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Be Prepared for a Church Payroll Tax Audit

8 trouble spots for churches to scrutinize before receiving notice of an IRS payroll tax audit.

Contact: Sandra Hoekstra-Lower, Christianity Today, 630-260-6200 ext 4224

CAROL STREAM, Ill., May 28, 2014 /Christian Newswire/ -- In an IRS payroll tax audit, any number of problems can be identified, proving potentially costly to the church, its ministers, and its staff. The June issue of Church Finance Today explains which files and paperwork need to be organized to stay prepared for an audit and highlights eight common problems spots for churches:

  • Test expense reimbursement substantiation. In some churches, the pastoral staff may not be adequately forthcoming with expense substantiation. Is the business purpose for travel recorded? For meals, does the documentation reflect not only the date and the amount, but who participated in the meal and the business purpose of the meal?
  • Review worker classifications. Are you treating workers as independent contractors who really have significant employee characteristics?

There are six more trouble spots churches should watch out for when they review and organize their documentation which should be kept for at least seven years. For complete coverage subscribe to Church Finance Today.

Christianity Today is a nonprofit, global media ministry that equips Christians to renew their minds, serve the church, and create culture to the glory of God. With its vision to see the church grown up into the fullness of Christ, the ministry reaches more than 3.5 million people every month through a wide range of digital and print resources.