Q&A: What Qualifies as a Church Business Lunch?

Reimbursed business expenses must be considered “ordinary and necessary.”

Q: A group of local pastors meet once a week for Bible study, and afterward some of them go out for lunch together. Assuming the conversation isn’t entirely business related, would that meal be considered a business expense and reimbursable under an accountable expense reimbursement plan? Or should our pastor be paying for those lunches with his personal credit card?

The lunch likely does not qualify as a business expense because it is not necessary for conducting church business.

All reimbursed business expenses must be “ordinary and necessary” to qualify as church business.

“Ordinary” means that the expense is the type of expense ordinarily incurred by churches conducting their business. This requirement is met.

“Necessary” means that it is necessary to incur the expense in order to conduct the church’s business.

If the lunch was required as part of the Bible study, then it would meet the necessary component. Assuming that the lunch is a voluntary social occasion, then the lunch is not necessary for the pastor to attend and, therefore, personal. And if it is personal, it cannot be reimbursed under an accountable expense reimbursement plan.

Also note that business-related expenses, if justified, still can’t be reimbursed under an accountable expense reimbursement plan without proper documentation.

Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

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