First, Penny Loafer is incomplete. For a deduction of any amount, the taxpayer must have proof of donation; letterhead is acceptable, but so are photocopies of cancelled checks. Even hand written notes have, on occasion, been accepted as evidence by the Tax Court.

Second, Texan from Georgia is just flat out wrong. No church signs “on the dotted line”; 501(c)(3) status is automatically granted when a church forms. As far as the IRS is concerned there is nothing to sign; if however, the church incorporates at the state level that’s a different matter. Incorporation is available if the church officers want to protect themselves from lawsuit.

Concerning JoBob’s comments, if a church doesn’t want 501(c)(3) status, then the Godly church leaders and congregation are free to elect taxable status. Keep in mind the reason Congress created IRC Section 501 is to, in part, allow churches to get out of paying corporate income taxes on contributions given to the church.