All churches in the USA get tax breaks from the government. Break after break after break. It is not a surprise that many people have made themselves rich by starting their own church.
Writing for a penny a word is ridiculous. If a man really wanted to make a million dollars, the best way to do it would be start his own religion. – L. Ron Hubbard the founder of Scientology (as listed in Wikiquote)
I have thought about starting a church many times. However, I can’t bring myself to do it. I have this weird idea you should actually provide some product or service when people give you money.
The IRS even has a special 32 page publication that details all of the tax benefits for churches. The title is tax guide for Churches and Religious Organizations. The very first paragraph explains why…
Congress has enacted special tax laws applicable to churches, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment of the Constitution of the United States. Churches and religious organizations are generally exempt from income tax and receive other favorable treatment under the tax law; however, certain income of a church or religious organization may be subject to tax, such as income from an unrelated business.
“…in recognition of their unique status…” what? It then goes on to say with rights guaranteed by the First Amendment of the Constitution. Let me think, what does the First Amendment say…
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Where does it say, “No church shall pay taxes?” It only says that the government will stay out of religion and I think that’s great. Now if only we can get religion to stay out of government. Sorry, I digress…. back to taxes…
The IRS publication goes on to tell the reader that the term church is not defined by the Internal Revenue Code (IRC). The Internal Revenue Code is all of the laws made by the federal government about US taxes. So, if you can create an organization and convince the IRS it is a church or religious organization then you can get the same tax benefits.
501(c)(3)
This is a rule in the IRC that most charities use to avoid paying taxes…
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
It says that this type of organization cannot attempt to influence legislation, participate in campaign activity or provide benefit (inure) to any shareholder or individual. Good rules, all of them. The last thing we would want to do is create a special tax exempt status for a group that tries to influence legislation or gives a bulk of its money to one person or a leader – that would be bad. Anyone that has ever applied for 501(c)(3) status know that it is a pain and takes some work to comply with all of the rules. However, if you are a church the IRS says….
Churches that meet the requirements of IRC 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.
In plain English… If you are a church then you just qualify without having to actually show that you qualify and you don’t even need to bother with messy paperwork, you’re a church. Furthermore, we will never actually check to see if you are following the rules because as we said in the first paragraph you are special just like it says in the constitution. This is just one example of many that I will discuss in the following weeks.