Is a Church a Nonprofit?
Everyone is talking about Benny Hinn and the IRS checkup. I love the fact that Benny Hinn quickly responded to the IRS' unexpected visit by writing an information letter to his donors. He even went further by apologizing to his donors for the public embarrassment. Benny Hinn was very transparent in his public communication and opened the doors of the ministry to the IRS with welcome arms. To avoid unexpected visits by the IRS continue reading why churches should not become 501c3.
All churches physically located in a building and offering weekly worship services are automatically considered nonprofit. Churches do not have to be a 501(c)3 to receive nonprofit status; the church is grandfathered in as a nonprofit. According to federal guidelines by the IRS (Internal Revenue Service), churches are automatically qualified to receive nonprofit status and exercise exemption from federal taxes. The IRS does however expect churches to operate with the same fiduciary principles as nonprofits. In other words, basilicas are to keep proper accounting books with appropriate payables and receivables.
Furthermore, churches that have opted to gain 501(c)3 status voluntarily open their doors to the IRS' unannounced and uninvited audits. Nonprofits that hold 501(c)3 status or any other status must function according to federal guidelines, and the IRS may audit such nonprofits at any time including basilicas that hold 501(c)3 status. Churches that are not 501(c)3 are protected by the State church rule, which forbids the IRS from auditing a church without just cause and a whistle-blower witness.
