Excess tithing contribution - what to do

hello everybody. We have a member who mistakenly contributed too much in tithing. Meaning, she made the check out for too much. The check matches the donation slip, and of course the batch is completed correctly, but she contributed $800 instead of $80. Brain freeze I guess. She would rather not wait for her income to catch up with her tithing donation. What do we do? I don't think we can cut a check against the tithing category. thanks...

You could recategorize the donation to be $80 of Tithing and $720 of some subcategory of Other:Authorized Member Financed Activities. Then you could write a check to refund the $720. Normally tithing is not refundable, but where it is clearly a mistake, this seems like it could be a reasonable solution.

We had a similar situation a couple of years ago. What we did, with the approval of the Bishop, of course, was to "loan" the Sister the amount she over paid, and each week when she paid her "Tithing", we would put it into the "Other account" from which we had " borrowed" it. Fortunately we had an account with enough money to do this. And all worked out well.

I think aebrown's solution creates a more honest "paper trail" of what happened whereas creating a loan program in MLS makes it harder to figure out the true story.

I think Bro Browns way would be the best way to do this.

I'm a little shocked that this solution has been presented so quickly and nobody has blasted it yet. After all, we had a rather lengthy and "dramatic" discussion about a similar situation in this thread from September 2011. People were talking about fraud, tax lawyers, clear violations of church policies, multiple calls to CHQ, giving Fast Offering assistance to the donor, etc.. But, this time, aebrown's simple solution has not been challenged.

(It's funny how, when I offered up an identical solution back in September 2011 I was blasted for it but, today, when someone else writes it, it's fine. Makes me feel like a rather unpopular fixture around here.)

@mrrad,
Sorry you are taking this so personally. People do change their minds or positions on matters over time. After reading the thread to which you linked, I don't see a perspective of "blasting" your option proposed then. There were reminders of current policy and procedure and caution in implementing any option that might run afoul of Church policy or some laws. The discussion then occurred over several days. It has been but a few hours now into this discussion.

I personally would not be so quick to follow any recommendation made here without first checking with CHQ. The technical aspect of what you proposed long ago and was again mentioned in this thread is possible. Whether or not it is the correct or even good procedure to follow is why we discuss them and try to bring to light all aspects of the issue.

True. All of these ideas are just ideas, either ones that have been tried, or just someone's untried idea. Has anyone ever called CHQ and asked them? I haven't, we just came up with an idea that worked.

waynecooke wrote:Has anyone ever called CHQ and asked them?

I have. The proper solution two years ago was for the stake president to call the Finance Department, explain the situation, and for them to issue a check directly to the member for the excess amount. This takes a lot of time, and in our case there had to be a workaround while the member was waiting for the check from CHQ. (The workaround we used did not involve Church funds.)

In our case, the contribution was questioned as unusual because of the amount (10 times, as with the original post, but ours was a much larger overall amount). But everything else was in order so a call was not made to the member. None was required, of course.

It would have been better if the check had bounced.

I acknowledge the clever workarounds presented. As already pointed out, the suggestion aebrown made is probably the simplest way and best for audit purposes, although I do not know if the Finance Department would allow a ward to do that.

If the issue were to come up again, I would certainly suggest it to them and try to get them to allow it. But I can think of a couple of legal and tax reasons they probably would not.

It never hurts to ask, though.

lajackson wrote:It would have been better if the check had bounced.

Now there is an idea. Assuming the error was caught after the deposit and before the bank opens.

Sometimes the simplest way to correct a mistake is the best way. The suggestion of correcting the donation slip by putting $80 under tithing and $720 in the other account and then writing a check from the other account would be the best way to correct this mistake. I see no need to talk to anyone other than letting the bishop and the member know what was done to correct the problem. The member who made the donation will also get a letter from CHQ letting them know that a correction was made and why it was made.

Gary_Miller wrote:Sometimes the simplest way to correct a mistake is the best way. The suggestion of correcting the donation slip by putting $80 under tithing and $720 in the other account and then writing a check from the other account would be the best way to correct this mistake. I see no need to talk to anyone other than letting the bishop and the member know what was done to correct the problem. The member who made the donation will also get a letter from CHQ letting them know that a correction was made and why it was made.

Is this a procedure that was suggested to you by CHQ? And how are you aware of the letter from CHQ to the member?

