What 501(c)(3) Churches need to know about Form 990 Filing?

For federal tax purposes, the IRS recognizes the term “church” as the following:

• Temples, Mosques, Churches, and other places of worship.
• Religious organizations.
• Church conventions.
• Church associations.
• Auxiliaries of church.
• All other organizations associated with the churches.

Yes. As per the IRS, Churches come under the category of tax-exempt organizations automatically if they meet the requirements of section 501(c)(3).

Generally, If the churches meet the following requirements, the IRS will recognize them as tax-exempt organizations automatically:

• The organization should be operated specifically for religious, educational, scientific, or other charitable purposes.
• The church must not be involved in political activities, and lobbying must not be considered a vital organizational activity.
• The net income or the church’s gross receipts must not benefit any private individual or shareholders.
• The church’s activities should not be illegal or violate fundamental public policy.

They are not required to apply for tax-exempt status by filing Form 1023 or 1024.

Even though the churches are not required to apply for 501(c)(3) status, they may voluntarily apply for tax-exempt status because of the following reasons.

• The tax-exemption letter provided by the IRS provides a sense of assurance to the church leaders, members, and contributors regarding the tax-exemption status of the church and its related tax benefits.
• Like all the other public charities, the church depends upon the public’s donations. The public can feel more assured when they know that their contributions to the church are tax-deductible.

For these reasons, the churches apply for tax-exempt status voluntarily.

How to apply for 501(c)(3) status?

Follow the steps to obtain a 501(c)(3) tax-exempt status for your church.

• Step 1: Initially, the Organization should apply for an EIN by filing Form SS-4.
• Step 2: After getting the EIN, the organization should file Form 1023 with the filing fee.
• Step 3: Finally, the IRS will provide the determination letter that says the IRS recognizes your church as a tax-exempt organization.

Click here to know more about applying for the tax-exempt status.

Similar to churches, church affiliates are also considered tax-exempt automatically by the IRS.

What is an integrated auxiliary?

In order to be categorized as integrated auxiliaries by the IRS, the organizations are required to fulfill the below criteria.

• Described both as an Internal Revenue Code section 501(c)(3) organization and be a public charity under Code section 509(a)(1), (2), or (3),
• Affiliated with a church or convention or association of churches
• Receive primary financial support from internal church sources

Note: For men's and women's organizations, seminaries, mission societies, and youth groups, the third requirement is not mandatory.

• Based on IRS regulations, churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of 501(c)(3) status are not required to file an annual return or notice with the IRS. Therefore, these organizations are exempt from filing annual returns.
• Also, they are not subjected to automatic revocation of exemption for failure to file.

To strengthen the transparency and integrity among the public and contributors, the churches may choose to voluntarily file annual information returns 990-N, 990-EZ, or 990 to the IRS based on their gross receipts.

Get started with ExpressTaxExempt, to file IRS form 990 for Churches effortlessly.

• We are an IRS-authorized e-file provider for 990 returns.
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All you have to do is to create a free account and add your business information. You can just choose the tax year and add your Form details. Once done, review your form and transmit it to the IRS.

Learn more about ExpressTaxExempt and why you have to choose us for filing your 990 return.

https://www.irs.gov/charities-non-profits/churches-religious-organizations/integrated-auxiliary-of-a-church-defined

https://www.irs.gov/pub/irs-pdf/p1828.pdf