My stats show that there are about 23,000,000 businesses organizations in America. Out of 23 million, 1.5 million of those are non-profits — most of them being churches. Even though non-profits account for something like 14% of all business organizations, non-profits will be getting 25% percent of the attention from a new audit program just announced by the IRS.
But first, now is probably a good time to address a question a client mine felt foolish for asking (but really shouldn't have): What is different between non-profit business and tax-exempt business?
Nothing. The terms are used interchangeably to describe a firm that does not need to pay taxes on income pursuant a part of the tax code located at 26 USC 501(c). Hence, sometimes you'll hear tax-exempt, non-profit, and 501(c) used interchangeably.
No matter what you call it, it matters little as the IRS, with the help of something called the National Research Program (NRP), will be auditing 500 tax-exempt, non-profit, and 501 (c) organizations to see if they are paying the correct amount of employment taxes.
If an audit uncovers payroll taxes weren't properly paid, non-profit, tax-exempt or 501(c) status will not save anyone responsible for making payroll deposits personally liable for those debts.
So if the church or non-profit you run is under audit, you have a lot to be personally concerned about. if you're concerned and need assistance, contact us at 888-727-8796 or email email@example.com.