On Friday, July 25, the IRS informed an unnamed organization which claims to work “for the advancement of Christianity and for other charitable purposes” that it is not eligible for federal tax exemption as a church under US tax code Section 501(c)(3).
The group stated that it holds “street ministry” activities and wants to rent a facility and purchase musical equipment for indoor services. The group also said it has tentative plans to launch a Christian school once it is “fully established.” The group’s board is composed of its pastor (founder and chairman of the board), his wife (co-chair, secretary, and treasurer), one of their sons (assistant secretary), and another son.
There is no definition of “church” in the US tax code, but federal courts have composed a list of fourteen characteristics that determine whether an organization qualifies as a church for tax exemption purposes.
The IRS named the qualities which it considers to be key – an established congregation, an ordained ministry, regular services, religious training for youth, and the “dissemination of a doctrinal code.” The tax agency said that based on the information provided in the organization’s application, the group lacks all of the qualities set out above. The agency allowed that the organization has a small congregation, but said that since it “is not actively engaged in trying to acquire new members,” it is not eligible for exemption.
The IRS said group’s application was not sufficiently descriptive of its street ministry, financial history, financial plans for the future, or plans to make its presence publicly known in order to acquire new members. The tax agency concluded that the group is not technically functioning as a church or charity. Furthermore, the IRS said, there was no proof provided that the organization does not exist for its members’ private benefit. Because of this, the IRS said that the organization cannot qualify for exemption even if it does conduct activities “in furtherance of an exempt purpose.”
To read the IRS determination letter for yourself, click here.
Information taken from www.philanthropy.com
--Kelsey Luffman is a Research Assistant at Christian Foundation Grants (www.christianfoundationgrants.com) which is subscription database of foundations that provide grants to faith based organizations. iDonate.com is a website (www.iDonate.com) that allows ministries to receive non cash gifts online.