Tag Archive for Religion

IRS: Church Audit Protection Act Applies to Payroll Tax Examinations


The IRS has taken a new official position on the applicability of the Church Audit Protection Act, and it is good news for churches.

The Church Audit Protection Act (Code Section 7611 of the Internal Revenue Code) specifies that the IRS cannot initiate a church tax inquiry or examination unless certain criteria are met. In brief, there must be a reasonable belief by an appropriate high-level Treasury official that the church either is not exempt by reason of its status as a church, Read more

Church Exemption From Filing Form 990 Challenged

Cross with light shafts. Faith symbol.

Churches are exempt from having to file Form 990 with the IRS. This exemption has been in place since the early 1940’s when Form 990 was adopted, and non-profit organizations were required to file the form with the IRS. This was brought about by a concern that tax-exempt organizations were using their status to engage in unfair competition with for-profit businesses. Churches have held to be exempt, as to do so would violate the First Amendment to the Constitution.

The Freedom From Religion Foundation (FFRF) has filed suit in a federal district court in Wisconsin, alleging that it was required to file a “detailed application” (Form 1023) and pay a fee before obtaining tax exempt status, and has also been required to file “detailed, intrusive and expensive annual reports” (Form 990) in order to maintain that status. Read more