What is a church? According to materials released early 2018, the venerable Christian radio and publishing ministry Focus on the Family pressed that question with the IRS, successfully garnering official reclassification as a “church.” The IRS’s willingness to accede to Focus’ request, as reflected in recently released IRS documentation, may be surprising and certainly invites further evaluation of what constitutes a “church” for legal purposes.
Why and How to Define “Church”?
As a foundational matter, why does it matter whether a faith-based organization is a “church” for government purposes? Perhaps most significantly from the IRS perspective, “churches” (and other religious institutions like synagogues and mosques; collectively identified here as “churches”) qualify as Section 501(c)(3) public charities, but they are not required to file annual IRS Form 990s like their tax-exempt counterparts. Correspondingly, while they may file IRS applications for tax-exempt recognition (or in this case, an application for reclassification), churches are deemed automatically tax-exempt per Section 508 of the Internal Revenue Code. In addition, churches may enjoy broader religious liberty protections, such as exemption from the Affordable Care Act’s mandate on insurance coverage for contraception, employment-related religious exemptions, and an easier path to property and sales tax exemptions.
But how does the government – in particular, the IRS – define a “church”? Webster’s dictionary defines a church as “a building for public…worship; a body or organization of religious believers; a denomination; a congregation.” Others may say that a church is a church—you know it when you see one. Just look for the steeple, people bowed in worship, prayers, hymns, and clergy in robes. But is a church really that easy to identify? For some religious institutions, perhaps; but for a historic radio ministry dedicated to “promoting biblical truths worldwide,” the line between church and not is much blurrier than one might think. Yet the IRS agreed to call a radio ministry a church—why?
The IRS Version of “Church”
The Internal Revenue Code recognizes the legal concept of a church but does not specifically define it. This legislative hesitancy is grounded in our nation’s religious freedoms protected by the First Amendment. Judicially speaking, courts have defined the term “church” for tax purposes as involving various factors or characteristics such as (but not necessarily all) public worship, a body or community of believers professing the same faith, observance of religious rituals, shared doctrine, religious instruction, and regular meetings. In doing so, courts have heavily relied on traditional religious practices, but with the acknowledgment that these traditional characteristics may not apply to newer or more uncommon religions.
The IRS’s analysis of what qualifies as a “church” currently relies on a “facts and circumstances” test which is articulated in the Schedule A form accompanying the IRS Form 1023 application for recognition of tax-exempt status. More specifically, and again without any requirement that an applicant satisfy all factors, Schedule A calls for information concerning several illustrative characteristics. These characteristics address various aspects of potential practice of worship, including formal creeds or doctrine, forms of worship, local worship sites, ecclesiastical government, congregational membership, sacramental practices, religious instruction, denominational affiliation, and ministerial leadership.[1] Generally speaking, the more factors satisfied, the more likely it is that the applicant will be recognized as a “church” for IRS purposes.
Focusing on Focus on the Family’s “Church” Qualification
Although Focus on the Family had filed IRS Form 990s for many years since its 1997 incorporation, it sought reclassification as a “church” in mid-2016 through a detailed IRS Form 8940 “Request for Miscellaneous Determination” that included the requisite Schedule A factors. The organization answered “Yes” to all but four questions, which concerned ministry ordination, denominational affiliation, and church charters. The IRS ultimately agreed, issued its reclassification letter for “church” status under Section 501(c)(3) of the Code.
Focus on the Family’s materials were extensive, detailing how and why it fit the IRS definition of “church,” and more specifically thirteen of the seventeen IRS factors. To do so, Focus on the Family emphasized its heavily religious nature, notwithstanding the absence of regular Sunday meetings and other trappings that one might expect for a traditional church.
For starters, and as with all churches, Focus on the Family set forth its articulated religious purpose, a Statement of Faith, “Six Pillars” of ministry based directly on Biblical principles, and membership qualities. With respect to membership, perhaps one of the more challenging elements here, the organization shared that its “membership” is comprised of its 600 employees and their families. While ordinarily it would be expected that “members” not be associated with other churches, Focus on the Family explained that it allows for multiple church membership based on its belief that the Holy Scriptures teaches cooperation between churches.
