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The non-profit 501(c)(3) organization tax status is in the category of non-governmental organizations. This IRS designation protects your religious entity's religious status under the first amendment. Churches, mosques, synagogues, etc. are exempt from state and local income taxes. It also reduces the amount of federal income tax that you owe when making gifts to church members (gifts are defined as a voluntary contribution to a qualified church in the United States. A 501(c)(3) entity has the legal power to conduct religious or charitable activities and to engage in all aspects of religious or charitable activities for which it qualifies.
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