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to Church_IRS_501c3_tax_exempt.html WAT
IS A CHURCH? Government
Benefits to Churches The United States
Government gives “churches” a number of special
privileges. For example: 1. Charitable
donation deductions; 2. Churches
do not have to apply to IRS for recognition of
exemption unlike other
tax exempt organizations; 3. Social
Security exclusion election; 4. Churches
are exempt for filing annual information returns unlike other exempt
organizations; 5. Special
procedural protections from IRS examinations. The
government gives special tax benefits to churches for secular reasons,
namely,
that organized religion benefits society because such associations of
people
promote morality, community and personal responsibility, benevolence,
and,
thus, help stabilize society and advance societies morals and minds. Others
argue that the “real” reason for granting churches
such tax benefits is so that
the government can control the churches and regulate their actions,
such as
political speech (e.g., for example not being permitted to endorse
particular
political candidates). What
is a Church according to the IRS? Although
the term, “church” was not defined by Congress, the
term is intended to have a
narrower meaning than the broader term "religious
organization.” The
Internal Revenue Service utilizes a "facts and circumstances" test to
determine whether or not an organization is a
“church”. Fourteen criteria
are evaluated: 1. Does
the organization have a distinct legal existence? 2. Does
it have a recognized creed and form of worship? 3. Is
there a definite and distinct ecclesiastical government? 4. Is
there a formal code of doctrine and discipline? 5. Does
the organization have a distinct religious history? 6. Is
the membership not associated with any other church or
denomination? 7. Is
there an organization of ordained ministers? 8. Are
the ordained ministers selected after completing prescribed
studies? 9. Does
the organization have literature of its own? 10. Does
the organization have established places of worship; 11. Are
there regular congregations? 12. Are
there regular religious services? 13. Are
there Sunday schools for religious instruction of the young? 14. Are
there schools for the preparation of its ministers? Additionally,
the IRS evaluates any other facts and circumstances
which may have a
bearing upon the organization's claim for church status. From a
litigation standpoint, no court has specifically adopted the fourteen
points
test. However, many courts use it and deem it
helpful. However,
"[a]t a minimum, a church includes a body of believers or communicants
that assembles regularly in order to worship." American
Guidance
Foundation, Inc. v. To
be considered a Church, all or most of the 14 factors need not
be
present. No single factor is controlling (because new
organizations that
would have difficulty meeting all 14 criteria). Not every
factor will
necessarily be relevant. At the least, the term church includes those
organizations recognized under common meaning and usage of the word,
“church.” However,
in many cases, the key factor in whether or not an organization is
classified
as a church is the presence or absence of a congregation. In
other words,
is the organization's membership a coherent group of individuals or
families
that regularly join together (primarily in person rather than by
television or
radio) to accomplish religious purposes or shared beliefs? Views
on the Government Defining What
Constitutes a Church
Critics, a minority in number, complain that to define what is a
church, is to
control it. It is to make a theological
determination. It is to
take the Lordship away from Christ and give it to the
government. That it
is better to not be tax exempt or not allow a tax deductible donation,
if
necessary, than to allow the government to have jurisdiction over
church
matters, i.e., to entangle church and state. In
other words, God
does not need a tax exemption to run His church. Other
commentators see this matter differently. They argue that
regulation over
matters such as money, taxation, contracts, and business records are
secular in
nature. They state that IRS regulation is necessary to
challenge a
variety of tax evasion schemes whereby a group merely pretends to be a
church. That when the government grants a tax
exemption or
deductible donation, it is allowing a party to keep money that would
otherwise
have to be paid to the government, and, therefore, the government may
set
conditions for such. A
congregation and its leadership ought to pray about whether or not they
ought
to seek IRS recognition as a tax exempt church. See
related article
on seeking
formal IRS 501(c)(3) recognition.
Disclaimer: This author of
this article is not rendering legal, accounting or other professional
advice or
service. Professional advice on specific issues ought to be
sought from a
retained accountant, lawyer, or other professional. Return
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