The 'official' reason churches do not pay taxes is because they are considered non-profit organizations, and non-profit organizations are tax-exempt. It's been that way since 1913.
The IRS regulations read in part:
"TITLE 26--INTERNAL REVENUE CODE; Sec. 501 Exemption from tax on corporations, certain trusts, etc.; (c) List of exempt organizations; (3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sport competition... or for the prevention of cruelty to children or animals... no substancial part of the activities of which is carry on propoganda, or likewise attempting, to influence legislation [except as otherwise provided in subsection (h)], and which does not participate in, or intervene in (including the publishing or distributing of statements) and political campaign on behalf of (or in opposition to) any candidate for public office."
(Italics are my emphasis)
Unlike most non-profit orgs, however, churches are not required to to make their financial statements public. Most churches aren't even required to file annual reports. Unfortunately, IRS regulations do not even specifically define the word church, so it's all a muddled gray area.
Ministers of every faith are exempt from federal taxes for most of the money they spend on housing, as well as exempt from income tax withholding and can opt out of Social Security.
Puts tele-evangelism as a career into a new light, doesn't it?
The IRS regulations read in part:
"TITLE 26--INTERNAL REVENUE CODE; Sec. 501 Exemption from tax on corporations, certain trusts, etc.; (c) List of exempt organizations; (3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sport competition... or for the prevention of cruelty to children or animals... no substancial part of the activities of which is carry on propoganda, or likewise attempting, to influence legislation [except as otherwise provided in subsection (h)], and which does not participate in, or intervene in (including the publishing or distributing of statements) and political campaign on behalf of (or in opposition to) any candidate for public office."
(Italics are my emphasis)
Unlike most non-profit orgs, however, churches are not required to to make their financial statements public. Most churches aren't even required to file annual reports. Unfortunately, IRS regulations do not even specifically define the word church, so it's all a muddled gray area.
Ministers of every faith are exempt from federal taxes for most of the money they spend on housing, as well as exempt from income tax withholding and can opt out of Social Security.
Puts tele-evangelism as a career into a new light, doesn't it?
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