What you suggest makes good sense. The problem is taken care of locally and the member receives a letter from CHQ so that what has happened cannot occur without the member's knowledge. I think this is a wonderful idea, if it is an approved idea.

lajackson wrote:Is this a procedure that was suggested to you by CHQ?

No CHQ did not suggest this procedure to me. I have not had this problem so have had no need to seek advice from CHQ, even if I had I would not have gone to CHQ with such a small problem. We would work it out at the local level with the Bishop.

lajackson wrote:And how are you aware of the letter from CHQ to the member?

I did not know about this letter until last Sunday. I had made a small category correction to a donation in close batch(YW camp payment was place in the wrong other category) it so happened that the donation was the Bishops donation. The Bishop received a letter letting him know about the category change so he brought it in with the rest of the mail addressed to him. He gave it to me because he did not know what it was for. The letter had the original categories and the new categories which it was changed to. The letter also had the description that I place in MLS on why it was changed. It also said the member could call HQ for further details.

lajackson wrote:What you suggest makes good sense. The problem is taken care of locally and the member receives a letter from CHQ so that what has happened cannot occur without the member's knowledge. I think this is a wonderful idea, if it is an approved idea.

Approved by who the Bishop, Stake President, Area Authority, or LUS? I see no need for any approval any higher than the Bishop. Even then its more likely the Bishop was the one approached by the member with the problem and then the Bishop if he good at delegating and trusts his Clerks to do the right thing should just let the Clerks handle it. This is not something worth wasting anyone else's time on but the local Clerks.

Gary_Miller wrote:Approved by who the Bishop, Stake President, Area Authority, or LUS? I see no need for any approval any higher than the Bishop. . . . This is not something worth wasting anyone else's time on but the local Clerks.

While I admire solving problems at the lowest level possible, I disagree that the bishop has authority to approve this action. Handbook 1:14.4.9 is very clear that there could be legal and tax complications for both the contributor and the Church.

I believe the Church needs to be involved in the decision on how to handle a situation such as this one.

lajackson wrote:While I admire solving problems at the lowest level possible, I disagree that the bishop has authority to approve this action. Handbook 1:14.4.9 is very clear that there could be legal and tax complications for both the contributor and the Church.

I believe the Church needs to be involved in the decision on how to handle a situation such as this one.

I don't think this situation qualifies as a refund as refrenced in the handbook. This situation is just correcting a mistake where a member when figuring out thier tithing amount mistakenly wrote the check and slip out for the total income ($800) instead of 10% ($80.00) an easy thing to do when you have two figures in your head and are in a hurry. Using the method suggested would only be correcting the mistake and returning (Not Refunding) the over payed amount.

To auditors, "return" and "refund" look the same.

+1 for lajackson: I agree, it should at least be run past the finance department.

Sometimes it is easier to ask forgiveness that permission.

waynecooke wrote:Sometimes it is easier to ask forgiveness that permission.

Depends on who you get hauled in front of. That's not good advice when it comes to tax law.

It's also a bad idea if it would involved a penalty to the church that would take a lifetime of tithing to pay back.

The safe thing is to call CHQ and ask.

TinMan wrote:To auditors, "return" and "refund" look the same.

I have yet to see an auditor dig that deep in that they ask why something happened. While I suppose it could happen the audit form is looking to see that the receipts match the check and the expense is approved by the Bishop. In this case it would just show a return of funds due to over payment

TinMan wrote:+1 for lajackson: I agree, it should at least be run past the finance department.

So Bishop, what do you tell the member when they state that they made a mistake in writing the check and now they have no funds to pay their bills?

russellhltn wrote:Depends on who you get hauled in front of. That's not good advice when it comes to tax law.

It's also a bad idea if it would involved a penalty to the church that would take a lifetime of tithing to pay back.

Changing the category on the donation to but money in the other account would have no effect on tax laws (at least in the US). Money place in the other account is not tax deducatable and there are already procedures in place for returning the funds when one over pays or does not attend an event.

russellhltn wrote:The safe thing is to call CHQ and ask.

No one is arguing that it would or would not be a safe thing to do just that its not necessary.

Suppose the woman uses her cancelled checks for her tax deduction justification. What is to prevent her from using the cancelled $800.00 check for tax purposes and not bother to show the IRS the "refund" of $720.00.

Is the Church complicit in tax fraud?

If you write her a check for $720.00, do you have to give her a 1099 at the end of the year?

TinMan wrote:Is the Church complicit in tax fraud?

