s) and Social Security Number(s) to the receipt in the privacy of his home. The files of the weekly contribution slips must be retained for seven years in case the assembly or any member should be audited by the IRS.

This system has been used successfully in many assemblies for a number of years, without violating the Scriptural principle of confidential giving, and the tax receipts have been acceptable to the IRS.

* Sample of the weekly receipt to be used in a typical assembly: (A local printing service can prepare small receipt pads.)

The Name of the Assembly
EIN*__ Verification __
(EIN=Employer Identification Number which is received upon approval as an Ecclesiastical nonprofit 501(c)(3) Corporation.
Date /__/
Conf. No. _____
Acct. Amount _______