Background. Only 29 percent (about 3 out of 10) taxpayers are able to itemize deductions on Schedule A. This interesting statistic is buried in the Spring 1994 Statistics of Income Bulletin issued by the IRS in June. What is the relevance of this to church treasurers? It demonstrates that 7 out of 10 ministers and lay church workers who report their federal income taxes as employees (or who are reclassified as employees by the IRS) will be unable to deduct either their unreimbursed business expenses or business expenses reimbursed under a nonaccountable arrangement. Here's why. Employees can claim unreimbursed business expenses (including travel and transportation expenses), and business expenses reimbursed by their church under a nonaccountable arrangement, only as miscellaneous itemized deductions on Schedule A. Employees who cannot itemize deductions will not be able to deduct any of these expenses. This is particularly unfortunate for employees whose business expenses are reimbursed under a nonaccountable plan, since they must include the full amount of all the expense reimbursements as taxable income but they are denied any deduction of their expenses. Reimbursed expenses are nonaccountable if the employee was not required to or did not "account" to the employer for the expenses or was not required to or did not return any "excess reimbursements" (employer reimbursements in excess of substantiated expenses) to the employer. The most common form of nonaccountable reimbursement is a monthly car allowance paid to a church employee without any requirement that actual business expenses be substantiated.