I don’t know of any letters or words that strike fear in the heart of individuals like the three dreaded letters, IRS (Internal Revenue Service). It is probably only second to the word “cancer.”
Many Churches feel as if they never have to worry about a visit from the IRS. That used to be almost true. In years past, before the IRS could perform an audit on a Church, the Internal Revenue Service had to follow guidelines outlined in Section 7611. That section of the IRS code required “an appropriate high-level Treasury official” to approve a tax inquiry on a Church. Those days are gone forever.
If a Church is audited after the 7611 wall is successfully maneuvered, there is no hope of appeal for that house of worship.
Church audits are up over 50% from the past year and the statistics are changing daily. The reason for the increase is because the IRS is gradually eroding the 7611 audit threshold. This is due to the addition of the Affordable Care Act to IRS oversight and the ability to perform Employment Tax (941) audits.