Asked, Answered: Expense Reimbursements for Church Employees

In this two-minute video, Matt Branaugh highlights why expense reimbursements for church employees require special attention and care.

Last Reviewed: March 21, 2024

A recent Legal Development out of federal tax court highlights the importance of properly handling expense reimbursements for church employees.

In it, a pastor and his wife, though acting in good faith, claimed about $37,000 in unreimbursed business expenses for items such as vehicle mileage, travel expense, business meals.

However, after examination their claim, the IRS disallowed the deductions.

The primary reason? The couple failed to properly substantiate their expenses.

Meanwhile, as Matt Branaugh explains in this short video, churches and church employees can avoid wallet—and heart—breaking scenarios like these through the use of accountable reimbursement plans.

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If you’re not up to speed on accountable reimbursement arrangements (which are sometimes also called accountable reimbursement plans), don’t worry, Church Law & Tax members enjoy plenty of access to resources on this topic, including:

For Basic and Advantage Members: Understanding four specific requirements for setting up an accountable reimbursement arrangement.

For Advantage Members: A Q&A with Senior Editorial Advisor, CPA, and attorney Frank Sommerville about how tax reform has affected accountable reimbursement arrangements.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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