Are tithes and offerings to the College and the Church tax deductible?
This is the time of the year when many of God's people are charged with income tax questions and problems. Perhaps the problem is not as complicated as it seems at first glance. The answers to some of the difficulties commonly found in the mind of the taxpaying member are here briefly explained. Tithes and offerings, amounting to 30% of the income, given to Ambassador College and the Church are tax deductible. They come under a special provision of the Internal Revenue laws which permits deductions of up to 20% of adjusted gross income for contributions to the Church. Another 10% to the College. Never more than 20% is, however, allowed as a deduction to a church. The average person does not give to his church amounts that even begin to approach a first tithe. This being true, God's people stand out in the group of taxpayers as generous givers to the Church. Their tax claims are quite often questioned and they are called upon to produce evidence of their Church support. The Radio Church of God does have a tax-exemption certificate from the Internal Revenue Commissioner, dated April 1946, No. 1492 M. The Church is exempted under the provisions of section 101 (6) of the Internal Revenue Code and corresponding provisions of prior revenue acts showing that we are organized and operate exclusively for religious purposes. Ambassador College has also been given tax-exemption status, which means all tithes and offerings given to the Church (but not more than 20%) and all donations given to the College can be submitted for tax deduction on the proper forms provided by the Internal Revenue Department. Those who are giving over 20% of adjusted gross income to the work of God should divide the tithes and offerings in part between the College and the Church. This has proven to be more acceptable with the government and in no way inconveniences either the Church or College. Therefore, for the sake of avoiding unnecessary red tape and inconvenience to members, regarding questioned amounts given in excess of 20%, the tithes and offerings should be recorded part in the name of the Church and part in the name of the College. If your tithes and offerings do not total over 18 or 19 percent of your adjusted gross income it would not be necessary to request separate receipts; the one from the Church will be sufficient. Next are second tithe deductions. In the course of preparing the tax return one question inevitably comes up for the Church member. That is, "How much of my second tithe can I legally claim for deduction?" Since the second tithe is saved and used by the member to attend the festivals, at which time it can be used for "whatsoever your soul desires" (Deut. 14:26), only that portion of second tithe remaining after the feast, that is given to the Church for distribution to others, may be deducted. The law states that before a tax deduction can be recognized, the deducted amount must be given to a recognized (by the government) charitable, nonprofit organization, Church or College. Therefore the excess second tithe given personally to a brother in the Church will not be recognized by the government unless it is recorded on the Church records and handled through the Church. The same is true of third tithes and offerings. For this reason receipts mast be requested of the Church when the offering is given. Many have asked about receipts after giving offerings at the various feasts. Since all the offerings are combined wherever the feasts are held, the Church records department has no possible way of knowing who gave a certain amount unless the donor's name is clearly written on an envelope showing his address and the amount given. Receipts are easily sent from Pasadena. Government regulations never permit receipts to be given months later, on the strength of the member's word, after the books are already recorded and balanced. Neither will the government recognize traveling expenses (second tithe) to and from Gladewater each year as valid expenditures. They see no reason why we want to go to Holy Convocations several times a year in the first place! The government looks upon such trips as pleasure trips — vacations. What about third tithe deductions? Third tithe given to the Church for distribution is tax deductible. Most of God's people will find that on their third tithe year their tithes and offerings will exceed 20%. If this is true in your third tithe year, BE SURE TO LET THE CHURCH KNOW YOU WISH RECEIPTS FROM THE COLLEGE and the Church. Ambassador College is as much a part of God's work as the Church itself. A percentage of all the income is channeled to the College automatically, because the College pays the cost of the publishing division. Ambassador College publishes the Gospel (Mark 13:10), as the Church preaches the Gospel (Mark 16:15). The Church is not permitted to give receipts on third tithes given privately to widows of Church members. If members have widows, fatherless, or other dependent members of the family to whom they are permitted (by God's law) to give third tithe, then they should give it to the local Church. The local Church records the amounts received and distributes to widows and others in the Church. Receipts for such contributions received by the Church for distribution to widows can be deducted. There are also other tax deductions. Here are a few examples of how the tax laws make it easier for Gods people who give tithes and offerings to the Church. Your tax savings can be greater if, instead of giving cash offerings to the Church, you sign over as offerings some kind of property like stocks, bonds, or real estate, which has gone up in value since being acquired. This way you receive a tax deduction for the fair market value of the property and you avoid having to pay the capital gains tax which would have been due if you had converted the property into cash. The Church, being a tax-exempt institution, can liquidate the property without having to pay a capital gains tax. If the property you want to give the Church is valued at more than 30% of your income, you can spread the gift over a period of two or more years by assigning to the College fractional interests-one-third, one-half, etc. — each year. Members who wish to deed property to the College or Church on this basis should seek expert guidance and counsel by a reputable lawyer, and have a will drawn up that states clearly what his wishes are. Contributions given to the Church or College for the progress of the building program, the construction of the tabernacle, etc., are likewise recognized by the government as deductible. A last word of advice: Adjusted gross income is the actual earnings of the individual before any deductions are taken out, such as social security, withholding tax, insurance plan. When the individual is self-employed, only the operational expense is deducted from the gross to arrive at the adjusted gross. Adjusted gross income differs from the taxable net income in that the government allows certain deductions for dependents, etc., that are not deducted for in tithing. In other words, you pay tithes on your adjusted gross income, but you pay taxes on your taxable net income.