Recent Developments

Issues that affect ministers and churches
Coffee Shop Founded by a Pastor Fails to Qualify for Tax-Exempt Status
Federal
State:
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.

Log In For Full Access

Interested in becoming a member? Learn more.

Related Topics:
Posted: August 22, 2017
View All
from our 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.

ChurchSalary

ChurchSalary

Let ChurchSalary do the work. Get personalized compensation reports for staff and pastors.