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Well, in this case, if he never comes back, the $600 rule would let them off. But you are right to stand your ground, because you never know until the end of the year what the total may be. And the point you are making to them is that when they pay anyone for his services, whether it's under a contract or not, it's taxable income to the one receiving it, and reportable by the church. It might have been intended by the members as 'gifts', but the tax code does not allow that treatment when the 'gift' is related to his 'gift' of his time. That is the same rule that prohibits the owner of a grocery store or a car dealership, etc, to give his employees a "Christmas gift" of over $25 value, without including it in their W-2. If the church had just decided to 'gift' the man some money because he needed it, that would be part of their mission as a church. But that is not what happened.. They took up that collection for him because he came and spoke, and that is part of what he does for a living, no matter what other motives he has in his heart,

The church is not required to issue a 1099-Misc unless he shows up unexpectedly again and the total for the year exceeds $600. However, the minister is required to report the $500 honorarium on his personal return irrespective of whether or not a 1099-Misc is issued. But that isn't any business of the congregation's - it is a matter between the minister and the IRS (although the minister's Boss has a position on the matter which He explained in Matthew 22:21)

And those gifts to the regular pastor? Not 1099s, but include on his W-2. I agree that the unexpected visitor gets a 1099, box 7.

Lets say you show up on a Sunday and do some light bookkeeping, W2's and 1099's for them at the end of the year. You don't expect to get paid but they pass the plate and give you a "gift" of $500. What would the IRS say to that? Just because it is a church giving it out does not make it tax free. Tom Hollister, CA