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  • Writer's pictureMichael Wright

Understanding the IRS Classification of Churches

The Internal Revenue Service (IRS) holds a neutral stance when it comes to religious denominations and beliefs. Whether it's a Christian church, a Jewish Synagogue, or a Mosque, the IRS categorizes them all under the broad umbrella of "churches." However, this classification is not arbitrary; there are specific criteria that determine what qualifies as a church in the eyes of the IRS.

What Makes a Church?

One of the fundamental requirements set by the IRS is the concept of a distinct legal existence. This means that the entity seeking church status must have obtained a Tax Identification Number (TIN) or an Employer Identification Number (EIN) and filed the necessary paperwork to establish itself as a separate legal entity.

This distinction is crucial because it signifies that the organization operates independently from its members. By fulfilling these formalities, a religious institution demonstrates its commitment to transparency and adherence to legal procedures.

User Insights and Additional Information

The IRS does not make any separations as to denomination or beliefs and classifies Christian places of worship, Jewish Synagogues, and Mosques as churches. There are several requirements that determine what a church is according to the IRS.

Understanding Church Status: More than a Building

Contrary to common perception, being recognized as a church by the IRS extends beyond the physical structure where religious activities take place. It encompasses a set of responsibilities and privileges related to tax-exempt status and compliance with federal regulations.

A church, in the eyes of the IRS, carries a significant social and communal role, often serving as a focal point for spiritual guidance, community support, and charitable activities. As such, meeting the IRS criteria for church status is not merely a formality but a testament to an organization's commitment to its congregation and the broader society.

Tax-Exempt Status

Churches and religious organizations, like many other charitable organizations, qualify for exemption from federal income tax under IRC Section 501(c)(3) and are generally eligible to receive tax-deductible contributions. To qualify for tax-exempt status, the organization must meet the following requirements :

the organization must be organized and operated exclusively for religious,

educational, scientific or other charitable purposes;

net earnings may not inure to the benefit of any private individual or shareholder;

no substantial part of its activity may be attempting to influence legislation;

the organization may not intervene in political campaigns; and

the organization’s purposes and activities may not be illegal or violate

fundamental public policy.

The IRS also specifies that certain requirements must be met in addition to those mentioned above in order to qualify for automatic exempt status.

The IRS does not make any separations as to denomination or beliefs and classifies, Christian places worship, Jewish Synagogues, Mosque as churches. There are several requirements that determine what a church is according to the IRS. 

•Distinct legal existence the means that a Tax Id Number or EIN has been obtained and the paperwork has been filed with the state

•Recognized creed and form of worship 

•Definite and distinct ecclesiastical government

•Formal code of doctrine and discipline

•Distinct religious history

•Organization of ordained ministers

•Ordained ministers selected after completing prescribed courses of study

•Literature of its own

•Membership not associated with any other church or denomination Many denominations, associations and groups of churches practice and teach that the best way to start a new church is to gather members from other churches to start the new church plant. While this helps the new church establish and support itself faster there is one major flaw with this method. The members of the new church plant MUST submit in writing a membership transfer request to the new church, the new church must then send it to the “partner church “and have the members removed from their directory and books. Again, this a majority rule type of situation. For instance a new church plant is started with 100 members from other churches, as long as the original 100 members make up the majority of the new church it is NOT a Church in the eyes of the IRS and therefore MUST file for tax exempt status, and file an annual 990 report

•Established places of worship - a physical place building, that has an address. I have talked to pastors who state that “We hold church in different parks in the community “a park, street corner, etc. is NOT an established PLACE as defined by the IRS

•Regular congregations this means that the MAJORITY of the people are the same for the MAJORITY of the services (majority means at least 80%) 

Regular religious services Regular and consistent= the same place, same time and same schedule 

Sunday schools for the religious instruction of the young. 

Schools for the preparation of its members - school be held at the church, at a denominational college or university. There has to be an organized system and method of teaching, there must be a standardized curriculum and there also has to be qualifications to enroll and completion. What this means is that a church MUST have, what boils down to an orientation for new members. It would be wise to have this type of instruction documented along with a system in place that records who has attended this orientation.  

Remember, whether you worship in a grand cathedral, a humble chapel, or a serene mosque, the IRS sees them all as churches, recognizing the vital role they play in our communities.

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