501c3 Tax Exempt Status and the Church

Many organizations in America each year apply for and receive tax-exempt recognition from the Internal Revenue Service under Internal Revenue Code section 501c3. What types of organizations qualify for IRS tax-exempt status? According to IRS Publication 557:

An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes.

Charitable.

Religious.

Educational.

Scientific.

Literary.

Testing for public safety.

Fostering national or international amateur sports competition.

The prevention of cruelty to children or animals.

In many cases it's probably a good thing to have certain types of organizations that fulfill a useful purpose in society, and which are not operated for profit, to be exempted from federal taxation. Such entities are often referred to as "charitable organizations."

The rationale the courts have long used in exempting charitable organizations from taxation is that such entities often relieve the government of having to provide many similar services (feeding the poor, etc.). As such, charitable organizations also relieve taxpayers of having to pay additional taxes for such services. The courts have also acknowledged that private charitable organizations have usually provided their services far more efficiently, more competently, and more cost effectively.

The focus of our discussion here, however, is not about charitable organizations, but for the Christian church and whether it is proper, or even necessary, for a church to seek tax-exempt recognition from the IRS, and what happens to a church if it does seek 501c3 recognition.

If you ask the opinion of an attorney or CPA they will almost always urge you to seek 501c3 status. If you believe that "licensed professionals" have been an asset to the Church of the Lord Jesus Christ, then you will likely do whatever they tell you to do.

If, on the other hand, you have come to realize that attorneys are part of the problem in America, then you should know that there is a great deal of information that they will never disclose to you about what 501c3 status does to your church, and why you don't even need it.

To learn more about whether it is even necessary for a church to seek 501c3 status from the IRS in order to be treated as exempt from income taxes, click on the "NEXT" button below.