While churches may be automatically recognized as tax-exempt, there are several reasons why many churches apply for tax-exemption.

        • Having 501(c)(3) status allows churches the ability to guarantee that tithes, offerings, and donations are tax deductible to donors, because there is written proof from the IRS that the church is a registered charity.
        • Many states do not automatically guarantee sales tax exemption without a 501(c)(3) letter from the IRS.
        • Bulk mailing rates and most grants will not be extended to your church or ministry without 501(c)(3) status.

Applying for tax-exempt status may also desirable for churches that are not affiliated with a larger denomination. In some states, churches that have obtained 501(c)(3) status are automatically exempt from state taxes as well.

Note that as a 501(c)(3) tax-exemt entity, churches are mandated to comply with various 501(c)(3) requirements, as well.

IRS guidline