- Jun 14, 2004
- 4,168
- 2,089
- Country
- United States
- Faith
- Christian
- Marital Status
- Married
Many churches and "church-like" organizations apply for the exemption primarily to protect their contributors just in case their activities cause them to be ruled "non-church" at some point by the IRS. If the IRS should rule against them based on their non-church activities, the IRS could also charge taxes due on their contributors.
When we went through this with our church, the biggest benefit we as a board saw was actually for our members. While it is extremely unlikely our church will do anything to lose tax exempt status, it is probable some of our members will be IRS audited at some point in time. By applying for recognition of 501(c)3 status, you end up on the IRS public listing of tax exempt organizations. That removes one headache from a member's audit if the IRS decides to look at charitable donations during their audit. In the end the member would be fine either way and donations to the church would be ruled tax deductible, but it could save them some steps proving that our church actually exists and wasn't made up to create a deduction. (Yes, people really do that!).
Upvote
0