Q&A: When Should Our Church File a Form 990?

Six guidelines to help you file.

Must our church file a Form 990 with the federal government? We have received conflicting opinions.
Your church is not required to file a Form 990 with the federal government. Section 6033 of the Internal Revenue Code requires every organization that is exempt from federal income taxes to file an annual return (Form 990) with the IRS. Form 990 consists of 89 questions requesting detailed information about the finances, service, and administration of the exempt organization. However, section 6033 exempts several organizations from the reporting requirements, including:

(1) a church, an interchurch organization of local units of a church, a convention or association of churches, an integrated auxiliary of a church (such as a men’s or women’s organization, religious school, missions society, or youth group), and certain church-controlled organizations (see Rev. Proc. 86-23)

(2) a school below college level affiliated with a church (or operated by a religious order)

(3) a mission society sponsored by or affiliated with one or more churches or church denominations, if more than one-half of the society’s activities are conducted in, or directed at persons in foreign countries

(4) an exclusively religious activity or any religious order

(5) a religious or apostolic organization described in section 501(d) of the Code

(6) and exempt organization whose annual gross receipts are normally $25,000 or less

Efforts are underway in Washington to require all religious organizations (including churches) to file an annual Form 990. You will be fully apprised of any developments in future newsletters.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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