Category: Internal Revenue Service

Churches sending acknowledgement letters to their donors should remember the following substantiation requirements held by the IRS. Please reference IRS Publication 1771 for more information on record keeping rules and what to include in written acknowledgement to donors. This is a very helpful tax resource for churches and individuals alike.

Written acknowledgments must include:

• Name of organization
• Amount of cash contribution
• Statement that no goods or services were provided by the organization in return for the contribution, if that was the case
• Description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution
• Statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case

Written acknowledgements must be received by the donor by the earlier of the date they file their return, or the due date of the return.

The standard mileage rate for transportation or travel expenses is 56.5 cents per mile for all miles of business use (business standard mileage rate). See section 4 of Rev. Proc. 2010-51.
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170. See section 5 of Rev. Proc. 2010-51.
The standard mileage rate is 24 cents per mile for use of an automobile (1) for medical care described in § 213, or (2) as part of a move for which the expenses are deductible under § 217. See section 5 of Rev. Proc. 2010-51.

The IRS is presenting a free webinar for churches and religious organizations on Wednesday, July 25th at 2:00 pm Eastern time. Attend this webinar to learn:

• When it comes to taxes, what is a “church?”
• What is a “religious organization?”
• How do you apply for tax exempt status?
• How to stay exempt: do’s and dont’s
• Special rules for compensation of ministers
• Recordkeeping and filing
• Rules limiting IRS audit of a church
• And much more

With the focus on political elections, churches are reminded that organizations exempt from income tax under the Internal Revenue Code section 501(c)(3) may not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. The Internal Revenue Service has issued Revenue Ruling 2007-41 to provide guidance on situations that may or may not be considered to fall under these guidelines. If your church has involvement in election matters or activities, you are encouraged to read the situations listed in the Revenue Ruling to make sure your involvement is not in violation of the guidelines. The Revenue Ruling can be found on the IRS website at http://www.irs.gov/pub/irs-drop/rr-07-41.pdf.