On a related note, Focus on the Family further shared that, consistent with its Christian doctrine, work is worship. At Focus on the Family, the work is to teach and equip the local church, as is common among all churches. Focus on the Family’s other forms of worship includes all-staff prayer meeting each Monday, small group gatherings each day, and monthly all-staff chapel meetings, including average attendance of approximately 750 at such monthly chapel services. The organization’s sacerdotal functions include a “Maundy Thursday” service and a commemoration of the Last Supper during Easter season, again through its members/employees as expressions of worship.
Focus on the Family has religious leadership, ecclesiastical government, and accompanying religious policies too. The Board of Directors function as an Elder Board, including the CEO/elder. The organization is elder-led, with no ordination or licensing needed based on elder model of leadership. There is also an Executive Cabinet made up of deacons and deaconesses, including the COO. The organization follows a “Formal Code of Doctrine and Discipline” based on Biblical principles like Matthew 18 (for conflict resolution), and other religious policies.
Significantly, Focus on the Family also has its own religious literature. It has published innumerable materials, all distinctly Christian, on faith, Christian worldview, Christian heritage, marriage, parenting, life challenges, social issues, and the sanctity of life. Its “distinct religious history,” as per the IRS’ Schedule A, is founder James Dobson’s reasons for founding the ministry – namely, to develop a global Christian ministry dedicated to helping families thrive. Such educational aspects also satisfy the factor for religious instruction of the young, such as Focus on the Family Institute’s leadership training for college students and its “Adventures in Odyssey,” a long-running radio drama series for children.
Does Focus on the Family Fit the “Church” Mold?
Focus on the Family has long been a broadcasting, website, and internet ministry, not what one would expect as a Sunday church-going, organ-playing, pastor-in-black-robes type of religious institution. And yet it is thoroughly religious (as are many non-church faith-based organizations). Should the IRS have recognized Focus on the Family as a church?
This application was most certainly a stretch. The IRS initially balked, asking for more information and indicating “[y]our characteristics do not appear to line up very strongly” with the IRS multi-factor test. But Focus on the Family’s counsel forcefully responded, again emphasizing the organization’s religious nature and the elasticity that should be accorded to such test, particularly in light of applicable First Amendment religious liberty considerations warranting government avoidance in defining a “church.”
The organization responsively set forth its religious mission statement and carefully documented how its Statement of Faith and Guiding Principles are both based upon Scripture and also similar to creeds of orthodox Christianity embraced by other recognized and more traditional churches. Focus also drew attention to how it understood its work as a direct manifestation and form of worship, its definite and distinct ecclesiastical government, its religious history based on the vision of founder Dr. James Dobson, and its membership and leadership as expressing theological understandings of ecclesiology and ordination as found in the New Testament. Additionally, Focus provided additional information about its own religious literature, established places of, regular rhythms of, and congregational attendance of worship services, and religious instruction materials.
The IRS asked about the amount of time and resources devoted to worship, prayer and study groups, spiritual counseling and other interpersonal religious activities. Focus on the Family was able to respond with a favorable estimate that at least 80% of its time is devoted to such religious activities. That is a striking number, considering that the organization is essentially a place of business – albeit religious business – full of employees. Focus made this 80% assertion based on its rationale that its employees are “members” whose work is their worship – i.e., daily mission and service.
The IRS also expressed concern about excessive secular broadcasting and publishing activities carried on by Focus on the Family. In reply, Focus asserted that, in fulfilling the Great Commission, its principal purpose is in fact as a church, and that its activities are directly tied to its corporate purpose. To claim that a radio ministry disqualifies Focus on the Family from church status, argued its attorneys, is to not comprehend modern day church practice, with several “mega” churches with vibrant media ministries as prime examples. Notably, Focus on the Family likened its broadcasting as a modern manner of sharing the Gospel, the same way that Jesus did in proclaiming it from a boat for better amplification. The organization further argued that the activity of publishing religious materials enjoys an even richer history in the church, with the Gutenberg Bible as the first “published” book. Focus on the Family brought this argument home by observing that differentiating these activities as “secular” or “religious” was a precarious exercise replete with First Amendment constitutional concerns. In other words, while Focus on the Family utilizes multiple strategies in communicating the Gospel, and each of which may have “secular” parallels, they could never be construed as secular if rightly understood.
