Is your church viewed as a “church” by the IRS?
Churches that meet the requirements of the Internal Revenue Code section 501(c)(3) are automatically considered tax exempt. This means that churches are not required to apply for and obtain recognition of tax-exempt status from the IRS.
Even so, many churches seek tax-exempt recognition from the IRS simply because it provides assurance that financial contributions to the church would generally be tax-deductible.
The term church is found, but not specifically defined, in the Internal Revenue Code. The IRS has compiled a list of certain characteristics that are generally attributed to churches. They include:
- Distinct legal existence
- Recognized creed and form of worship
- Definite and distinct ecclesiastical government
- Formal code of doctrine and discipline
- Distinct religious history
- Membership not associated with any other church or denomination Organization of ordained ministers
- Ordained ministers selected after completing prescribed courses of study Literature of its own
- Established places of workshop
- Regular congregations
- Regular religious services
- Sunday schools for the religious instruction of the young
- Schools for the preparation of its members
Recently, the IRS denied several organizations church status when the organizations applied for tax-exempt recognition as a church. The IRS concluded that the organizations failed to meet the legal definition of “church.”
One of the organizations that applied for recognition as a “church” was denied because its worship services were conducted solely by teleconference. The IRS concluded that worship by teleconference does not bring people together for worship, and that “sitting at home holding a ‘service’ over the telephone does not meet the more restrictive definition of a ‘church.’”
I have to question why the IRS denied that a group of people coming together via phone conference was not a “church” when they do not even define a “church” is specific terms. I believe that in today’s environment, with travel required of so many people’s jobs, that it is a great service to be able to worship in an environment that is best for you. The IRS, in my opinion, does not always view things with a rational perspective.