Strategies for Managing Clergy Audit Red Flags 

 

The good news is that very few people , on the average, get audited by the IRS. The bad news is that, no matter how many precautions you take, there's no way to guarantee you won't be selected for an audit. Now here’s the even worst news: just because of the profession that you are in, the chances are that you might very well have tax deductions to which you are entitled, but which may increase your probably for an audit.
As you are no doubt well aware, an audit, despite the general professionalism of the IRS, is rarely a pleasant experience. Nevertheless, we at Clergy Tax Relief can help you develop comprehensive strategies for managing any audit problems that you may have. While we will work with you to tailor-make a plan for your individual situation, a good plan will usually include each of the following strategies:

 

Strategy 1:  Becoming Aware of the Tax Audit Red Flags Commonly Raised by the Clergy

• Charitable deductions greater than the norm for your income bracket

• Filing a Schedule C

• Home office deductions

• Claiming the business use of a vehicle

• Claiming business travel, meals, and entertainment expenses

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Strategy 2:  Risk and Reward Evaluation 

• Your tax professional will first acquaint you for a given situation what the audit risk is in comparison to the financial gain for using a particular approach.

• You will then make a decision if the gain is worth the audit risk in that particular situation

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​Strategy 3:  Documentation Preparation

• Your Tax professional will instruct you concerning the proper documentation that would be needed for substantiating your particular item(s) in the event of an actual tax audit.

• At the discretion of your tax professional, you may be asked for copies of your documentation, to be submitted with your tax filing. This is often a useful to provide explanations in advance for that which might seem questionable to an IRS examiner.

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​Strategy 4:  Obtain Clergy Audit Assistance

• IRS figures show that only 1 percent of individual taxpayers are audited each year. Those figures are even lower for taxpayers with incomes in the $25,000 to $75,000 range, with audit rates picking up substantially only after you make $200,000 or more. 

• However, for those still feeling uneasy, there is another option: for a nominal fee, you can get audit assistance. For more information on our audit protection plan for the clergy, click on the “continue” button.