CHAPTER TENReligious Organizations

Section 501(c)(3) of the Internal Revenue Code provides that an organization may be exempt from federal income tax if it is organized and operated exclusively for a religious purpose.1 Because of policy and constitutional law constraints, the IRS and the courts are usually reluctant to enter, let alone dwell in, the realm of religion. The difficulties of enforcement of the law concerning tax-exempt religious organizations by the IRS are compounded by exceptions for churches and certain other religious organizations from the requirements of filing an application for recognition of exemption2 and annual information returns,3 and by rules making examinations of churches by the IRS more difficult ...

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