Tracking Expenses During Mission Trips

What church leaders should know about documenting expenses in foreign countries

Many foreign countries have no sophisticated system of receipting expenditures and many mission trip leaders fail to understand the documentation standards placed on a US exempt organization. The trip leader should understand the following:

  • The dollars he or she cannot specifically account for will be his or her responsibility to return to the church at the end of the trip. There is no presumption of exempt purpose;
  • Where possible, receipts must be obtained for expenditures;
  • A detailed log of all the trip’s expenditures must be maintained, indicating dates, identities of those who received the money, amounts, and purposes of the expenses;
  • If funds are given to individuals for benevolent purposes, the trip leader will have the recipient sign that they received the funds and will document the benevolent need that necessitated the support.

At this time, the IRS is very focused on exempt organizations’ activities in foreign countries. It is always best to remember that the IRS never presumes any expense is spent on exempt purposes until it is proven, and with expenses in foreign countries, the IRS tends to presume that the money was personally spent by the trip leader—or worse, with a terrorist.

Adapted from “Avoiding Tax Pitfalls of Short-Term Mission Trips.”

Elaine L. Sommerville is licensed as a certified public accountant by the State of Texas. She has worked in public accounting since 1985.

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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