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It is a little known fact that, according to the constitutional principle of separation of church and state, a bona-fide church does not have to apply for tax-exempt status with the IRS. In its Tax Guide for Churches, the IRS states:

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.

So what’s the catch? Why not just tell everyone you are a church and start taking tax-deductible contributions?

There are two main reasons: Read more »

For your contributions to be deductible, the group you are contributing to must meet certain requirements. These include:

• Non-Profit – This means that the group must not be set up to financially enrich any individuals. The funds raised by the group must be used for the purposes of the group and not for the private benefit of any person. The best way for a group to demonstrate this requirement is to incorporate as a non-profit corporation in the state it is located. If the group doesn’t want to go through the time and expense of incorporating, it is easy to set up non-profit Articles of Association which accomplish pretty much the same thing, and can still be used to establish bank accounts, leases, etc. in the name of the group. (Contact me if you would like assistance doing this for your group.)
• Religious – The group must be organized for genuine spiritual purposes (“religious” in IRS terminology). Consistent with the U.S. Constitution, there is no doctrinal test – a group cannot be rejected based on what type of belief or religion it represents. Instead, the IRS is looking for the group to conform to the characteristics of a religion, such as: Read more »

If you are a member of a non-profit spiritual group (meaning that money coming in is used to support the group, not make someone rich), then you may be able to deduct these contributions on your tax return:

• Donations of Money Dues, donations, and any other money you contribute to help support the group count as charitable contributions. Note that this does not include things for which you get something tangible in return. For example, if you buy a book it’s not a donation because you got something in return. But “intangible religious benefits” are OK, so if your donation was for a ritual, it’s deductible.
• Donations of Items If you donate something like a censer or a computer to your group, you can deduct its value.
• Expenses for the Group If you incur expenses for your group, like buy candles for a ritual and don’t get reimbursed, you can deduct these as well.
• Mileage You can deduct 14 cents per mile you drive as part of your volunteer service to your group. For example, if you officiate in a ritual or help with cleanup you can deduct the miles you drive to and from the event.

Read more »

• Rick Warren’s Saddleback Church takes in over $35 Million in contributions per year and doesn’t pay a penny in taxes.
• His parishoners also deducted those contributions from their own taxes, and Rick Warren himself pays no tax on his salary from the church.
• Pat Robertson’s “Operation Blessing” group received a $500,000 government grant to give to churches affected by Hurricane Katrina.
• Thousands of people donate clothing and household items to the Salvation Army (whose mission is to “preach the gospel of Jesus Christ”) and receive tax deductions in the millions of dollars each year.

What do all these groups have in common? Christianity, of course. In spite of the Constitution’s prohibition against “law respecting the establishment of religion” the U.S. government provides billions of dollars in subsidies and tax relief to Christian churches every year.

Their best-kept secret Read more »