Can and should your religious organization seek church status with the IRS? A look at a few pros, cons, and due diligence considerations.
Through over 15 years of representing nonprofit organizations, one thing is for certain–there are infinite exempt purposes that may be served within the confines of section 501(c)(3) of the Internal Revenue Code. No matter how similarly situated for tax purposes, every tax-exempt or nonprofit organization has unique attributes of governance, operations, and focus. The same is certainly true in the religious organizations space. As my long-time religious law mentor once said, “God loved us so much there is a church, synagogue, mosque, temple, or other place of worship available for every individual to pray and seek peace.”
Some of my nonprofit clients exist primarily to advance religious purposes—religion is a core and fundamental focus of all things organizational and operational for those organizations. That focus does not, however, make those organizations a “church,” as that term is defined (or considered) by the Internal Revenue Service. As in any organization structure, there are advantages and disadvantages to church status.