(Screenshot: YouTube channel TruthBacker)
Recently, Living Word Christian Church in LaCrosse WI, gifted Pastor Mark Barclay a gold-plated AR-15 engraved with President Donald Trump’s words, “Fight! Fight! Fight!”
The gun given to Barclay may have cost between $1,330 to $1,700, according to the Black Rain Ordnance gun manufacturer website.
When American churches present gifts to pastors for their birthdays, during Pastor Appreciation Month (October) and when they retire, sometimes they are required to report these gifts as compensation.
(Screenshot: U.S. Code Title 26 Section 102)
Small gifts such as snacks and a T-shirt provided occasionally at work are considered de minimis, and not subject to taxation.
Meanwhile, gifts to non-employees are handled differently.
Some of the gifts to televangelists are very extravagant:
- Paula White gave T.D. Jakes a Bentley convertible.
- Oral Roberts gave fundraising consultant James Eugene Ewing an aircraft.
- Creflo Dollar attempted to raise $2 million for Kenneth Copeland to celebrate Copeland’s 40th ministry anniversary.
- Daystar Television Network’s only independent board member Tom Calendar gifted the network president Joni Lamb $100,000 for honeymoon, which she claims to have reimbursed.
The Danger of Tax Evasion
In 2011, the Senate Finance Committee published a 61-page report identifying financial loopholes exploited by religious organizations. One of the loopholes was pastors receiving “love offerings” rather than a salary so that their compensation was not taxed.
There also appears to be widespread confusion in the church world regarding speaking honorariums. They are often treated as gifts when they are compensation, and the recipient should be given a Form 1099 for tax purposes.
Televangelist Todd Coontz and Gregory L. Clarke, pastor of New Hope Baptist Church in Birmingham, Alabama, both served jail time for tax evasion as a result of treating speaking honorariums as gifts rather than taxable income.
However, the courts are not always consistent. An indictment of the late televangelist Morris Cerullo was dismissed because a prosecutor failed to give the grand jury complete information.
Tax Notes reported, “During the prosecutor’s presentation, the grand jury asked at least three times about how to differentiate between earned income and gifts. Each time the prosecutor answered without mentioning the most critical factor: the donor’s intent.”
Reporting Requirements
For 2025, the gift tax exclusion is $19,000. With a couple exceptions, gifts exceeding this amount are taxable and require the donor to complete the IRS Form 709 and pay the gift tax.
Not subject to taxation are gifts to spouses and gifts to pay for school tuition or medical expenses.
While churches, synagogues and mosques are not required to report gift expenses to the Internal Revenue Service on a Form 990, other religious non-profits such as Christian colleges do include them in the 990 Statement of Expenses Page.
For the fiscal year ending June 30, 2023, Liberty University provided $341 million in grants and scholarships to its American students.
The IRS website features a Frequently Asked Questions page for gift taxes and the IRS Publication 559 provides more in-depth information about gift taxes for accountants and bookkeepers.
* This article features a correction. It originally incorrectly reported that Living Word Church in Midland, Michigan, gifted Pastor Mark Barclay a gold-plated AR-15. Instead, Living Word Christian Church in LaCrosse, Wisconsin, was responsible for the gun gift.
