The Law of Tax-Exempt Organizations, 12th Edition

CHAPTER TENReligious Organizations

• § 10.1 Constitutional Law Framework
  • (a) General Constitutional Law Principles
    • (i) Free Exercise Clause
    • (ii) Establishment Clause
    • (iii) Religious Freedom Restoration Act
    • (iv) Free Speech Considerations
  • (b) Constitutional Law and Tax Exemption
  • (c) Internal Revenue Code Provisions
• § 10.2 Federal Tax Law Definition of Religion
  • (a) Religion Defined
  • (b) Bases for Denial of Tax Exemption
  • (c) Abuse of Tax Exemption
• § 10.3 Churches and Similar Institutions
  • (a) General Principles
  • (b) Associational Test
  • (c) Principle of Respect for Autonomy
• § 10.4 Conventions or Associations of Churches
• § 10.5 Integrated Auxiliaries of Churches
• § 10.6 Mission Societies
• § 10.7 Religious Orders
• § 10.8 Apostolic Organizations
• § 10.9 Communal Groups
• § 10.10 Retreat Facilities

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 ...