Good morning,

I hope everyone is finding a way to keep cool in this brutal summer heat.  Unfortunately, what I am about to tell you may cause your thermometer to pop up a few degrees!

Over the last year and a half or so, we have been advising our church clients and breakfast attendees that the IRS’s attitude towards churches and ministries appeared to be taking a less than desirable turn.  Our fear was that due to some high-profile cases of abuse, the IRS would begin taking a closer look at churches, ministries and individual ministers.  This week, our fears were confirmed by a brief comment in The Kiplinger Tax Letter.   The following is a quote from the July 10, 2009 issue.

“Ministers will get special attention from auditors as well:  A new audit guide tells examiners to be on the lookout for several potential trouble spots.  Among them: Incorrectly figuring the tax free housing allowance and failing to pay SECA tax on it.  Wrongfully claiming to be exempt from SECA tax, and deducting business expenses that are attributable to tax-exempt income. Go to the IRS's guide to check out the complete list of tax issues that examiners will be looking for.”

You might want to follow the link above to make sure you will come out ok should your church or any of its ministers receive one of those very inconvenient letters from our friends at the IRS.

If you need any help interpreting any of the IRS gibberish don’t hesitate to give us a call. 

Also, this might be a good time to consider having PSK perform an IRS compliance review.  In a compliance review we perform many of the tests that an IRS auditor would perform with one huge difference.  If we find areas of noncompliance we help you get it fixed.  If the IRS finds it… Well you know.

Stay cool…
Verne