Tax-Exemption and 501(c)(3) Recognition

Church groups (i.e., assemblies, local fellowships, and chapels) are automatically considered tax-exempt organizations due to special tax laws enacted by Congress. As a result, contributions made to a church group are considered tax deductible.

However, additional benefits can be achieved by obtaining formal recognition as a 501(c)(3) organization. This designation:

  • Provides possible exemption from state sales and property taxes.
  • Reduces U.S. postal bulk-mail rates.
  • Enables public and/or private grants to be applied for that are only available to IRS-recognized tax-exempt organizations.
  • Ensures that upon dissolution, the assets of the organization must go to another non-profit organization.

BSS can assist you in considering whether or not formal tax-exemption status makes sense in your situation and what steps need to be taken to obtain such status.