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Churches do NOT need a 501(c)3 Exemption
to receive Tax-deductible Gifts?

from a Church Treasurer

[COMMENT:   The information below was a stunner to me.  I had had 40 years of ministry, much of it parish related, and did not find out the truth until I was 75 years old.   The information below is from the indicated government websites.   The bracketed emphases were made by the treasurer, "RCS"].    I put a ? in the title, not because I doubt the issue, but to disclaim any responsibility for how anyone else might use this information.  Check it out for yourself, and make your own decisions.  See further comments at the end. 

In addition to the material below, go to http://chalcedon.edu/research/articles/do-churches-need-501c3-status/ for an extended article on the matter.    NOTE: the link to the Alliance Defense Fund is broken.  Go instead to

And, also, this extraordinary article by Gary North, on whether corporations as such are valid for Christians and churches to enter into.  Or are they developments out of the secularization of government???       E. Fox] 


Publication 526 (2009), Charitable Contributions

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.

[NOTE: This indicates that churches do not need to apply to the IRS in order for donors to receive tax deductions. This publication does not, however, define churches. That definition is found in publication 557. RCS]

Publication 557 (2010) Tax-Exempt Status for your Organization:

Religious Organizations
To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines.

That the particular religious beliefs of the organization are truly and sincerely held.

That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy.

Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs.

a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church.

[NOTE: This has come up several times during my time on the Vestry at St. Xxxxxx's.  We have generally felt that there was no particular benefit to filing with the IRS.  There is nothing in this definition that excludes discussion of political topics or candidates.  Here is the definition of Political Organization from elsewhere in publication 557.  RCS]:

Political Organization Income Tax Return

 Generally, a political organization is treated as an organization exempt from tax. Certain political organizations, however, must file an annual income tax return, Form 1120-POL, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527.

Political organization.   A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.

Exempt function.   An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. It also includes certain office expenses of a holder of public office or an office in a political organization.
[I (the parish treasurer) am not a lawyer, but it seems on the face of it that this does not apply to us since we are not organized primarily for this purpose.  Political organizations are themselves tax-exempt but donations to them are not deductible.  Also, there are filing requirements for political organizations that do not apply to churches.  On the whole, I think we are safe as long as we do not make political discussions a primary focus -- a situation I would object to on grounds other than tax considerations. RCS]

[E. Fox Comment:  This information came to me as I was priest-in-charge of St. Luke's Reformed Episcopal Church in Santa Ana, CA for about three years, ending April 2012. 
      All this was caused by Lyndon Johnson, when as senator in the 1950's, he wanted to shut down critiques from churches.  The big problem is the government telling a church what it can or cannot discuss.  Or putting pressure on a church to conform.  It makes a helpful distinction, however, above in the red print, between belief and action.  It says that it will not challenge beliefs, only actions.  That is valid if it in no way inhibits the free exchange of ideas, no matter how objectionable.  One should be free to support abortion, for example, but not to practice it.
     Politics is inherently religious, and religion is inherently political.  It cannot be otherwise.  God, if He exists, owns the whole of the cosmos, not just the "spiritual" part of it.  "Jesus is Lord" is a political claim.  We Christians have not been faithful to that truth for two centuries or more.  That must end
     Go also to http://chalcedon.edu/research/articles/do-churches-need-501c3-status/

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Date Posted - 03/23/2012   -   Date Last Edited - 08/24/2012