Yes. It would be kind of funny if I just ended the post here. Let me quote the IRS:
Churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and are not required to apply for and obtain recognition of exempt status from the IRS.IRS Website
But how would you prove your church is a 501(c)(3)? If you are with a denomination, they may be able to assist you. I have a link below to the United Methodist Group Ruling. These group rulings make it a little easier to prove your tax status.
What if your church is Independent or your denomination doesn’t provide this service? Here would be my guidance:
- IRS Guidance: I quoted from the IRS above and have a link below as well. Print that off and highlight that sentence.
- Articles of Incorporation or By-Laws: Your governing documents need to have that specific 501(c)(3) language. If they do, print those off as well. If they don’t (see post linked below), you should amend them.
- Letter from Leadership: Not sure if this is necessary or not, but it couldn’t hurt. For a church that’s part of a denomination, would your denomination be willing to vouch for you by saying “First Church is a part of the Methodist denomination.” If your church is independent, maybe a letter from the board?
I hope this helps. In the video, I also discuss 508(c)(1)(A) and how some think this is an alternative tax-exempt status.
- IRS Statement on churches: https://www.irs.gov/charities-non-profits/churches-integrated-auxiliaries-and-conventions-or-associations-of-churches
- IRC 508: https://www.law.cornell.edu/uscode/text/26/508
- Post on Churches being Tax Exempt: https://jctaccounting.com/2019/11/28/are-churches-tax-exempt/
- Post on 501c3 language needed: https://jctaccounting.com/2022/05/06/foundation-series-501c3-language-members-directors/
- UMC Group Ruling request: https://umgroupruling.org/
Google offers a grant for advertising. They want the church to have a 501C3 for the individual church but we are covered by a group 501C with the synod. What are the consequences of having a separate 501C? Since we don’t have to file a tax return it might not matter, but it seems like the wrong thing to do. Any comments?
It does cost around $650 to file for a 501c3. That’s not bad. You can’t file the Form 1023-EZ. You have to file the full form. That form can be confusing and may be worth hiring a CPA to complete. It took about a year for my church to be approved.
After approval, there is no additional reporting requirement, and your church will eventually be listed on the IRS website…although I think they only update the list of charities once or twice a year.