Churches are automatically considered tax-exempt under IRC Section 501(c)(3) and are not required to apply for and obtain recognition of tax-exempt status from the IRS. However, many churches seek formal recognition of their tax-exempt status from the IRS to assure church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits, such as the ability for contributors to deduct their donations on their federal income tax returns.
Churches, their integrated auxiliaries, and conventions or associations of churches are not required to file Form 1023, Application for Recognition of Exemption, to be treated as tax-exempt. However, obtaining formal recognition can provide certain benefits, including advance assurance to contributors that their donations are tax-deductible.
If a church is part of a parent organization that holds a group exemption letter, the church may already be recognized as tax-exempt under the group exemption process. In this case, the church does not need to take further action to obtain recognition of tax-exempt status.
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Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR | Consulting
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Tel: (888) 421.0101
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (888) 421-0101
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com