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Tax Exempt Status for Churches and Nonprofits



tax exempt

Are churches automatically exempt from federal income tax?

Most of the time...yes. As long as it is clear that your organization is definitely a church. Churches qualify for exemption from federal income tax under IRC Section 501(c)(3) and are generally eligible to receive tax-deductible contributions.

For nonprofit tax exemption information, check out this website: www.managementhelp.org

What is IRC Section 501(c)(3)

Internal Revenue Code Section 501(c)(30 is the portion of the tax code that gives certain entities the right to receive tax deductible contributions.

What are the qualifications for tax exempt status?

An organization must meet the following requirements to qualify:

  • 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
  • The organization’s purposes and activities may not be illegal or violate fundamental public policy


church tax exempt status Churches 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 there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS.

They do so by filing IRS Form 1023. This is a complicated form. I would recommend seeking a tax professional's advice if you decide to go that route.

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Additional Resources


Internal Revenue Service’s Tax Guide for Churches and Religious Organizations; A good resource to download.

Loss of your church's exemption from federal income taxation would have several consequences, see this article for more information: The Value of Tax-Exempt Status


Recommended Reading and Products:

261865: Zondervan 2009 Church and Nonprofit Tax & Financial Guide: For 2008 Returns Zondervan 2009 Church and Nonprofit Tax & Financial Guide: For 2008 Returns
By Dan Busby, CPA / Zondervan

* Taxes can be complicated, particularly for nonprofit groups! Busby's time-tested manual takes you step-by-step through tricky issues unique to these organizations---including the latest information on financial accountability, receiving and keeping tax-exempt status, charitable gifts, risk-management checklists, compensation planning, how to simplify policies and procedures, and helpful examples of required IRS filings. 224 pages, softcover.

123830: The Church Treasurer"s Manual: A Practical Guide for Managing Church Finances - Book & CD-ROM The Church Treasurer's Manual: A Practical Guide for Managing Church Finances - Book & CD-ROM
By Bruce Nuffer / lifestream

Have you been appointed church treasurer? This handy manual will help you do your job efficiently and effectively! Packed with time-saving tips and practical suggestions, it offers an easy-to-understand overview of basic accounting principles; explanation of tax regulations; record keeping forms for taxes, individual contributions, and weekly offerings; advice for handling payroll and other compensations; and more. 160 pages, softcover from Beacon Hill.

CD65970: A New Hallelujah with Free T-Shirt A New Hallelujah with Free T-Shirt
By Michael W. Smith / Provident Music Distribution

In his first live recording since 2002, Smitty offers up fresh originals and familiar favorites in passionate praise! Join the 12,000 fans and savor "A New Hallelujah" featuring the African Children's Choir; "Mighty to Save"; "I Surrender All"; "Help Is on the Way" with Israel Houghton; "Shout unto God"; "Majesty"; and more. Includes a FREE 100% cotton extra-large T-shirt.

(Additional sizes available by clicking on product link then clicking on link under "CBD Stock Number")

224XL: King of Kings, Zip Hooded Sweatshirt, Black, Extra  Large King of Kings, Zip Hooded Sweatshirt, Black, Extra Large
By Kerusso Activewear

Black zippered hoodie with white winged crown image on front and a large winged cross displayed on the back. Kangaroo pockets and drawstring hood. Adult size. Machine washable.

For more great Christian and Christmas Music, Books, Bibles, and Gifts...please click on the banner below:


The information provided on this site is not meant to substitute for the advice and covered opinions of a qualified tax professional. The materials contained on this website are provided for general information purposes only and do not constitute legal or other professional advice on any subject matter. The tax advice on freechurchaccounting.com does not fall within the IRS definition of a covered opinion; therefore, it cannot be used to avoid IRS penalties. www.freechurchaccounting.com does not accept any responsibility for any loss which may arise from reliance on information contained on this site or use of its free software.



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