NEW!July 23, 2021
Earlier this summer, the IRS issued a now-well-publicized rejection letter against Christians Engaged (CE) for being too political to qualify for Section 501(c)(3) tax-exempt status. But, as explained in its IRS Form 1023 application, Christians Engaged operates for religious purposes, encourages people to pray for our country’s leaders, educates on moral issues with public policy, and carries out other activities with political overlays. An uproar ensued in opposition to this denial among tax practitioners, religious organizations, and politicians – with the welcome result that the IRS reversed course and summarily recognized the organization’s tax-exempt status. Was the IRS initially right or wrong? What could Christians Engaged have done better? And what can other Section 501(c)(3) organizations learn from the IRS’s bizarre handling?