Jump directly to the Content

Surviving an IRS Audit


Recently the Internal Revenue Service issued "audit guidelines" for ministers' tax returns. Here are attorney and accountant Richard Hammar's conclusions of the risks and benefits of the new guidelines.

Is a minister an employee or self-employed?

The guidelines inform agents that most ministers are employees for income-tax reporting purposes, and that this is "the first issue that must be determined." The guidelines do not say that all ministers are employees but "are generally considered employees." Self-employed status will be the exception, however, and any minister reporting income taxes as self-employed must expect to have his or her status challenged if audited.

Who is a "minister"?

Happily, the guidelines apply a flexible definition of the term "minister." It is more likely that associate pastors, and clergy employed by seminaries and parachurch ministries, will be considered "ministers" for federal tax purposes. There is less risk of an auditor challenging ministerial status.

What is ...

January/February
Support Our Work

Subscribe to CT for less than $4.25/month

Homepage Subscription Panel

Read These Next

From the Magazine
Christian Fiction (Finally) Has Issues
Christian Fiction (Finally) Has Issues
Evangelical novelists have embraced human grit and struggle. Getting readers to notice is its own struggle.
Editor's Pick
The Last Gift My Father Gave Me
The Last Gift My Father Gave Me
A surprising encounter with my dad, Jesus, and Jerry Seinfeld opened a door to long-awaited healing.
close