If You Have a Non-Profit Religious Organization Then You Can Obtain a 501c3 Status

Charitable organizations that have religious purposes can obtain a 501c3 status for federal tax exemption. ‘Religious’ purpose is one of the seven exempt purposes in the 501c3 section of the Internal Revenue Code (IRC) in the United States. The term ‘religious’ is not defined in the Treasury Regulations but the terms ‘charitable,’ scientific, and ‘educational’ are defined in the Treasury Regulations.

So if you want to build and run a 501c3 religious organization then you will need to meet certain requirements. At the very beginning before pursuing to obtain the status you must understand what ‘religious’ means under the 501c3 section. So your religious organization can be exempt from paying taxes by obtaining a 501c3 section. Churches and religious organizations can be exempt from paying. So know the difference between a church and a religious organization to understand the characteristics.

In this blog, you will know about how to start a 501c3 religious organization and the aspects that are associated with the subject matter. So keep reading…

What is a religious organization?

A religious organization is a term that is used by the Internal Revenue Service (IRS) in order to encompass churches and non-church public charities with various religious purposes. A religious organization that is not a church can be considered a public charity. Some entities can be included in the category of 501c3 religious organization that has the principle purpose of studying and advancing religion in many ways. Some entities that can be included such as Churches, Conventions, and associations of churches, integrated auxiliaries of churches, non-denominational ministries, interdenominational and ecumenical organizations. On the other hand, religious organizations that are not churches may include, interdenominational and ecumenical organizations or Non-denominational ministries. They could be religious schools. societies or faith-based relief organization that does not have the definition of church.

Difference between a church and a religious organization

If your organization is a place to worship then your non-profit organization may meet the definition of church and enjoy automatic tax exemption. Churches include a variety of places of worship such as temples, mosques, synagogues, and associations of churches according to the Internal Revenue Service (IRS). While determining whether an organization is a church or not, some of the characteristics that the IRS looks for are mentioned below:

• Ordained ministers 
• The assembly is a part of a recognized creed or form of worship 
• Regular religious services and assemblies are properly held. 
• A distinct religious story. 
• The non-profit organization follows a code of doctrine and discipline. 
• Members are not associated with any other denominations 
• The organization maintains places of worship 
• The organization established schools for youth and members.
  

If your organization has most of the characteristics that have been mentioned above then the IRS still might deem your non-profit organization a church.

Steps to form a religious non-profit organization

You will need to take all the required steps in order to form a 501c3 religious non-profit organization. Forming a religious non-profit organization is similar to forming other charities up to a great extent. All the necessary steps to form a non-profit organization are mentioned below:

• You must form a board of director 
• You must apply for an Employer Identification Number (EIN) for your organization. 
• File formation documents, such as articles of incorporation. 
• Make sure to apply for a federal tax exemption for your  non-profit organization. 
• Also, apply for state tax exemption. 
• Draft bylaws, which are the internal rules for running your organization. 
• Register with a fundraising agency in your state. 
• Obtain the required licenses and permits.
  

Tax-exempt criteria for a religious organization

A religious organization cannot be considered a church but it can qualify for the 501c3 tax exemption status. Religious organizations include interdenominational and ecumenical organizations, nondenominational ministries, and organizations that have the main purpose which is to study or advance religion. Religious non-profit organizations must seek formal recognition of their tax-exempt status by submitting an Application for Recognition of Exemption (Form 1023 or 1023-EZ) to the IRS. So meet the following requirements to qualify for 501(c) (3) federal tax-exempt status:

• The organization should organize and operate exclusively to pursue one or more charitable purposes. The purposes should be recognized by the Internal Revenue Service (IRS). 
• The net earnings of the organization should not serve to enrich shareholders and private individuals. 
• Lobbying cannot make up a substantial part of the activities of the religious non-profit organization. 
• The organization cannot involve in political campaigns. 
• The purpose and actions of the religious organization cannot be illegal or violate fundamental public policy.
  

Conclusion

So now you know what is a 501c3 religious organization. We have given all the necessary information so that you can form a religious non-profit organization and obtain tax exemption status. Simply fulfill all the requirements and take all the necessary steps that have been mentioned above. So obtain the 501c3 status and run a religious organization smoothly.