The Pastor's Study
QUESTION: What does recognition of tax exemption mean?
ANSWER: Eligibility for tax-exempt status is different from recognition of that status. When the IRS recognizes the exempt status of an organization, it makes a written determination that the entity constitutes a tax-exempt organization. When exercising this function, the IRS reviews, analyzes, and interprets the law, and agrees with the organization that it is exempt. The process is almost always begun by the organization's filing an application for recognition of tax-exempt status with the IRS.