“Obtaining 501(c)(3) approval is not required.” With just a small amount of searching online, you will find many groups teaching that applying for 501(c)(3) is not necessary for churches because of section 508(c)(1)(a). These groups have the mistaken and misinformed notion that by simply not applying for 501(c)(3) status, the church entity is not required to meet any of the requirements of section 501 and the IRS cannot revoke its exempt status. However, this is simply not true.

Now yes, section 508(c)(1)(a) provides that churches do not have to apply for 501(c)(3) status. However, in a case heard before the United States Tax Court (Jack Lane Taylor v. Commissioner), the court ruled that “Section 508(c)(1) simply relieves churches from applying for a favorable determination letter regarding their exempt status as required by section 508(a).” Nothing in section 508(c)(1) relieves a church from having to meet the requirements of section 501(c)(3).