IRS Denies Exempt Status to “Church”

A family – Mom, Dad and two sons – applied for tax exempt status for a “church” founded as a nonprofit corporation by Dad.  The IRS determination letter notes that the church does not hold regular services, does not have a group of people who gather for services, and is not served by a pastor.  The application indicated that the organization conducts some “street ministries” but did not provide details.  The application also indicated that the organization might buy a building and might, someday, maintain a religious school, but again provided no details about when or how these things might happen.  The application did not include the required financial information and indicated “no financial data to report at this time . . . .”

The final determination letter provides a careful review of the criteria used by the IRS to determine whether an organization qualifies for exempt status as a church.  The letter notes that the IRC does not include a definition of church and then discusses case law that has developed criteria the IRS uses in determining whether a church exists and cases that have applied those criteria in reviewing IRS decisions.

For a Chronicle of Philanthropy article by Grant Williams on the decision, go here.

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