Piano Lessons at Church

Home > discussions > ask the experts > discussion

ask the experts

Can our organist offer private music lessons on church grounds?

Frank Sommerville responds in our Ask the Experts discussion.

Try also:

Compensation, Tax exempt, Unrelated business income tax

Posted:

6/07/2011

Total Reader Responses:

0 [ Read responses | Add your own response ]

Question:
Our church is currently interviewing for an organist position. The salary we can provide is only half-time and one of the candidates, looking for more income, requested permission to give lessons at the church using the piano and organ. The interview committee was intrigued by the idea as a potential ministry to the community, but the personnel committee is more wary, wondering about the implications of this type of arrangement. Would it be unwise for our church to grant this candidate's request?

Answer:
There are two possible solutions to your situation. First, your church may offer organ/piano lessons to the community as part of its educational programs. The church could set and collect the fees for the lessons from the students. This may generate additional income so that your church can afford to hire the organist to a full-time position.

It is important to note that your church may not allow any individual to use church assets to further their private business without fair compensation to the church. In practice, the church could rent the organ/piano to the individual and allow that person to give lessons using church assets. Essentially, as long as the rent charged equals fair market value, then the church can authorize the private use of church assets. However, this arrangement will generate unrelated business income and may cause the church to lose its property tax exemption on the rented asset. I do not recommend this option.

To learn more, see the downloadable resource Understanding Unrelated Business Income and Protecting Your Tax-Exempt Status.

Frank Sommerville, JD, CPA
Board Certified Tax Law
Texas Board of Legal Specialization
Dallas and Houston, Texas
1-877-537-4360

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Copyright © 2008. Brotherhood Mutual Insurance Co. & Christianity Today. All rights reserved.