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Lost Tithe Records - The Must Know Plan to Recovery
By Raul Rivera
It happens every year. Churches of all sizes and backgrounds lose their tithe and offering records. The most common way this happens is through a church computer hard drive crash. No matter how many times we hear that consistently backing up records is the best practice, how many actually do it? There are many free online back up services, and using them is just a few clicks of a mouse away. Regardless of the reasons why churches lose their tithe and offering records, it is a problem for those who count on their contribution statements and receipts to deduct them on their tax returns. Let me give you five quick steps to take to help alleviate a potentially frustrating situation between the church and its givers.
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Notify: Make the church membership aware of the loss through whatever means you normally use. It may not be the best idea to publish it on your website. That may be too public a forum and easily misinterpreted.
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Educate: Ask every taxpayer that gave any contribution greater that $250.00 to hold off on sending their tax return until the receipts have been reconstructed. Section 170 requires for the taxpayer to have in his/her possession the actual qualifying receipts from the church before he/she can file a tax return and claim the deduction.
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Empower: Anyone whose individual contributions to the church were all under $250.00, can use his/her cancelled checks to calculate his/her deduction, and then at a time of his/her choosing, follow step five below.
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Locate: Many churches save their tithe and offering envelopes and/or count sheets. If you are able to locate them, you can use those to reenter into the church record keeping software all of the information that was lost. .
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Recreate: The law provides that a church can use "reasonable means" to recreate its givings and receiving records. The taxpayer can present the cancelled checks to the church and based on that, the church can issue separate tax-deductible receipts for contributions in excess of $250.00 and contribution statements for contributions below $250.00.
Is the church required by law to issue contribution statements?
Contrary to public opinion, there is no section of the law that requires the church to issue any receipts to its givers. However, the law does require taxpayers to prove they made those contributions. Therefore, those who give in cash will not be able to write off their contributions; nor will those who give individual contributions either.
To be clear with you, there is no provision in the law that requires the church to issue any receipts, but those who give may lose confidence in the church's ability to steward records, and they may interpret the stewardship void as having far more meaning than just not getting a receipt.
What some people think
Now, it is time to talk pastor-to-pastor. The tendency to wander is part of what sheep do (Isa. 53-6, Ps. 119:176). That tendency is encouraged when the sheep perceive, whether rightly or not, that the church's records are inadequate or being poorly kept. This is not mentioned to declare whether the sheep are right or wrong, but rather as a way of mentioning facts that I have discovered based on experience. Hopefully, this will help to prevent an issue like this from happening.
The best way to avoid trouble is to be prepared in case it shows up. Backing up your church computer to an offsite location and saving the church envelopes will keep a potential trouble away.