Federal tax law treats churches differently from every other kind of charity. A church does not need IRS permission to be tax-exempt, does not file an annual information return, and has special protections in IRS audits. It still has to play by most of the same rules as other 501(c)(3) organizations. This guide explains both sides, so a pastor or founding board can make a clear decision about whether to apply.
Churches are exempt without applying
Most new charities must file Form 1023 or Form 1023-EZ and receive a determination letter, the IRS letter confirming exempt status. Churches are the main exception. IRC 508(c)(1)(A) says the application requirement does not apply to "churches, their integrated auxiliaries, and conventions or associations of churches."
Publication 1828 puts it plainly: churches that meet the requirements of section 501(c)(3) "are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS."
That does not make every church exempt. The church still has to meet the 501(c)(3) rules: organized and operated exclusively for religious or other charitable purposes, no private inurement (net earnings benefiting insiders), no substantial lobbying, no political campaign activity, and no illegal purposes. Our 501(c)(3) requirements guide covers each one.
Religious organizations that are not churches are treated differently. A nondenominational ministry, a religious publisher or a Bible study network generally must apply like any other charity, unless its gross receipts are normally not more than $5,000 a year.
What counts as a church
The Internal Revenue Code uses the word "church" without defining it. Publication 1828 lists characteristics that the IRS and the courts have developed:
- Distinct legal existence
- Recognized creed and form of worship
- Definite and distinct ecclesiastical government
- Formal code of doctrine and discipline
- Distinct religious history
- Membership not associated with any other church or denomination
- Organization of ordained ministers
- Ordained ministers selected after completing prescribed courses of study
- Literature of its own
- Established places of worship
- Regular congregations
- Regular religious services
- Sunday schools for the religious instruction of the young
- Schools for the preparation of its ministers
No single item is required. The IRS looks at a combination of these characteristics with all other facts. It does not judge the content of a faith's beliefs, as long as they are sincerely held and the practices are not illegal or contrary to clear public policy. "Church" here includes mosques, synagogues, temples and other houses of worship.
A regular congregation matters. In practice, an organization whose main activity is broadcasting, publishing or online content, without a group of people who gather for worship, often has trouble being treated as a church. It may still qualify as a religious organization, but it will usually need to apply.
Why many churches apply anyway
Applying is optional, and many churches do it. Publication 1828 explains why: recognition "assures church leaders, members and contributors that the church is recognized as exempt and qualifies for related tax benefits."
In practice, a determination letter helps when:
- Donors want proof. Churches that have not applied do not appear in the IRS Tax Exempt Organization Search, so a donor or a donor-advised fund sponsor may ask for a letter.
- Banks, landlords and grantmakers ask. Many will request a determination letter before opening accounts, making grants or offering nonprofit rates.
- State agencies ask. Some state sales or property tax exemptions start with federal recognition; see state tax exemption.
How to apply. A church files Form 1023, not Form 1023-EZ. Rev. Proc. 2026-5 lists churches among the organizations that cannot use the shorter form. The user fee for Form 1023 is $600 under Appendix A of Rev. Proc. 2026-5, paid on Pay.gov, and Publication 1828 confirms that a church that applies voluntarily must pay it.
Timing is more forgiving. Most charities must apply within 27 months of formation to be exempt back to their start date (see the 27-month rule). Publication 1828 notes that a church may obtain recognition from its date of formation even when it applies later than that.
Group rulings. If your church belongs to a denomination, ask whether the denomination holds a group exemption that already covers you. If you are on its list, you do not need your own application.
Integrated auxiliaries
An integrated auxiliary is an organization related to a church that shares many of a church's special rules. Under Publication 1828, the IRS generally treats an organization as an integrated auxiliary if it:
- Is a 501(c)(3) organization and a public charity under 509(a)(1), (2) or (3);
- Is affiliated with a church or a convention or association of churches; and
- Receives its financial support primarily from internal church sources rather than public or government sources.
Men's and women's organizations, seminaries, mission societies and youth groups that meet the first two requirements are treated as integrated auxiliaries even without the internal-support test. The detailed rules are in Treasury Regulation 1.6033-2(h). Integrated auxiliaries also need not apply for exemption and need not file Form 990.
