You don’t read so well, huh? Taxguy said the whole thing was shady already, but explained that it was not a government conspiracy but rather people cheating the Tax code.
Pretty interesting. As I stated above, the standard for deducting a charitable contribution is that the contribution must be given with no expectation of receiving anything in return.
However, people that give money to churches probably do intend to receive something in return inasmuch as (1) they believe that they would not be keeping with their church’s doctrine if they did not give (so they receive the knowledge and comfort of abiding by their church’s rules), (2) some churches and individuals may even feel more directly that you won’t go to heaven (or achieve nirvana, reincarnate, etc.) if you don’t give to the church, and/or (3) it just makes the person happy to give.
As an atheist, I’d say that the the person that buys an induldgence received nothing in return, so they should be able to deduct it. The person that bought it, however, didn’t do so out of a detached and disenterested generosity; they expected to get to go to heaven when they die. So, it depends on whether the test is objective or subjective. I’d imagine that in reality it’s objective because the three reasons I outlined above would kill all charitable contribution deductions to churches if the test was rigorously subjective.
Here’s another aspect of your hypo: if you go to a church bake sale and buy one chocolate chip cookie for $100, then assuming that the actual value of the cookie was $1.00, you can deduct $99 as a charitable contribution. Well, assume that a taxpayer buys an indulgence for $1000 and the IRS disallows a charitable contribution deduction because the taxpayer got a benefit in return for the payment. Maybe the taxpayer could argue that the real value of avoiding burning in hell forever is only about $250, so $750 should still be deductible. Now some poor judge has to figure out the value of avoiding hell.
Ain’t tax fun?
Yeah, that’s one of the clique’s big “in-jokes.” You can only understand it if you have more than five thousand posts, or have ever seen an episode of I Love Lucy. It’s very exclusive that way.
I think it’s been reviewed all right. It’s becoming pretty common around here (although the church I attend does not do this). The church is not allowed to require the parents to pay the tuition amount, as in, they can’t say hey Mr. Smith, we paid $4,000 for your kid to go to school and we see you only reimbursed us half, you owe us $2,000 more, so pay up. What happens is, the church pays for all members’ children to attend xyz schools in the area (usually any Christian school). The members are now on their own honor to reimburse the church for at least the amount their child or children used up (in addition to any other tithes or contributions they may give). Other members without children in school also frequently contribute.
I have also seen churches try this and end up giving it up because people don’t pay their fair share. Since the church can’t make them pay, some people don’t bother to make the full payments - the church ends up losing money. Thus a whole other issue is raised: now Christians are screwing their churches for their child’s Christian education tuition payment?
Churches would frequently help out parents who are struggling to come up with tuition money and who showed legitimate need and I think the idea grew from there. People who contributed to the general education fund that benefitted these children got to write off their contributions, so they looked into a way to make it possible for everyone. The church I grew up in is currently in its first year of trying this out. They place a very high priority on Christian education (as do many churches in the area) and most students who attend these private schools come from far less than wealthy families. When one student’s tuition costs $4000 per year, this is a real hardship for many and they were looking for a way to help make it more affordable. (I am not defending this practice, I had questions about the ethics of it myself when I first heard of it. I am not condemning it either.) As far as I know, it is legal, however.
Still Tax Fraud. I will defer nto Taxguy to explaine it.
Yeah, Velma, I don’t know. I can see it both ways on this issue.
Even though the parents aren’t requiredt o give the amount of their kid’s education, they are certainly expected to, and most probably do give more to the church than they would if the church didn’t pay for their kid’s school, meaning that some part of their contribution is a direct reimbursement.
This idea could be taken to the extreme: my church could agree to be obligated on my mortgage and my car note, and my church could buy the food I eat and clothes I wear, and I could give to my church out of the goodness of my heart for doing this for me. It just so happens that the amount I give to my church equals the amount I would give to the church if they didn’t do this stuff plus the cost of doing this stuff.
Hey, if I start worshipping Paypal (hehe, sounds like papal–gotta be a Pope joke here somewhere), can I deduct all the stuff I buy on eBay?
It’s not fraud at all if it’s legal. I know at least this particular church that I speak of is very careful and concerned about staying legit with this type of stuff. Whether or not you think it is moral may be up for debate, but that is different. People and companies get tax write offs all the time for things that may or may not seem fair, but the government allows it.
TaxGuy, I understand what you mean, I wonder the same things myself. Regarding the mortgage issue, the church does pay those things for the pastor, and part of the general fund is used to pay that. The pastor contributes to that general fund, I wonder if he can deduct his full amount? I guess a lot of contributions that go to things like church events or clubs and building funds could be viewed as expecting a direct payoff.
It is niether a moral issue for me nor is it legal. If a tax exempt organization allows you to enroll you child into an educational program with the understanding [wink,wink] that you will donate a comensurate amount of money in lieu of paying tuition thereby allowing you to claim a charitable deduction, that is definately tax fraud and probably a conspiracy as well as a violation of the federal RICO statute.
You keep saying it is illegal, but the accountants and tax experts that helped set it up say otherwise. Believe me, it’s not like these churches are just going with a hope and a prayer that they won’t get caught doing this - they fully disclose the arrangement to anyone who asks. Until you can prove that it is illegal, and not just speculate and say it sounds like it is, I’ll go with their opinion. Not than I am participating. If it is a legal set up that the IRS is aware of it is not tax fraud, unless you are defining fraud differently than I am. There are plenty of ways people and businesses get around taxes that may sound questionable, but are not fraud and will stand up if audited.
Anyway, I didn’t mean for this thread to become about this, and it’s been hijacked enough. Maybe it should be a question in GQ or a topic in GD.
Unfortunately, that’s the least of what those psychos can do. Just ask Lisa McPhereson. Wait, you can’t ask her anything anymore - she’s dead. Why, you ask? http://www.lisamcpherson.org/
The only thing needed for evil to triumph is for good men to do nothing.
Somehow the words “church” and “legit” don’t play well together. They’re all scams, no matter how well-meaning some of them may be.
An all-powerful god doesn’t need donations and contributions and priests and popes and suicide bombers to get his point across. Therefore he must not exist…
Stainless.