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FRAUD

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Each year, the amount of money stolen from churches exceeds what churches give to missions.  Let that sink in.

30% of churches are the victim of fraud/embezzlement each year.  Most is never detected and when it is, 80% does not get reported to law enforcement.  The loss was $39 billion in 2014 and expected to be $80 billion by 2025, with the average loss being $120,000.

Keep in mind – there is no such thing as a small fraud.  They are just testing the system before going bigger.

Most church leaders find it hard to believe that someone they trusted would steal from the church.   However, often it is the most trusted and “loyal” person in the church.

The biggest issue contributing to fraud is a lack of segregation of duties.  During this season, when churches have mostly been shut down, it is important to make sure that internal controls are not relaxed. It’s not enough to have written policies, you need to enforce and audit them often.

If nearly 1/3 of churches are victims of fraud, what are the chances right now that you are one of them?

The best deterrence is to create the perception that they will get caught.  If you need more ideas on setting up internal controls, please let us know.  Your church insurance company may also be a good resource.

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Tax Scams

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Tax scams run year-round.  You may receive a telephone call claiming to be someone from the IRS.  The call usually includes a threat that the police are on their way to arrest you, unless you pay immediately using a debit or prepaid card.  They may also ask for your banking information so that you can get your long-awaited refund.  The IRS does not operate this way.  They always contact you first via the mail.

There is also a new scam via email.  It will likely include language such as “electronic tax return reminder”.   The IRS does not send out emails regarding tax refunds or other sensitive information.  Do not respond, no matter how legitimate it appears to be.  The email may even contain a one-time password to access your files.  Using the password will infect your computer with malware.

If you owe the IRS money or if they have a question regarding your refund, they will mail you a notice.

If you have been contacted, and feel it is a scam, call the Treasury Inspector General at 800-366-4484. If you receive a call and you do owe money, call the IRS at 800-829-1040 and talk to an agent.  You can also send any suspicious emails to: phishing@irs.gov.