Key point 10-18.05. The tax code permits denominational agencies to obtain a "group exemption" for affiliated churches and organizations that establishes their exemption from federal income tax. While such rulings require the denominational agency to exercise "control" over its affiliates, the IRS and the courts have concluded that this "control" is ecclesiastical in nature and as a result a group exemption ruling does not make a denominational agency liable for the obligations of its affiliates.
Recognition of exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code may be obtained on a group basis for "subordinate organizations" affiliated with and under the supervision or control of a "central organization." 308 Rev. Proc. 80-27, 1980-1 C.B. 677. This procedure relieves each of the subordinates covered by a ...
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