By Aubrey Jayroe
As we get toward the end of the year, we look at retired files, old records, old tithing envelopes, and other documents the church must keep and try to determine what to discard and what to keep. Can you provide help as to maintaining records and destroying them based on the IRS requirements?
As stated last month, this is part two of an article concerning the maintenance of records for the church. We are enumerating how long to maintain records according to the current regulations.
Legal, Insurance records such as insurance policies should be kept for 7 years after cancellation, leases should be kept 6 years after they expire, general contracts should be maintained 3 years after termination, and correspondence regarding legal matters should be kept 6 years.
Payroll records such as payroll registers, state unemployment tax records, earnings records, payroll tax returns (Form 941 or 944), and W-2 statements of employees should be maintained for 7 years. Garnishment records should be kept for 5 years.
Employment Records such as employment agreements, termination agreements, and retirement and pension plan documents should be maintained permanently, records relating to promotion, demotion or discharge should be kept for 5 years after termination, accident reports and worker’s compensation records should be kept for 5 years, time cards should be kept 4 years, and employment applications and I-9 Forms and W-4 Forms should be kept for 3 years.
Accounting records and documents such as annual audits, reviews, and financial statements should be kept permanently, general ledgers and tax returns should be kept 8 years, business expense records, journal entries, purchase invoices should be kept 5 years, with petty cash vouchers, cash receipts, and credit card receipts/invoices being kept for 3 years.
Electronic documents should be retained or destroyed as if they were paper documents. A church can keep records on the computer instead of actual paper documents. However, backup procedures should be done a minimum of weekly, with a copy of the backup being kept off site. Also, the administration should test the backup records periodically to ensure the data is readable and correct.
Documents should not be destroyed without the consent of the pastor and/or board. Secretarial staff must be sure to keep all necessary records and only destroy what has been authorized. Failure to comply with the proper maintenance or destruction of church records could result in possible civil and criminal sanctions as well as disciplinary actions.
For a full listing of all record retention and destruction items, please contact our office.