Individual Taxation Essay

Submitted By reknes3
Words: 865
Pages: 4

I am representing a client of mine named Rev. Tex A. Voider, who has been audited by the IRS for not reporting money that the IRS believes are taxable income. The money that they believe should be taxed comes from two different places. The first is money that he receives from individual members of his congregation that they call “love offerings”. Pastor Tex receives the “love offerings” about twice a year that is giving to one of his deacons who then passes the money to the pastor once they are all collected. Pastor Tex keeps this money and does not report it on his taxes so the IRS does not receive any tax on that money. The second place he got money was from one of his members called Johnny B Goode. Johnny gave pastor Tex $1,000 cash after one of the sermons as a thank you for the pastors work. So, Pastor Tex never reported the donations and the one time money offering on his tax return. As Pastor Tex’s guy I believe that the “love offering” donations should not be reported on his tax return and the one time gift should not be reported on the tax return as well.

Some people may believe that the love offerings should be taxable however, I believe after reading my reasons with the supporting evidence I have prepared will make a strong statement as to why that money should not be taxable. First, Pastor Tex is a self-employed minister with a salary of $75,000 a year. In the Section 501 of the Internal Revenue Code it states that,

1) “(I) Self-employed.—A minister described in clause (i)(I) shall be treated as his or her own employer which is an organization described in section 501(c)(3) and which is exempt from tax under section 501(a).
“(II) Others.—A minister described in clause (i)(II) shall be treated as employed by an organization described in section 501(c)(3) and exempt from tax under section 501(a).
“(B) Special rules for applying section 403(b) to self-employed ministers.

With that statement it is proof enough that my client who is in fact a self-employed minister has the right under this law to be granted special rules. From my understanding of this statement my client should be aloud to not be taxed on his love offerings and also any other income he gets would not be taxable. In my eyes the money that pastor Tex is earning from love offerings is just a bonus or perk of the hard work he does. People are giving him tips for his services and the people that are giving him this money are doing it on their own. They are not required to give him anything at all and in fact do not have to even be apart of the congregation, they made those decisions on their own. I believe that this statement alone is enough to prove my clients right to keep his love offerings from being reported and taxed.

Next I would like to explain why I believe my client should be taxed on the gifts he receives as well. I have received cash gifts from family members for years now and I have never filed them on my…