Donations to a Church, not 501c3 recognized

[John3cpa]

Assume the following- properly substantiated cash (check) donations to a non demoninational church, incorporated as a non profit under state law, but the church never applied to be recognized by IRS as tax-exempt by filing Form 1023. Are these deductible?
The IRS Church Tax Guide states that churches that meet the requirements of 501c3 are automatically considered tax-exempt and do not have to apply to obtain recognition..."many churches seek recognition of tax-exempt status from the IRS because such recognition assures church...contributors that the church is recognized as exempt and qualifies for related tax benefits. For example, contributors...would know that their contributions genearally are tax-deductible."
I have always taken the position that if you aint on the list of recognized 501c3 orgs, then it aint deductible. What say you?

[JohnH]

"The IRS Church Tax Guide states that churches that meet the requirements of 501c3 are automatically considered tax-exempt and do not have to apply to obtain recognition..."

Then why is that wording in there? I don't try to be the arbiter of a church's intentions or tax status since that isn't my role. Clearly there's no requirment that the be on a list of any type - it's just a nice thing to have - so why would the tax preparer be interested in setting the bar higher than the IRS does?

If the client has a legitimate contribution statement from what appears to be a legitimate church, I consider it a deductible item. I'm not going to spend my time looking at any list to verify that his church meets the requirements - that's up to the client and his church to be sure they are in compliance.

[taxmandan]

Church donations

I have always taken the position that if you aint on the list of recognized 501c3 orgs, then it aint deductible. What say you?

Churches do not have to be on the 503c3 list, and many are not, mine included. The big thing about donations to a church is the requirement to substantiate ALL contributions with a letter from the church, in hand before filing the return. I don't concern myself with whether the church meets the requirements of 501c3, if they claim church status, then the letter is good enough for me to deduct donations.

[erchess]

related question

What if the Church is in a foreign country?

[JAinNC]

Being exempt does not mean that it is a "qualified charity" and that donations are tax deductible for charitable purposes? Does it? I have helped a few newly formed churches file 1023 and all attachments and our state (NC) encouraged the filings. The certificate they get from IRS states that they are a "qualified charitable organization". Perhaps for churches who wish to make certain that all areas are covered, this is the right choice to make.

Of course you have proved me wrong before. So let me have it.

Jeannie

[JohnH]

No question

There's no question that it's good for a church to get the 501(c)3 designation. It cleans up all the loose ends and makes us as tax preparers feel better knowing we're not preparing a return with a shaky charitable contribution deduction.

But being a "good thing" vs being a "required thing" is the issue here. And my position is that if the IRS doesn't require the 501(c)3 approval for making the contributions deductible, what business does the tax preparer have requiring it? After all, I haven't received any tax preparation checks from IRS in my lifetime. I intend to follow the law, but I work for the client and have a duty to enter whatever deductions they are ENTITLED TO on their return.

[JAinNC]

I don"t request that a client

taking a Sch A deduction (or a C Corp chaitable deduction) to make sure the church has anything.

I have churches who wish to go through the process for their own purposes, or the deacons or board are concerned. One established church requested info on it and I pointed out that they were not required to - but they decided to go forward with it anyway.
It was their choice.

But I got your point.

[Black Bart]

John Three C P

...the church never applied to be recognized...as tax-exempt...I have always taken the position that if you aint...recognized 501c3 orgs, then it aint deductible...What say you?

John, you're a whole lot stricter than I am (although that's not hard to be). I can only imagine the enormous number of times the following must have been said with regard to your policy:

Client: "CPA John tells me I can't take off my church donations."
Block/JH: "Say what??? And he claims to be a CPA? Siddown -- we'll deduct every cent!"