Since religious organizations have specific tax laws recognizing their rights under the First Amendment and state and federal tax laws change from time to time, it’s always important to consult a tax professional. Or visit IRS.gov resources if you have questions regarding any aspect of retaining church tithe or giving records. Otherwise, you may face the possibility of jeopardizing your tax-exempt status.
The laws regarding religious organizations do not specify the length of time that church tithe records are kept. But in the event of an audit being administered, it is recommended that donation records are kept for at least seven years. This is the maximum period that the IRS can go back to administer an audit. In addition to tithing or giving records, the following are also recommended to be retained for seven years:
- Bank statements
- Checks and reconciliations
- Acquisitions and disposition of property
- Accounts Payable records
- Accounts Receivable records
- Payroll tax records and registers
Electronic backup in PDF format is the best way to retain your contribution information. Using a church online giving platform will help you simplify your record keeping by automatically creating records for each online donation. Many church management systems can also help you retain church tithe records, whether electronic or not, and store information offsite in a secure environment. These systems allow contributors access to their giving history, eliminating the need for church staff to be overwhelmed during tax season or in the event of a congregant or parishioner’s personal IRS audit. Either way, be sure the information is protected in the event of a cyber hack, fire, flood, computer virus, etc. Other records are essential to retain permanently (please consult the IRS website for details).
Take a look at how we can help your church or parish manage your financial records and more with a personal demo of Realm church software.
Use this free resource guide, Gearing up for Fall Giving, to educate and encourage your members to engage in this Biblical stewardship of tithing.