Are Credit Card Statements Adequate Documentation

Q: Some of our staff use personal credit cards to make approved purchases for the church. When reimbursing the employee for the purchase, is the credit card statement adequate support?

A: Credit cards are certainly a convenient way to make business purchases. But complying with an accountable reimbursement plan requires adequate substantiation for all business expenses. Often times, it is hard to keep track of all those receipts, so using the credit card statement may seem like a reasonable solution.

A credit card statement can be adequate to prove that a purchase was made, but in most cases additional documentation will be needed to comply with the requirements of an accountable reimbursement plan.

For example:

• A credit card statement will identify a purchase that was made at a store, but it won’t describe the items that were included in the purchase.
• A credit card statement will identify a purchase at a restaurant, but it won’t identify the number of people participating or the business purpose of the meal.
• A credit card statement may show a recurring monthly subscription, but additional support will be needed to identify why the subscription qualifies as a necessary business expense.

For these reasons, a credit card statement by itself will usually not be sufficient to support a business expense.

For further information, see these IRS publications:

463, Travel, Entertainment, Gift, and Car Expenses.

583, Starting a Business and Keeping Records.

4221pc, Compliance Guide for 501(c)(3) Public Charities.

1828, Tax Guide for Churches and Religious Organizations.