LDS Doctrine: Just What Is The Latter-Day Saints Definition Of Tithing? Gross Income Or Net Income? Should The IRS Definition Of Gross Income Be Used?

In a post on Mormon Mentality entitled "Mormon Mythology: Sons of Perdition", the issue of tithing once again surfaced when the author of the post included the following statement built into the post, "Did they not include the monetary value of company-paid benefits in their tithing calculations?".

This is the first time I've seen any reference to the possibility of including the value of "company-paid benefits" in any calculations involving tithing, and so it prompted me to find out if this was indeed necessary. We already know that tithing is generically defined as one-tenth of one's income, but how does the LDS Church officially define "income"?

The first stop, as always, is the LDS Gospel Library. From there, we obtain the basic doctrinal stance of the Church:

The Bible indicates that God’s people followed the law of tithing anciently; through modern prophets, God restored this law once again to bless His children. To fulfill this commandment, Church members give one-tenth of their income to the Lord through His Church. These funds are used to build up the Church and further the work of the Lord throughout the world. [Ed. Note: This is considered so important that wilful failure to pay a full tithing can lead to denial of temple recommend.]

One of the blessings of membership in The Church of Jesus Christ of Latter-day Saints is the privilege of paying tithing. This privilege is a double blessing. By paying tithing, Church members show their gratitude to God for their blessings and their resolve to trust in the Lord rather than in material things. They also help further the work of the Lord in the earth, blessing others of God’s children with the opportunity to learn of Him and to grow in the gospel.

Through the prophet Malachi, the Lord declared:

"Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it" (Malachi 3:10).

Church members give their tithing donations to local leaders. These local leaders transmit tithing funds directly to the headquarters of the Church, where a council determines specific ways to use the sacred funds. This council is comprised of the First Presidency, the Quorum of the Twelve Apostles, and the Presiding Bishopric. Acting according to revelation, they make decisions as they are directed by the Lord. (See D&C 120:1.)

Tithing funds are always used for the Lord's purposes—to build and maintain temples and meetinghouses, to sustain missionary work, to educate Church members, and to carry on the work of the Lord throughout the world.

A good overview, but it still doesn't define "income". Mormon Wikia is also ambiguous on this subject, simply stating "Tithing can be calculated as 10 percent of either net or gross earnings, depending on what each member considers his or her “increase” or income", although the following statement from Chapter 32 of Gospel Principles, "A tithe is one-tenth of our increase. This means that we give one-tenth of all we earn before we pay for our own needs such as food, clothing, and shelter", seems to lend support to basing tithing on gross income. During the October 2006 General Conference, Elder Daniel L. Johnson of the Quorum of the Seventy addressed this issue. In his address, he cited guidance provided by former President Howard W. Hunter, who opined that the term "interest" in the phrase "one-tenth of one's interest" meant profit, compensation, or increase. Written transcript of address HERE; video of address embedded below:

http://www.youtube.com/watch?v=qVrxijkZWKU



Again, no firm definition of "income" is provided. Perhaps the ambiguity may be attributable to the fact that different nations with different tax systems have different definitions on what constitutes "income". The U.S. tax forms differentiate between gross income and net income. Perhaps the Church leadership has decided to leave this ambiguous in order to allow for these differences.

Unfortunately, this ambiguity can lead to hair-splitting Talmudic-style rows over what constitutes a proper tithe. Thus LDS members end up in danger of placing themselves in positions of judgment over their fellow Saints. It can also lead to excessive agonization during the annual tithing settlement.

Here is my suggested definition for Latter-day Saints resident in the United States, based upon my interpretation (and ONLY my interpretation) of the spirit and intent of the pronunciations by Church leadership: Use gross income as defined by the Internal Revenue Service. Whatever figure you enter on the IRS form you use, simply calculate 10 percent. By using this number, you will automatically account for other variations, such as interest income, capital gains income, and other esoteric sources such as gifts given to you by others. It is my opinion that the Lord intended for us to give Him ten percent of ALL income, and basing our tithing upon IRS-defined gross income not only most closely approximates that goal, but will curtail this endless wrangling about the definition of "income".

Thus if company-paid benefits are not reportable as gross income, then company-paid benefits are not subject to tithing. A good rule of thumb - if it isn't reportable to the government, then it probably doesn't need to be considered reportable to the Church.

Nevertheless, because the Church leadership has deliberately left the definition of "income" ambiguous, this implies that, during tithing settlement, if the bishop asks if you are paying a full tithing, and you're paying 10 percent of net income, you can honestly answer Yes. You make the call; ultimately, it is between you and the Lord. More background on annual tithing settlement HERE.

Method of payment: In areas with modern cash economies, tithing in the form of monetary payment is preferred; most bishops are not equipped to accept "tithing in kind", meaning payment in the form of commodities or labor. Consult your local bishop for further guidance.

Tithes vs. offerings: This paragraph was prompted by a report by an individual that he had written a check for 10 percent, but chose to split it between tithing and the Church's Perpetual Education Fund. Uh-uh; that is NOT considered a full tithing. Tithing is a unique category, as shown on the Church's donation slip HERE. Everything else shown on that slip is an OFFERING; while offerings are always welcome, they do NOT constitute tithing. This is not intended to be picky, but to be precise. Besides, the Lord Himself has said, "My house is a house of order, not a house of confusion".

Additional references:

-- Chapter 32, Gospel Principles
-- Mormon.org
-- About.com: Latter-day Saints