As with all things in America, we are under the Laws, Rules, and Regulations of the United States Government and do abide
by them. However, please read the following information concerning non-profit religious entities:
Most churches in America have organized as "501c3 tax-exempt religious organizations." This is a fairly recent
trend that has only been going on for about fifty years. Churches were only added to section 501c3 of the tax code in 1954.
We can thank Sen. Lyndon B. Johnson for that. Johnson was no ally of the church. As part of his political agenda, Johnson
had it in mind to silence the church and eliminate the significant influence the church had always had on shaping "public
Although Johnson proffered this as a "favor" to churches, the favor also came with strings attached (more like
shackles). One need not look far to see the devastating effects 501c3 acceptance has had to the church, and the consequent
restrictions placed upon any 501c3 church. 501c3 churches are prohibited from addressing, in any tangible way, the vital issues
of the day.
For a 501c3 church to openly speak out, or organize in opposition to, anything that the government declares "legal,"
even if it is immoral (e.g. abortion, homosexuality, etc.), that church will jeopardize its tax exempt status. The 501c3 has
had a "chilling effect" upon the free speech rights of the church. LBJ was a shrewd and cunning politician who seemed
to well-appreciate how easily many of the clergy would sell out.
Did the church ever need to seek permission from the government to be exempt from taxes? Were churches prior to 1954 taxable?
No, churches have never been taxable. To be taxable a church would first need to be under the jurisdiction, and therefore
under the taxing authority, of the government. The First Amendment clearly places the church outside the jurisdiction of the
civil government: "Congress shall make NO LAW respecting an establishment of religion, nor prohibiting the free exercise
Religion cannot be free if you have to pay the government, through taxation, to exercise it. Since churches aren't taxable
in the first place, why do so many of them go to the IRS and seek permission to be tax-exempt? It occurs out of:
* Ignorance ("We didn't know any better")
* Bandwagon logic ("Everyone else is doing it")
* Professional advice (many attorneys and CPAs recommend it)
Does the law require, or even encourage, a church to organize as a 501c3? To answer that question let's turn to what the
IRS itself has to say.
Churches Need Not Apply
In order to be considered for tax-exempt status by the IRS an organization must fill out and submit IRS Form 1023 and
1024. However, note what the IRS says regarding churches and church ministries, in Publication 557:
Some organizations are not required to file Form 1023. These include:
Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated
auxiliaries of a church, such as a mens' or womens' organization, religious school, mission society, or youth group. These
organizations are exempt automatically if they meet the requirements of section 501(c)(3).
Churches Are Automatically Tax-Exempt
According to IRS Code § 508(c)(1)(A):
Special rules with respect to section 501(c)(3) organizations.
(a) New organizations must notify secretary that they are applying for recognition of section 501(c)(3) status.
(1) Mandatory exceptions. Subsections (a) and (b) shall not apply to:
(A) churches, their integrated auxiliaries, and conventions or associations of churches.
This is referred to as the "mandatory exception" rule. Thus, we see from the IRS' own publications, and the
tax code, that it is completely unnecessary for any church to apply for tax-exempt status. In the IRS' own words a church
is automatically tax-exempt.
Churches Are Automatically Tax-Deductible
And what about tax-deductibility? Doesn't a church still need to become a 501c3 so that contributions to it can be taken
as a tax deduction? The answer is no! According to IRS Publication 526:
Organizations That Qualify To Receive Deductible Contributions
You can deduct your contributions only if you make them to a qualified organization. To become a qualified organization,
most organizations other than churches and governments, as described below, must apply to the IRS.
In the IRS' own words a church is automatically tax-deductible.
Churches Have a Mandatory Exception To Filing Tax Returns
Not only is it completely unnecessary for any church to seek 501c3 status, to do so becomes a grant of jurisdiction to
the IRS by any church that obtains that State favor. In the words of Steve Nestor, IRS Sr. Revenue Officer (ret.):
"I am not the only IRS employee who's wondered why churches go to the government and seek permission to be exempted
from a tax they didn't owe to begin with, and to seek a tax deductible status that they've always had anyway. Many of us have
marveled at how church leaders want to be regulated and controlled by an agency of government that most Americans have prayed
would just get out of their lives. Churches are in an amazingly unique position, but they don't seem to know or appreciate
the implications of what it would mean to be free of government control."
I rest my case, if you have any doubts about your donations being tax-deductible, please contact your Tax Preparer.