Foreign Guest Speakers

By Raul Rivera

He preached a powerful message at revival services in McAllen, Texas. The church held a three-day revival capped off by a message on missions delivered by Reverend Danilo, the pastor of a church in Mexico. The church gave Reverend Danilo an honorarium of $1,000.00 to bless him as he went back to his homeland. 

A month later, the church treasurer learned that the church had broken the law in the way they gave Reverend Danilo the honorarium. They were supposed to withhold 30% of his honorarium and turn it over to the IRS.  

A very common problem

Every Sunday, churches across many states host a speaker that is not a U.S citizen.  In all of the years that I have been teaching compliance at our Ultimate Church Structure Conferences, I have discovered that nearly 100% of churches do not even know that there is a law in the books that governs honorariums paid to nonresident aliens. Below are the steps that the church in McAllen should have taken when giving Reverend Danilo an honorarium.

1. Make sure Reverend Danilo has a valid VISA to be in the U.S.
   
2. Make sure Reverend Danilo has an individual taxpayer identification number (ITIN) such as a social security number, or through applying for a number using form W-7.
   
3. Give Reverend Danilo IRS form 8233 and IRS publication 515 to see if he is a “resident of a treaty country.” Most churches are not aware that the United States has treaties with many countries exempting nonresident aliens from backup withholdings when earning honorarium income. In Reverend Danilo’s case, he could have filled out form 8233 and claimed an exemption from tax withholdings by claiming Treaty Article Citation 14. 
   
4. If Reverend Danilo was from a country with which the U.S. did not have a treaty, the church would have to give him form W-8BEN instead of form 8233. Reverend Danilo would have to fill out the W-8BEN and understand that the church would have to withhold 30% of the honorarium pursuant to section 1441.
   
5. After paying the honorarium to the guest speaker, the church must deposit the withheld money in a federal reserve bank using a form 8109-B, Federal Tax Deposit Coupon. 
   
6. At the end of the year the church must fill out IRS form 945 to report backup withholding it did on Pastor Danilo's honorariums. Form 945 is due by January 31 of the following calendar year. 

A miracle

There are things in life that we all consider either difficult or impossible, which we call miracles when they occur. The 6 steps I mentioned above seem to fall into that category. At StartCHURCH we conduct approximately 40 conferences per year. At each conference, we teach the steps to hosting a nonresident alien as the speaker and how to properly give him/her an honorarium. What I have discovered in my many conversations with pastors is that a large number of churches after hearing this teaching still struggle with compliance in this area.  The church in McAllen decided that they would not be hearers only, but also doers. They took the proper steps to correct the issue and came into compliance. That’s a miracle! Will you be a miracle-performing church?