Should a Church Apply for 501c3 Status, or Not?

[Lisa Scurry Bolden]

Church compliance can be very confusing.  Churches are considered nonprofit entities by the federal government without necessarily applying for, and receiving 501c3 designation.  Churches are considered nonprofit without having 501c3 designation when they meet the 14 point nonprofit status test.  However, there are benefits to churches approved for 501c3 status.  One benefit is if a member or donor gives over $250.00 to the church, their giving may be scrutinized in an audit, and the member would have to prove that the church meets the 14 point nonprofit status test.  How can a member prove it?  Usually, they can't, and all of their offerings may be considered as taxable.  Another benefit of 501c3 status is that corporate grants and institutional grants want a church to be able to produce proof of having filed and received 501c3 status before they give to a church, so that their gift is sure to be tax deductible. Discussion Question:  Do you feel that churches should apply for 501c3 status even though a true church is already considered a nonprofit entity?