Jump directly to the content

Coffee Shop Founded by a Pastor Fails to Qualify for Tax-Exempt Status

Key point. The operation of a coffee shop as a church outreach to the community will not constitute a basis for tax-exempt status if the operation of the coffee shop is overly commercialized to the extent that the religious purpose is minimal.

The IRS ruled that a "coffee shop" founded by the pastor of a church for personal evangelism in an urban area did not qualify for tax-exempt status since it was indistinguishable in operation from secular, for-profit coffee shops. A nonprofit corporation (the "Corporation") was formed for the following four purposes:

  1. Proclaim earnestly the gospel message and to urge its personal acceptance.
  2. Promote prayer, Bible study, missions, Christian fellowship, evangelism, Christian service and encouraging, in every possible way, a lifetime commitment to Christ.
  3. Provide a forum in which the Gospel of Jesus Christ can be discussed with non-believers outside of a formal church setting.

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
  • August 22, 2017

Related ResourcesVisit Store

2020 Church & Clergy Tax Guide
2020 Church & Clergy Tax Guide
Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Church Finance
Church Finance
Learn about budgeting, financial reporting, tax compliance, insurance coverage, and more.
Politics and the Church
Politics and the Church
Tax and legal guidelines faith-based organizations need to know before jumping into the political fray.
20 Finance Questions Churches Ask
20 Finance Questions Churches Ask
Richard Hammar answers relevant tax and finance questions for church leaders.