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.

What kind of tax exempt status does a church have?

Tax-Exempt Status Churches and religious organizations, like many other charitable organizations, qualify for exemption from federal income tax under IRC Section 501(c)(3) and are generally eligible to receive tax-deductible contributions.

Can a church donate to a church without a 501c3?

When donors are audited, they must be able to prove the church they donated to is a qualified 501c3 organization. That’s the reason many donors may choose to avoid churches without a 501c3 authorization. Churches that haven’t applied for 501c3 status but receive tax-exempt donations aren’t in compliance with the law.

Is the IRS required to collect fee from churches?

The IRS is required to collect a non-refundable fee from any organization seeking a determination of tax-exempt status under IRC Section 501(c)(3). Although churches are not required by law to file an application for exemption, if they choose to do so voluntarily, they’re required to pay the fee for determination.

What does the Bible say about a 501c3 corporation?

-Matthew 13:22 A 501(c)(3) corporation is a non-profit organization that gains a tax-exempt status under section 501(c) in the U.S. Internal Revenue (IRS) Code [26 U.S.C. §501(c)].

Why do nonprofit organizations need to be a 501c3?

The majority of other tax codes don’t provide this benefit; so many organizations choose to apply for a 501c3 status because it’s most appealing to donors, whom they rely on to fund their activities. The IRS requires that nonprofit organizations must meet specific requirements before earning 501c3 status.