Churches and Schools

Learn about IRS definitions of churches and schools, and the advantages of church and school status.

What is a Church?

The IRS has its own definition of a church. There are definite advantages to having church status. The principal advantage is that you never have to file tax returns with the IRS. Therefore, the IRS does not easily grant church status. What does the IRS say about obtaining church status for your nonprofit?

Does a Church Need 501c3 Status?

The IRS has its own definition of a church. We have had clients over the years who have applied for church status but for whom the IRS has said, “We’ll give you 501c3 status as a mission, ministry, or a bible fellowship, but we will not grant your church status.” Now, if these churches had given tax-deductible receipts to its congregants, believing they were churches would those receipts have been valid? Absolutely not. Upon an audit, those congregants’ deductions could have been disallowed.

What is a School?

The IRS has its own definition of a school. If you fit within the definition, you must apply for school status. If you do not fit within the definition, you cannot apply for school status. In neither case do you have a choice. You are either in or out, so to speak.