Hubert Swaringer is the pastor of the United House of
Prayer for All People in New York. He is paid from the "offerings" of the
congregation as a self-employed minister. The IRS used the "bank deposits"
analysis to verify income, finding a number of unreported "gift" deposits.
The court found that these transfers from the congregation to Swaringer were not
"gifts" within the meaning of § 102(a). Instead, the transfers arose out
of Swaringer's relationship with the members of his congregation presumably because they
believed he was a good minister and they wanted to reward him. Further, Swaringer
testified that without the gifts his activity as a minister was essentially a money losing
activity, i.e., the so-called gifts were part of the compensation he received for being a
minister. As such, the transfers are not excludable from income under §102(a) as a
gift. (Goodwin v. Comm., 67 F.3d 149 (8th Cir. 1995); Webber v. Comm.,
219 F2.d 834 (10th Cir. 1995)).