How About Other Faith-Based Organizations as “Churches”?
Could other faith-based organizations garner similar “church” recognition, following Focus on the Family’s example? The IRS’s multi-factor is intentionally designed as a vague test, so a definitive answer is hard to predict. Focus on the Family was obviously quite intentional, creative, and resourceful here, such as through its definition of leadership as elders and deacons and religion-saturated policies. The organization also demonstrated integrity in being truly “religious” – such as through having regular chapel services, prayer time, and other expressions of worship. But whether that should be sufficient for an IRS “church” qualification is another question. And certainly no one can dispute that Focus on the Family is wholly dedicated to providing religious instruction to young and old alike—that is its forte.
Focus on the Family also navigated well the inherent First Amendment tensions here, namely that the IRS (or any government agency) should give wide berth to organizations’ sincere characterization of their religious nature and religious practices. Does such deference allow for abuse of the “church” classification under the Internal Revenue Code, and possibly for other purposes too such as property, sales, and employment-related religious exemptions? Perhaps, but it is far better to have the government respect and defer to good-faith assertions of sincerely held religious belief, rather than to arrogate unilateral discretionary power to declare a religious institution as sufficiently or insufficiently religious or church-like. This is particularly true within the Section 501(c)(3) context, with the IRS as a primarily revenue-collection government agency and not an arbiter of religious identity.
Our society has long viewed churches and religious institutions as appropriately set apart from government oversight and intrusion. This special treatment of churches predates the U.S. Constitution, and it was one of the most important tenets upon which American society was founded (hence the “First” amendment). Churches have historically been treated differently from a tax perspective, even before the founding of our country, and certainly since the first Internal Revenue Code’s passage in 1913. Indeed, churches have never been obligated under the First Amendment to prove their legitimacy to the government as an ongoing routine matter.
The First Amendment’s protection of the religious sphere from intrusion by the government seeks to respect the distinct purposes and limitations of the State, as compared to churches and other mediating institutions. A free society which understands the multi-faceted nature of human flourishing must weigh the benefits of having a self-limiting government against the costs of having a heavy-handed regime. In this case, the IRS apparently recognized that its role in the system was not to involve itself in theological or ecclesiological disputes concerning the legitimacy of Focus’ claim of being a church. Rather, the IRS made a good faith effort to determine whether Focus was itself acting in good faith. And, to its credit, declined to press further beyond the ambit of its legitimate authority. This is not to say whether Focus on the Family should or should not have declared itself a “church” for purposes of 501(c)(3) from a theological perspective—that debate can and should be had within the context of the religious sphere. But that debate concerns a different question from whether the government should be taking part in that debate at all.
Organizations seeking a change of classification like Focus on the Family are wise to focus on thoroughly satisfying as many of the IRS’s religious factors as possible. Reasonable minds perhaps may differ on whether Focus on the Family should have been reclassified as a “church” for IRS purposes or not. But nonetheless, it is comforting and encouraging to see the IRS thoughtfully working through the factors, Focus on the Family’s great care in addressing the IRS’s questions, and the IRS ultimately according religious liberty its due on the original question: What is a church?
[1] More specifically, Schedule A calls for the following “church” characteristics: 1) a recognized creed and form of worship; 2) a formal code of doctrine and discipline, and distinct religious history and literature; 3) a distinct ecclesiastical government; 4) regular worship services; 5) an established place of worship; 6) an established congregation; 7) membership numbers; 8) membership admission process and related membership attributes; 9) sacerdotal functions like baptisms, weddings, and funerals; 10) Sunday schools for the religious instruction of the young; 11) ministry training and schools; 12) ministry leadership;13) ordination, commissioning, or licensing of ministers; 14) denominational affiliation; 15) church charter issuance; 16) fees for church charters; and 17) any other relevant information.