No the member would be as the official tax donation receipt would show the correct amount and that is what the tax auditor is likely to ask for.

On the other hand the likely hood of the average middle class american having enough deductions to itemize is slim. The would have to have a large amount of mortgage interest and property taxes payment in order to have enough deductions to make it worth itemizing their deductions, which one must do in order to deduct charitable contributions. IE: Itemized deductions > standard deduction.

TinMan wrote:If you write her a check for $720.00, do you have to give her a 1099 at the end of the year?

Why would you give her a 1099 its not income. Nor is it a payment for some type of service.

Gary_Miller wrote:

TinMan wrote: Why would you give her a 1099 its not income.

I don't know because I am not an accountant or tax lawyer. But I do know that every February I get a long letter from the Church that lists all the reasons you have to give a 1099 to people you have paid over $600.00 to.

That is why I would call and ask about the proper way to refund the overpayment.

TinMan wrote:I don't know because I am not an accountant or tax lawyer. But I do know that every February I get a long letter from the Church that lists all the reasons you have to give a 1099 to people you have paid over $600.00 to.

Form 1099-MISC, Miscellaneous Income, used to report to the IRS payments of over $600 in which you have paid any one person for goods and services. In most cases this would mostly be from the Fast Offering account where you may have paid rent or something else to an individual. For the most part a 1099 is not necessary if the money is paid to a corporation.

TinMan wrote:That is why I would call and ask about the proper way to refund the over payment.

Once again its not a refund it a return for over payment.

And in the mean time while you trying to get a hold of CHQ (not on a Sunday) and waiting for them to make a decision (may not happen overnight). What do you tell the member who needs to pay bills?

Gary_Miller wrote:

TinMan wrote: Once again its not a refund it a return for over payment.

And in the mean time while you trying to get a hold of CHQ (not on a Sunday) and waiting for they to make a decision (may not happen overnight). What do you tell the member who needs to pay bills?

Sorry. I missed the part where it was an emergency. I would suggest she talk to family members for a temporary loan of $720. If that wasn't possible, I would offer to cover any bills from Fast Offering Funds until it got straightened out.

TinMan wrote:If that wasn't possible, I would offer to cover any bills from Fast Offering Funds until it got straightened out.

While this is well and good and would work for some bills it does not work for everyday expenses or consumer debt.

In order to avoid any further argument we are just going to have to agree there maybe several ways in which to accomplish this. So we will have to agree to disagree and leave it up to the individual Bishop to decide how to handle the situation.

Thank you Gary_Miller

It strikes me that this problem might have been avoided if the men counting and verifying the donations allowed themselves to be just a little curious about what they were seeing. If you've been doing the calling for more than a few months you notice patterns. If you stopped long enough to think about who's donating and how much they're donating you'd recognize something unusual was happening before sending the check to the bank for deposit.

The great thing about noticing something unusual is that you have three years worth of MLS data at your fingertips at that very moment. You could easily look up that donor's record to confirm that, yes, this $800 donation is ten times as large as a typical donation from this person. Then give the donor a call before proceeding or, if you think you're being too nosey, let the Bishop call the donor.

It's easy to think that, because you're dealing with confidential matters, you shouldn't think too hard about the financial situations of individuals in your ward. But I think it's part of magnifying your calling. I've heard numerous stories from people who, after being released from a calling, have an almost miraculous ability to forget the confidential matters they knew when they had the calling. There's a certain satisfaction when dealing with ward finances in thinking that as long as everything is balanced in the reports then you've done your job exactly right. But I think there can be more to it than that.

What if you received a donation slip that had $400 for the Ward Missionary account and didn't specify an indivudual missionary's name? Would you enter the donation exactly as it was written on the slip without being a little curious about where it really should go? And then consider that two men should be verifying this information before it goes into the MLS record. Did neither one think twice about it?

mrrad wrote:It strikes me that this problem might have been avoided if the men counting and verifying the donations allowed themselves to be just a little curious about what they were seeing. If you've been doing the calling for more than a few months you notice patterns. If you stopped long enough to think about who's donating and how much they're donating you'd recognize something unusual was happening before sending the check to the bank for deposit.

The great thing about noticing something unusual is that you have three years worth of MLS data at your fingertips at that very moment. You could easily look up that donor's record to confirm that, yes, this $800 donation is ten times as large as a typical donation from this person. Then give the donor a call before proceeding or, if you think you're being too nosey, let the Bishop call the donor.

