IRS Focus on "Church" Definition

Describe a church. The venerable Christian radio and publishing organization Focus on the Family pressed the issue with the IRS, according to records made public in early 2018, and was successful in getting official designation as a "church." The IRS's willingness to grant Focus' request, as evidenced by recently made public church IRS application documents, may come as a surprise and calls for additional analysis of what qualifies as a "church" under the law. 

THE CHURCH AS DEFINED BY THE IRS

The Internal Revenue Code acknowledges the existence of churches under law but does not define them. This legislative reluctance is rooted in the First Amendment's protection of religious liberty in our country. For tax purposes, the term "church" has been defined by courts to include a variety of elements or characteristics, including (but not limited to) public worship, a group or community of believers professing the same religion, observance of religious customs, shared doctrine, religious instruction, and regular gatherings.

Courts have done this by mainly relying on established religious traditions while acknowledging that certain newer or less widespread religions may not have these basic traits.

Currently, the church IRS application uses "facts and circumstances" criteria to determine what constitutes a "church," which is described in the Schedule A form that is included with the IRS Form 1023 application for recognition of tax-exempt status. More specifically, Schedule A requests information about several illustrative traits, again without any need that an applicant satisfies all parameters.

These traits speak to a variety of aspects of potential worship, such as formal creeds or doctrine, forms of worship, places of worship close to one's home, ecclesiastical governance, congregational membership, sacramental customs, religious instruction, denominational affiliation, and ministerial leadership. [1] In general, the likelihood that the applicant will be recognized as a "church" for church IRS application purposes increases with the number of satisfying requirements.

WHAT DO YOU MEAN BY "CHURCHES" OR OTHER FAITH-BASED ORGANIZATIONS?

Could other religious institutions emulate Focus on the Family's success in gaining similar "church" recognition? The multi-factor test used by the church IRS application is purposefully unclear, making it difficult to predict a conclusive outcome. Focus on the Family was highly deliberate, imaginative, and innovative in this case, as seen by its definition of leadership as elders and deacons and its policies that are heavily influenced by religion.

The group also showed that it was actually "religious," as seen by its regular chapel services, time set aside for prayer, and other acts of devotion. But whether that should be enough to qualify as a "church" for church IRS application purposes is a different matter. Nobody can deny that Focus on the Family is committed to teaching religion to people of all ages; this is its area of expertise.

The inherent First Amendment conflicts, in this case, were also skillfully handled by Focus on the Family; notably, the church IRS application (or any other government agency) should allow groups' truthful descriptions of their religious nature and religious practices a wide berth. Does this respect allow for the abuse of the Internal Revenue Code's "church" categorization as well as perhaps other uses like property, sales, and employment-related religious exemptions?

Perhaps, but the government should accept and defer to good-faith claims of sincerely held religious belief than arrogate unrestrained discretionary power to determine whether a religious institution is sufficiently religious or church-like. This is especially relevant in the context of Section 501(c)(3) because the IRS is essentially a government body responsible for collecting taxes rather than deciding on questions of religious affiliation.

Churches and other religious institutions have traditionally been seen by our culture as being appropriately exempt from monitoring and governmental interference. An essential foundation of American civilization (thus the "First" amendment) was the unique treatment of churches, which predates the U.S. Constitution. Even before our nation was founded and most definitely ever since the first Internal Revenue Code was passed in 1913, churches have historically been handled differently from a tax perspective. Churches have never been required by the First Amendment to routinely and continuously demonstrate their validity to the government.

The First Amendment's protection of religion from government intervention aims to respect the State's specific goals and constraints in comparison to churches and other mediating institutions. A free society that recognizes the complex nature of human flourishing must balance the advantages of having a self-restraining government against the drawbacks of having a tyrannical one.

In this instance, the church's IRS application appears to have understood that it had no business becoming involved in theological or ecclesiological debates over the veracity of Focus' claim to be a church. Instead, the IRS attempted in good faith to evaluate if Focus was acting honestly. To its credit, it also decided against exerting further pressure outside the scope of its legal powers. This is not to imply that, from a theological standpoint, Focus on the Family should or should not have called itself a "church" for 501(c)(3) purposes; that discussion may and should be conducted within the context of religion. But that discussion is focused on a different issue than whether or not the government ought to participate in that discussion.

Focus for the Family is a good example of an organization that would do well to concentrate on fully satisfying as many of the IRS's religious requirements as they can. On whether Focus on the Family should have been classed as a "church" for IRS reasons or not, reasonable people might disagree. However, it is reassuring and energizing to see the IRS carefully considering the relevant factors, Focus on the Family taking great care to respond to the IRS's inquiries, and the church IRS application ultimately granting religious liberty its due concerning the initial query: What is a church?