Separation of Church and Income Tax – The Churches Tax Exempt Status

Anna Nebraska


In the United States democracy which is branded by the separation of church and state, the tax exempt status of churches quickly becomes a controversial topic. To what extent can the government intervene in this sector, but on the flip side to what extent can the churches be a completely separate entity. This research document will focus on the rules and requirements governing the participation of religious organizations as defined in IRC § 501(c)(3) as well as review tax laws and federal court decisions from the past, to apply them to issues that we face today. Finally, based on the accumulation of the information gathered, the main question of whether or not the government should be in the business of taxing churches or if they should remain tax exempt entities will be discussed.