Frankly, I have no idea what's going on in their lives that may have caused them to increase their donation. Maybe they got a bonus. Maybe they've changed how much they think they should be contributing. But what I do know is that before that slip is looked at by the people counting, the member had to
1. Write out a check, or count out the cash.
2. Fill out a donation slip with the amount identified.

Those are two points where the member could pause and reconsider how much they are actually donating. They are far, far better equipped to analyze their life than I am.

It's easy to think that, because you're dealing with confidential matters, you shouldn't think too hard about the financial situations of individuals in your ward. But I think it's part of magnifying your calling. I've heard numerous stories from people who, after being released from a calling, have an almost miraculous ability to forget the confidential matters they knew when they had the calling.

I don't know how others handle it. But I can tell you that I don't remember donation amounts from three days ago, much less over the course of the five years I've been a finance clerk. Are there patterns? Sure. But patterns are broken all the time.

What if you received a donation slip that had $400 for the Ward Missionary account and didn't specify an indivudual missionary's name? Would you enter the donation exactly as it was written on the slip without being a little curious about where it really should go? And then consider that two men should be verifying this information before it goes into the MLS record. Did neither one think twice about it?

If I can't determine where it goes based on some detective work (similar name, talking with the bishop, etc.), it goes into the general Ward missionary account. Generally when that happens (and it does happen), I learn about it sometime later because the family of the missionary will follow up on it, or the bishop will ask if so-and-so made a donation towards X's missionary account. Afterwards, if the same family makes a donation, I know where to credit it, whether or not it's spelled out. But if they've never made a donation to WM before, I wouldn't try to contact them to ask if they were sure they meant to donate to WM, or ask them if they really meant to put that much into WM. It's their call, and they filled out the slip.

mrrad wrote:It strikes me that this problem might have been avoided if the men counting and verifying the donations allowed themselves to be just a little curious about what they were seeing.

Speaking for myself, if everyone in the ward was of "modest" means, a $800 check might trigger some curiosity on my part. But if the ward included some high-up managers, it may not trigger anything. I'd be more interested in properly completing the task at hand and moving on.

I suppose one could argue that the fine print on the donation slip doesn't adequately tell the donor that charitable donations are non-refundable. Sure, the Bishopric and clerks know the policy but the donors likely do not grasp it. The fine print on our slips today says: "Though reasonable efforts will be made globally to use donations as designated, all donations become the Church's property and will be used at the Church's sole discretion to further the Church's overall mission." Techincally, that implies "non-refundable" but it could be more clear. We know that Scout Camp money is refundable, after all, while still falling under the same terms in that fine print.

Speaking for myself, I would much rather ask the Bishop to make a "busybody" phone call when something seemed unusual than to tell a donor that "Sorry, you messed up and it's non-refundable. Maybe we can send you to the Bishop's Storehouse for groceries this month. But at least I did my MLS input job perfectly!"

I know that when I sold my house and paid tithing on the profit I made on the sale, I don't know if I would want the Financial Clerk calling me and asking me if I had come into a windfall or what. Like has been said, as long as the check and the slip match, that is what the donor wanted. I know when my son-in-law had an extra $5000 in his tithing, I was curious, but didn't ask him any questions. He told me later, of course, but I certinally didn't ask him.

I haven't thought this through all the way, but what if a member of the bishopric or a clerk (without any liquidity problems) paid her $720 and then $720 of the donation was recategorized as his tithing. Now that I think about it, I'm not sure if you can use "add a slip" after the fact. Probably not the best idea, but just throwing it out there.

waynecooke wrote:... I don't know if I would want the Financial Clerk calling me and asking me if I had come into a windfall or what.

I would agree that asking a question about a windfall is inappropriate. But I see nothing wrong with asking a simple yes/no question: "Before we process this donation, we just wanted to make sure. Is this the amount you intended?" If the donor answers yes, the matter is closed. If the donor answers no, he or she will probably be very grateful that someone called.

Clearly such questions should be rare, but with good judgment and the guidance of the spirit, it seems to me that it could be entirely appropriate to verify that a particular donation was indeed what the donor intended.

waynecooke wrote:Like has been said, as long as the check and the slip match, that is what the donor wanted.

Go back and review the original post. The whole reason we're having this discussion is that there was at least one case where the amount on the check and slip matched, but was most definitely not what the donor wanted.