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Reclassify Religious Organization to a Church

Did you know...

The Navigators Billy Graham Evangelistic Association Focus on the Family Gideons International Ethnos360/New Tribes Mission Voice of the Martyrs Campus Crusaders “Cru” Compassion International Precept Ministries World Vision Liberty Counsel Family Research Council American Family Association

are all classified as 'churches' or 'association of churches' with the IRS?

Most religious nonprofit organizations, including churches, have applied to the IRS for 501(c)(3) tax-exempt status thinking this was the only option. However, a better way was written into the tax code in 1969 and hundreds of churches and religious organizations have discovered the many benefits. Even well-known religious organizations reclassifying as a “church” or an “convention/association of churches” has been a trend for decades.

The Salvation Army founded in London in 1865, first US branch in 1880, tax-exempt in the US since 1933, reclassified as a “convention of churches” in 1955 after 75 years of US operation. The Navigators reclassified as a church in 2005 after 72 years. Focus on the Family reclassified as a church in 2016 after operating for almost 40 years. Billy Graham Evangelistic Association reclassified as an “association of churches” in 2015 after 66 years. Family Research Council reclassified as an “association of churches” in 2020 after 37 years.

The common question we get is, “How is that possible and why would these well-known religious organizations want to be churches?”

“This was done primarily to protect the confidentiality of our donors. In recent years there have been several occasions on which non-profit organizations—on both the right and the left—were targeted for information, including the names and personal details of their donors. In order to protect our constituents’ privacy, and because Focus does, in fact meet the definition of a church under IRS regulations we applied for and received this designation. In doing so, we have joined the company of many other Christian non-profit para-church organizations who have done likewise. Having said this, we remain committed to the highest standards of fiscal transparency and will continue to make our financial statements available.” – Paul Batura, Spokesman for Focus on the Family

Many other popular religious organizations have also reclassified with approval from the IRS including Ethnos360, Voice of the Martyrs, Campus Crusaders, Precept Ministries, World Vision, Liberty Counsel, and American Family Association.

The reasons for reclassification among these dozens of popular religious organizations vary but these three reasons are a common thread;

  1. They want to operate according to their biblical faith as an organization.
  2. They want exemptions in the federal tax code that apply only to churches or associations of churches such as mandatory exemption from yearly Form 990 tax-return filing and exemptions from paying into public insurance programs that pay for abortion, contraception, or other medical services to which the organization is conscientiously opposed.
  3. They want to protect the confidentiality of their donors since 501(c)(3) tax-exempt organizations are required to disclose to the IRS the names and addresses of donors giving over a certain amount in the year.

Forming a nonprofit entity that qualifies to operate under Section 508(c)(1)(A) can be complex. The 508 Company makes it easy.

“The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data when Republicans started making these claims, audits decreased to 370,000, or about 0.2 percent… The budget office estimated increasing I.R.S. funding would return enforcement to its 2010 levels. Doing so would result in about 1.2 million more audits; of those, 583,000 would target people making less than $75,000.”

The New York Times, “Fact-Checking the Misleading Claim About 87,000 Tax Agents”, November 6, 2022

“…For example, you educate believers on national issues that are central to their belief in the Bible as the inerrant Word of God. Specifically, you educate Christians on what the bible says in areas where they can be instrumental including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations. The bible teachings are typically affiliated with the Republican party and candidates. This disqualifies you from exemption under IRC Section 501(c)(3).”

Stephen A. Martin, IRS Director, Exempt Organizations, Rulings and Agreements

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Your contribution helps a church or religious organizations take back their First Amendment religious rights, operate according to their Biblical faith, and protect the privacy of their donors.