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Court Rejects Ministry’s Claim That It Is Exempt from All Taxes and Regulation

Attempts to become a “508(c)(1)(A)” church to avoid taxation and IRS scrutiny could have serious consequences.

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A federal court in California rejected as “frivolous” a religious ministry’s claim that it was exempt from all taxes and regulation because it was a"508(c)(1)(A)" church.

Background

The Internal Revenue Service (IRS) issued a subpoena to a Christian ministry in California as part of its investigation into the activities of the ministry. The ministry attempted to quash the subpoena on the ground that the IRS has no authority to investigate an “unregistered Private Ministry/Church,” which it claimed was exempt not only from filing requirements and taxation, but also from IRS scrutiny or inquiry.

In support of its position, the ministry referenced section 508(c)(1)(A) of the federal tax code among other provisions, which it claimed prevents the IRS from inquiring into its finances.

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Posted:
  • October 7, 2021

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