We are interested in supporting a local church, but it is unable to document its tax-exempt status. What do you recommend?

Congress has enacted special tax laws that apply to places of worship, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment.

According to the IRS, churches and other places of worship that meet the requirements of IRC Section 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.

Although your local church may not have documentation to share, if it meets the requirements the following requirements to qualify for tax-exempt status, you can treat the grant as a qualifying distribution:

  • the organization must be organized and operated exclusively for religious, educational, scientific or other charitable purposes;
  • net earnings may not inure to the benefit of any private individual or shareholder;
  • no substantial part of its activity may be attempting to influence legislation;
  • the organization may not intervene in political campaigns; and
  • the organization’s purposes and activities may not be illegal or violate fundamental public policy.

Although there is no requirement to do so, many places of worship (or their parent organizations) seek recognition of tax-exempt status from the IRS because this recognition assures church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits.

 

Still have questions?

Members can access staff experts through our Q&A service by calling 202-580-6560, or post a question to the member community to hear form peers in the field.

Explore our Q&A archive