How to Survive an IRS Audit

An IRS audit can be a very frustrating process. With that said, it is important to understand that it is nothing personal. In other words, it is not as if this particular IRS agent singled you out and decided he or she wanted to audit you. Therefore, try to stay calm and keep in mind…

Read More
Avoid a Tax Audit with Unreimbursed Ministry Expenses

Most of the time, clergy get reimbursed by their church for any ministry/business expenses they pay for themselves. As a result, the IRS looks carefully at unreimbursed ministry/business expenses. Many items are potentially deductible, including dues and license fees, subscriptions to subscriptions and publications related to your ministry, supplies, and professional clothing. Yet the temptation among…

Read More
Tax Deduction That Could Lead to an Audit

Getting audited can be the worst nightmare for clergy, but that shouldn’t stop you from taking advantage of the tax deductions you’re legally entitled to take. You should just take care to make sure you have the documentation you need to back up your deduction if the IRS decides to take a closer look at your return….

Read More
How to Avoid a Tax Audit

Besides flagrant errors and intentional lies, four innocent mistakes often attract the attention of the IRS or your state. Should you make one of these mistakes, you need an “audit trail” and filing record ready to prevent the initial investigation from becoming a full-blown audit. Let’s cover the red flags first and disaster prevention second….

Read More
7 Steps to Avoid a Tax Audit

One of the most dreaded outcomes of filing your taxes is receiving notification that the Internal Revenue Service would like to administer a tax audit on you. In the simplest terms, a tax audit is an examination of your tax returns to verify that your income and deductions are accurate. The IRS examines your tax…

Read More
Beware – Clergy Audits are on the Rise!

During tax season and throughout the year, IRS agents carefully review every tax return that comes across their desks. However, agents take a second glance if they catch something on a return that seems abnormal. These categories often include charitable contributions, ministry expenses reported on form 2106, SE income, IRC 265 and other business expenses.  This…

Read More
IRS audits of individuals are way down

Thanks to reduced funding to the IRS by Congress, the audit rate for individual tax returns has declined from 291,000 field audits in fiscal year 2014 to 267,000 in fiscal year 2015. The number of correspondence audits increased from 951,000 for fiscal year 2014 to 961,000 for fiscal year 2015. The revenue from examinations fell…

Read More
Will your tax return be audited?

A significant portion of clergy audits include Schedule C and Form 2016. The Schedule C is a one-page tax schedule used by self-employed to report their business income and expenses on their personal federal income tax return. Form 2106 would report ministry related expenses as an employee of the church. The good news is that…

Read More