The incorporation and tax exempt status of religious institutions and organizations is a highly-niched area of law, which involves dealing directly with the Internal Revenue Service. The National Legal Research Group is proud to have served our many attorney-clients with various religious-institution specific legal research.
While the majority of churches and religious places of worship are easily identifiable by the physical building, many religious organizations operate and meet outside of traditional spaces. This has the potential to cause problems when trying to qualify as a religious organization for tax exempt status. The Internal Revenue Service has mandated specific guidelines for churches and other religious entities to govern their tax status. However, unbeknownst to many – there is no requirement specifying that a church must meet all of the conditions to qualify for a religious tax exemption. The IRS provides for some flexibility, which gives various religious institutions the chance to qualify for tax exempt status, even without a brick and mortar worship space.
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Tax Exempt Laws for Religious Institutions and Organizations
Under federal law, churches and other religious institutions are required to apply for 501(c)(3) status in order to receive federal tax exemption, and to be able to receive tax deductible donations. Churches and other religious institutions are required under federal church law to file for the status within 27 months after the date of incorporation. Failure to file will cause the organization to become, by tax standards, a for-profit organization.
NLRG’s staff attorneys have extensive experience in aiding their attorney-clients with issues involving tax-exempt status, and are highly trained in the following areas of church-specific tax law:
- Application for Tax-Exempt Status:
- Drafting and Filing of Application for Exemption under 501(c)(3) (IRS Form 1023)
- Drafting and Filing of Application for Exemption under 501(a) (IRS Form 1024)
- IRS and Tax Compliance
- IRS Audits: Organizational and Personal
- IRS Appeals: Protests and Appeals Conferences
- Tax Compliance Reviews
- IRS Private Letter Rulings
- Tax Opinion Letter
- Private Foundation Issues: Distribution Requirements, Expenditure Responsibility, and Scholarship Programs
- Employment Tax Withholding Issues
- Property & Sales Tax Issues
- Charitable Solicitation and Acknowledgment
At NLRG, we have successfully provided guidance and clarity for our attorney-clients in helping to interpret federal and state church laws and qualifications for religious tax-exempt status. Additionally, we have successfully assisted with a large variety of other issues that a religious organization may face, some of which include:
- Business and Financial Operations
- Legal Issues Related to Clergy
- Legal Issues Related to Children’s ministry
- Employment Law
- Volunteer, and Internship Issues
- Compensation Practices and Compliance
- Intellectual Property
- Real Estate and Zoning Transactions
- Litigation
- Legal Audits
The National Legal Research Group offers a group of attorneys specializing in aiding clients in the representation of nonprofit and tax-exempt organizations.
If you are an attorney, contact the experts at NLRG to provide the research, paperwork and guidance you need to assist in representing your church, ministry or charitable organization clients.
Senior Research Attorney Anne Hemenway
Senior Attorney Lee Dunham
