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In the United States, most churches file for 501(c)3 tax exemption. Some churches choose not to, sometimes as a matter of belief that they should not be "licensed" in any way by a government.

It is my understanding that contributions to such a church are still exempt from income tax, but I would expect closer examination by the IRS of returns claiming such exemptions.

Would such a church, with no official government status, be authorized to accept tax-exempt charitable deductions? How about other tax preferences common to churches, such as real estate and sales tax exemptions?

It is my understanding that in most countries, a church would be required to file for the exemption or would not have it. I have heard the claim that there is an automatic exemption for a church in the US, but it seems to be a controversial claim. I suspect there may be unsettled legal issues related to this, so I ask for a statement of likely interpretation.

References:

original question on Christianity

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    Donations to a 501(c)(3) organization (or a church that meets the requirements even if it has not registered with tRS) are not tax-exempt, they are potentially deductible from income. If you make such a donation, you cannot simply subtract off the donations from your gross income in order to arrive at your taxable income; you have to complete Schedule A and decide whether it is better to deduct the sum total of itemized deductions or choose the standard deduction (which may well turn out to he larger). So, there might not be a explicit deduction for your donation. – Dilip Sarwate Oct 16 '18 at 5:22
  • @DilipSarwate The donations are, of course, tax-exempt to the organization. I assumed it was being asked from the organization's perspective, but re-reading the question there is some confusing wording, glad you clarified from the donor's perspective. – Hart CO Oct 16 '18 at 15:36
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In Publication 1828 (excerpt below) the IRS outlines automatic exemption for churches that meet 501(c)(3) requirements regardless of whether they apply for tax-exempt status.

Automatic Exemption for Churches
Churches that meet the requirements of IRC Section 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.
Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because this recognition assures church leaders, members and contributors that the church is recognized as exempt and qualifies for related tax benefits. For example, contributors to a church that has been recognized as tax exempt would know that their contributions generally are tax-deductible.

Real estate and sales tax exemptions vary by state, but the parsonage exclusion would be applicable for the pastor of a church in the situation you described.

  • If I want to receive a donation acknowledgment letter from the church for IRS wouldn’t the church have to be a legally registered charitable organization? – Kris Oct 16 '18 at 3:31
  • Surely the church can say "we are a church and to the best of our knowledge and belief donations to us can qualify as charitable donations". Obviously they cannot claim to be a 501(C)3 organization, because they are not, and they have no registration number. If IRS has a standard form for acknowledgement letters, they probably could not use it without crossing out some of the text. – disciple Oct 16 '18 at 15:11
  • @Kris From my reading automatic exemption has no impact on their ability to furnish donation acknowledgement letters that satisfy IRS requirements. – Hart CO Oct 16 '18 at 15:20
  • @disciple it seems IRS GRANTS THE CHARITABLE ORG STATUS TO CHURCHES REGARDLESS of there having ever filed for 501c3 or not. Thus an acknowledgment letter stating the church is a charitable org could be given to a donor. Donations larger than 250. require letter if the donor wishes to deduct – Kris Oct 16 '18 at 20:08
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    @Kris Thanks. I checked the IRS website, and it seems there is no standard form. Most 501c3 filers would probably include their EIN, but a) it is not required and b) in my scenario they don't have one. Let's go to Christianity's UPPER ROOM chat site if you have additional comments. – disciple Oct 16 '18 at 21:08

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