No Form 990
IRC 6033(a)(3)(A)(i) excludes churches, their integrated auxiliaries, and conventions or associations of churches from the annual information return requirement. That means no Form 990, 990-EZ or 990-N. Because there is no required return, the automatic revocation rule for organizations that miss three years of filings does not apply to churches. (Other organizations should read our automatic revocation guide.)
Not filing Form 990 does not mean filing nothing. A church with employees files payroll returns such as Form 941 and Forms W-2, issues Forms 1099 where required, and gives donors the written acknowledgments described in our donation receipts guide.
Rules that still apply
The political campaign ban. Like every 501(c)(3), a church may not participate or intervene in any political campaign for or against a candidate for public office. Publication 1828 gives examples: endorsing a candidate from the pulpit or in an official church newsletter is prohibited, while nonpartisan voter education and candidate forums run evenhandedly can be permitted. Pastors may speak for themselves outside official church functions. See our guide to political activity rules.
The lobbying limit. A church may speak on legislation and moral issues, but lobbying cannot be a substantial part of its activities.
Unrelated business income tax (UBIT). Income from a trade or business that is regularly carried on and not substantially related to the church's exempt purpose is taxable. If a church has gross income of $1,000 or more from unrelated business in a year, it must file Form 990-T. Publication 1828 notes a special rule giving a parish or similar local unit a specific deduction equal to the lower of $1,000 or its unrelated business gross income. Our unrelated business income guide explains the exceptions.
A hypothetical downtown congregation with a parking lot. On Sundays, members park free. On weekdays, the church sells spaces to commuters and collects $4,800 in a year.
- Parking for members attending services: not unrelated business, according to Publication 1828.
- Weekday parking sold to the public: unrelated business income, because parking fees are not treated as rent from real property.
- Gross income of $4,800 is at least $1,000, so the church files Form 990-T for that year.
If the church instead leased the lot to a parking company for a fixed rent, Publication 1828 says those payments would generally be rent from real property and not subject to the tax.
Employment taxes. Churches generally must withhold and pay income and FICA taxes for employees, with special rules for ministers.
Audit protections. IRC 7611 limits when and how the IRS may begin a church tax inquiry or examination. These protections apply to churches but, under Publication 1828, not to integrated auxiliaries.
Frequently asked questions
Can a new church that meets in a living room be a church for tax purposes?
Possibly. The IRS weighs the characteristics together, and a small new congregation may lack several of them. Regular services, a defined congregation, a creed and some form of governance help. If your status is uncertain, applying on Form 1023 gives you a definite answer.
Do donors need a determination letter to deduct gifts to our church?
No. Gifts to a qualifying church are deductible whether or not it has applied. Donors still need a written acknowledgment for any single gift of $250 or more, and many prefer the certainty of a letter.
Can our church file Form 1023-EZ to save time?
No. Churches and conventions or associations of churches are on the list of organizations that cannot use Form 1023-EZ. You must file the full Form 1023.
Does a church school or daycare need its own application?
It depends on how it is organized. A program run inside the church entity shares the church's status. A separately incorporated school or daycare is a separate organization, and whether it must apply or file Form 990 depends on whether it qualifies as an integrated auxiliary or another exempt category.
Can the IRS revoke a church's exemption?
Yes. A church that violates the 501(c)(3) rules, for example by intervening in a political campaign or allowing private inurement, can lose its exemption, subject to the special church audit procedures.
Sources
- IRS: Publication 1828, Tax Guide for Churches and Religious Organizations (Rev. 8-2015). irs.gov
- Cornell LII: 26 U.S. Code 508, Special rules with respect to section 501(c)(3) organizations. law.cornell.edu
- Cornell LII: 26 U.S. Code 6033, Returns by exempt organizations. law.cornell.edu
- IRS: Rev. Proc. 2026-5, Internal Revenue Bulletin 2026-1. irs.gov
- IRS: Publication 557, Tax-Exempt Status for Your Organization (Rev. January 2025). irs.gov
IRS forms, fees and inflation-adjusted amounts change. We review this page when the IRS publishes new instructions.
501Nonprofit.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.
