URJ Member Congregations Tax Exemption (501(c)(3) - Issues and Answers
Must member congregations obtain 501 (c) (3) status from the IRS to accept charitable contributions that are deductible for Federal Income Tax purposes by donors?
Our congregations are not required by the tax code to obtain separate 501(c)(3) status for contributions to them to be tax-deductible by donors, as long as all other requirements for deductibility are met. They are automatically considered tax-exempt by the IRS.
Are URJ member congregations covered by the URJ's 501 (c) (3) IRS tax determination status?
Congregations do not automatically receive 501(c)(3) status by virtue of being a URJ member. However, many of our member congregations have been able to use the URJ's official 501(c)(3) status to satisfy the requests of potential granting organizations, corporate "matching" programs, other donors, and various other persons or entities for "official" tax status--even though, technically, they should not need one.
A congregation can obtain a "member in good standing" letter and the URJ's IRS 501(c)(3) tax determination letter from Carole Goldberg, the Director of the URJ's MUM department. In many cases, these satisfy the donor's request. Please note that our national affiliates (principally, Women of Reform Judaism (WRJ), Men of Reform Judaism (MRJ), and Association of Reform Zionists of America (ARZA), are part of the URJ's 501 (c)(3) umbrella.
In most cases, this documentation fulfills the request of the donor.
What if a potential grantor, "matching" gift contributor, or other donor who requests confirmation of 501(c)(3) status does not accept the URJ "member in good standing" letter and our 501(c)(3) tax determination letter from the IRS?
Because of recent IRS rulings, institutional donors, particularly foundations and financial services firms, are getting finicky about the documentation that they need to process "matching" and other gifts. When one of them does not accept the URJ documentation, the congregation can request from the IRS a LTR 4163C ((877.829.5500), which states the name, address, and 9-digit Federal Tax ID number of the congregation, and that, for federal income tax purposes only, the congregation is treated as an organization described in section 501(c)(3) even though it does not have such formal recognition. Some congregations may opt to do this instead of first requesting and submitting the URJ documentation.
Would it be possible for URJ member congregations to be covered by URJ's 501 (c) (3) IRS tax determination status?
No. This would require the URJ to obtain a group exemption number, as do several of the other church "umbrella" organizations. However, we've concluded that the URJ is unlikely to meet the criteria for obtaining a group exemption, which requires that, among other things, that the URJ has "operating control" of our members, which it does not have.|
Do congregations need 501(c)(3) status to obtain local and state tax exemption status?
Each municipality and state has their own rules and regulations about sales, property and other tax exemption. Some states, in fact, do not grant tax exemptions to any religious organization. Although 501(c) (3) status may help obtain local and state exemptions if they exist, the congregation must apply separately for these.
Please note that this document is meant to be a general guideline for URJ members, prepared by the Chief Financial Officer in consultation with URJ's General Counsel. Congregations requiring more specific and specialized tax advice should contact their local tax advisor.