part 1 in a 4-part series about Church Tax Exemption
I have written before about how the IRS considers churches automatically 501c3 tax exempt. It’s how separation of church and state works in the Church’s favor.
I’m sometimes asked, “Are missional communities 501c3?”
What’s Missional Community Planting?
The conversation about planting churches through a missional community model has been going on for years now; arguably back to New Testament times. It’s hard to find a short definition, but in very broad strokes, the current approach starts with discipleship, gathers those disciples into smaller ‘families’ on mission, and generally waits for a weekly worship gathering to pop out as an almost byproduct.
DNA of the Church
Some prefer initially to call them ‘movements’ to try and strip the baggage that the word ‘church’ carries in our American culture. It’s easy for me to see that each missional community has all the DNA of the Church that Jesus had in mind. Calling a missional community movement a church isn’t a stretch for me.
Unfortunately, that cultural baggage is exactly the crux of the matter: while the IRS says churches are automatically tax exempt, they also have the right to create their own tax code definition of ‘church’. And that definition was largely formed in our country in a time where ‘church’ meant Sunday morning worship gatherings in a brick-and-mortar location.
So are Missional Communities 501c3?
My final answer is a firm maybe. The real question is actually whether the IRS considers a movement of missional communities a ‘church’ or not. If they do, then missional communities would be automatically 501c3 tax exempt. If not, the movement will likely still fall under a 501c3 nonprofit category (there are lots), but they wouldn’t be exempt automatically. They’d have to apply for 501c3 exemption like every other non-church nonprofit organization.
So if you have any concern or hesitation about whether your missional community movement falls under the IRS’ automatic tax exemption for churches, the safe bet is to apply for your 501c3 and settle the matter. You’ll get your own 501c3 letter in writing and not have to rely on the church clause.
Tune in next week for a comical but real-life look at the IRS’ brick-and-mortar hangup.