Gauge Continuing Education
Q. What is deductible under gifts to charity rules, if anything, for case described below?? Taxpayer's wife is training to become a Conference Lay Minister of California Conference of Methodist Church. Candidacy for CLAYM is sponsored by local church by vote of staff-parish relations committee and full membership voting in "charge conference." After completing training, she will be certified as Lay Minister and Lay Speaker. She will be empowered to handle almost all church duties, including marrying and burying. She could be assigned to rural church without a paid minister or to local church duties as associate to paid minister. There is no pay. If assigned to a rural church, she would receive either parsonage or housing allowance (value of which might be considered Social Security income as with ordained ministers). Current expenses include fees for classes, required text books, overnight hotel, transportation to conference headquarters and other locations for classes, meals away from home. Eventually she must buy a ministerial robe, which would be considered "uniform", not everyday wear. She will also incur typical continuing "ministerial" expenses --books, continuing education, conferences, etc.All of her activities directly benefit the church.
A. Can she deduct her education expenses? Education expenses for a new career are NOT deductible. If she already was employed as a minister and to keep or improve in her line of work she needed more education, then it would be deductible, but that doesn't seem to fit your fact pattern. Can a donor deduct contributions to a bonafide charity for its use. The answer is a qualified yes. And one where you have to gauge the IRS' unwillingness to venture into church matters. If you are asking is the families direct payments of the wife's expenses a deductible contribution--No. But if you are asking if the family payments to the church's scholarship fund or something like that (In my church they have some very specific envelopes in which one may"advise" ones contributions) are deductible then the answer is yes. It gets to be very grey when the recipient of the charity turns out to be related and I would think its even greyer if the family turns out to be the only ones making the contribution, sure would be nice if the effort is funded out of a more general pot-and or there are other such recipients-but again I doubt the IRS will be looking under that pot lid absent overwhelming proof of abuses? A contribution to the Mary Smith Scholarship Fund by members of Mary's direct family is quite different than the Hillside Methodist Lay Ministery Fund contributions. In my opinion the Courts handed the IRS a stunning defeat for common sense wherein one church effectively requires parents to pay for the world mission of their own children and then write it off as a charity deduction. And I have had personal involvement with the IRS refusing to pursue what I clearly felt were areas of abuse by a charity because that was a thought a practice of a major church as well. I personally think it would be an unwise move for a person to contribute to her own charity and shoud avoid "directing" contributions of her family to herself. Advising contributions is a horse of a different color. I doubt the IRS wants more defeats in this area? You may have to examine your conscience as to how to best treat this area and how to structure the facts
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