Christmas and Birthday Gifts to Missionaries

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Question:

A church's missions committee wishes to give Christmas and birthday gifts to its missionaries. Are these gifts taxable to the missionaries? Will the church be required to file Form 1099-MISC? Is there a way to give a missionary a non-taxable gift?
Answer:
Generally, all gifts to missionaries are consider taxable as compensation. However, the church will not have to issue a Form 1099-MISC to individual missionaries for gifts sent to and managed by the missionaries' mission agencies. These agencies are responsible to issue an appropriate report of income (either Form 1099-MISC or Form W-2). Further, mission support sent directly to missionaries (not through an agency) are subject to government reporting unless they total less than $600 per year.
 There is one way that gifts can be given to a missionary without being taxable to the missionary. Gifts given by anindividual to an individual are neither deductible by the donor, nor taxable tothe donee. If a member on his or her own volition sends money to a missionary rather than responding to a church-sponsored collection, it will be non-taxable gift to the missionary and non-deductible by the donor. As soon as the church sponsors the collection as acorporate activity it becomes compensation to the missionary anda deductible charitable contribution to the members.
For further discussion and IRS documentation please type “Missionary" and"gifts” in the search window. We believe you will find a number of relevant blog posts.