New IRS Rules Demand Receipts
for Church Donations
he next time you toss bills into the church collection plate, you might want to ask the usher for a receipt. New federal rules for the 2007 tax year--which took effect January 1--forbid tax deductions for charitable donations unless the taxpayer can prove the donation through receipts or other official financial records.
The rules, enforced by the Internal Revenue Service, require that people claiming charitable donations back up those deduction claims with canceled checks; records from banks, credit card companies, or credit unions; or written notices from the charity or not-for-profit institution.
In the past, the IRS has allowed personal notes, diaries, or bank registers as sufficient proof that you actually placed those $5, $10 or $20 bills in the basket each week of the year. Congress approved the new guidelines in August, as an add-on to the Pension Protection Act of 2006, which deals mostly with pension and retirement savings. President Bush signed them into law. The new rules cover monetary donations to any charitable institution, not just religious ones.
The changes shouldn't affect the giving habits of people who already donate in church-provided envelopes, with checks, or over the Internet. They can still receive records from the church, bank, or credit card company, and present them to their accountant.
Still, a lot of money is given anonymously. At St. Genevieve's Catholic Church in Elizabeth, N.J., for example, nearly 20 percent of the $7,000 collected each week is cash that the church cannot connect to anybody, said the Rev. George Gillen, the church's pastor.
The Islamic Center of Passaic County, one of New Jersey's largest mosques, has not alerted members to the change, though it is less likely to feel a pinch. Less than 5 percent of its donations are anonymous, said Mazooz Sehwail, the mosque's office manager.
Cash donors who throw their bills unfettered into collection plates must change their habits if they want to claim deductions, said Todd Polyniak, a partner in Sax Macy Fromm & Co., a business accounting and consulting firm in Clifton, New Jersey. "They're making it much more difficult for you to say you gave money you truly didn't give, even if it's small dollar amounts," he said.
In the end, Polyniak said, some not-for-profit organizations will bear the burden of the new rules, because offering receipts for every cash donation would strain their resources.
"A lot of them don't have the resources to provide all this documentation," he said. "[Providing it for everyone is] going to take away from their mission. Or they're going to have to say to folks who are contributing cash, `Look, we can't really provide you with the documents.'
Study Says 85 Percent of U.S. Dioceses Experienced Thefts
Eighty-five percent of U.S. Roman Catholic dioceses participating in a survey of financial controls have detected internal thefts during the last five years, according to a new study.
Though researchers did not put a dollar amount on the money taken, 11 percent of survey respondents reported embezzlements of more than $500,000 during the last five years. Twenty-nine percent reported thefts of less than $50,000, according to the survey. More than 90 percent of the dioceses that detected theft reported the crime to the police.
Of the 177 U.S. dioceses contacted by researchers from the Villanova School of Business' Center for the Study of Church Management, 78 (44 percent) gave "usable responses."
"Unlike corporations which provide quarterly financial statements to the SEC (Securities and Exchange Commission) and hold quarterly conference calls with outside analysts, the church is subject to almost no recurring outside financial scrutiny," wrote the study's authors, Villanova professors Robert West and Charles Zech.
Based on their findings, West and Zech recommend that all dioceses establish fraud policies, conduct internal audits annually and arrange for external audits at least every three years. The professors also recommend setting up a uniform budgeting process with standardized computer software for all diocesan entities and creating communication channels for church workers to report suspected irregularities.
Use of Koran in Oath Splits Conservatives
When U.S. Rep. Keith Ellison became the first person in Congress ever to take the ceremonial oath of office on the Koran, conservatives were divided as to whether it was appropriate.
Ellison, a Democrat from Minnesota, became the first-ever Muslim elected to Congress in November when the Democrats regained power in both the House and Senate. He took the ceremonial oath January 4 using a Koran once owned by Thomas Jefferson.
Soon after Ellison announced in November he would use a Koran for the ceremony, conservative radio host Dennis Prager wrote a column for Townhall.com criticizing Ellison's choice. Prager, who is Jewish, said Ellison's action "undermines American civilization" and "perfectly exemplifies multiculturalist activism."
"Insofar as a member of Congress taking an oath to serve America and uphold its values is concerned, America is interested in only one book, the Bible," Prager wrote. "If you are incapable of taking an oath on that book, don't serve in Congress. In your personal life, we will fight for your right to prefer any other book. We will even fight for your right to publish cartoons mocking our Bible. But, Mr. Ellison, America, not you, decides on what book its public servants take their oath."
But Eugene Volokh, a professor of law at the University of California Los Angeles and a regular contributor to the conservative National Review Online website, disagreed, arguing that any requirement to take an oath using the Bible would violate the Constitution's provision that "no religious test shall ever be required as a qualification to any office." The Supreme Court's most conservative justices, Antonin Scalia and Clarence Thomas, would strike down any such requirement, Volokh said.
Warsaw Archbishop Steps Down
Over Cooperation With Secret Police
Instead of celebrating his appointment as archbishop of Warsaw on January 7, Stanislaw Wielgus gave up his office after confirming media reports that he had collaborated with Poland's secret police in the 1960s and 1970s.
The special service had been planned to celebrate Wielgus' official ascendancy to archbishop of Warsaw, the most important position in the Roman Catholic Church in Poland. Instead, in a hastily rescheduled service, Wielgus announced his resignation. Supporters shouted "No!" and "Scandal!" as the statement was read.
Cardinal Jozef Glemp, the former archbishop of Warsaw who will now resume those duties until another successor can be named, then delivered a homily on confessing sins, according to Germany's Sueddeutsche Zeitung (Southern German Newspaper).
The allegations have forced Polish Catholics to choose sides. Glemp argued for Wielgus to be allowed to continue in his new role, arguing that Wielgus was being judged "based on shreds of paper and copies of copies" and "without lawyers or witnesses."
But Polish President Lech Kaczynski reportedly called the pope directly to argue that having a confessed informant as archbishop would harm both Poland and the church, especially since Poland's favorite son, the late Pope John Paul II, worked hard to defeat communism.
Allegations that Wielgus cooperated with the secret police were first published in the anti-communist magazine Gazeta Polska, shortly after Pope Benedict XVI appointed Wielgus as archbishop of Warsaw. The issue largely simmered until January 4, when more mainstream publications printed the allegations with quotes from government documents. Those allegations were later confirmed by government and church experts, although Wielgus denied them until Sunday.
According to the newspapers, Wielgus cooperated regularly with the SB, the Polish secret service, between 1968 and 1973, eventually suggesting other members of the Catholic Church to approach as potential informers. With the SB's help, he traveled to Germany in 1973, apparently with directions to report on the activities of the Polish exile community in Germany.
It is unclear if Wielgus' assistance led to the punishment of any dissidents.