Generally, tax-exempt organizations must file an annual information return (Form 990 PDF or Form 990-EZ PDF). Churches, some church-affiliated organizations and certain other types of organizations are excepted from filing.

Religion is too important to be a government program or a political pageant. The concept of a “separation of church and state” reinforces the legal right of a free people to freely live their faith, even in public; without fear of government coercion.

The principle that government must maintain an attitude of neutrality toward religion. The First Amendment not only allows citizens the freedom to practice any religion of their choice, but also prevents the government from officially recognizing or favoring any religion.

Although a church doesn’t have to report tithe offerings or donations to the IRS, the church does have to keep track of them. If you donated more than $75, the church will supply you with a detailed statement that shows the dates and amount of your offerings.

The short answer is no. Churches, by definition, are already nonprofit organizations. Running two separate organizations can be costly as well; registered nonprofits must file a 990 with the IRS each year; this tax form for nonprofits is usually completed by an accountant.

Religious organizations are not churches but can still qualify for 501(c) (3) tax-exempt status. Religious organizations include nondenominational ministries, interdenominational and ecumenical organizations, and organizations whose main purpose is to study or advance religion.

While churches and religious organizations are exempt from federal income tax, as well as exempt from filing an annual information return (Form 990), there is authority to conduct a church IRS audit – basically civil tax inquiries and examinations of the organization’s books and records.

Unlike other 501(c)(3) organizations and charities, churches are exempt from filing financial information with the IRS, including the annual Form 990, which tracks every penny that comes into a secular nonprofit and every penny it spends.

They include:

1. Distinct legal existence.
2. Recognized creed and form of worship.
3. Definite and distinct ecclesiastical government.
4. Formal code of doctrine and discipline.
5. Distinct religious history.
6. Membership not associated with any other church or denomination.
7. Organization of ordained ministers.

Cost. The cost of an independent audit varies depending on the geographic region where the nonprofit is located and how large the organization is. Audit fees can exceed $20,000 for large nonprofits located in major urban areas. It is not unusual for an independent audit to cost $10,000, even for a small nonprofit.

The audit can be conducted internally by employees of the organization or externally by an outside Certified Public Accountant (CPA) firm.

A full audit is the highest and most credible analysis that an accountant can produce. At the conclusion of the audit, the independent accountant will attach any relevant notes and express an opinion as to the completeness of the audit and the accuracy of the results.

Auditors must be appointed upon incorporated by the incorporators or subsequently by the directors of the company within stipulated timeframes.

Auditors are generally appointed by the members to whom they report by ordinary resolution while directors have the power to appoint auditors at any time before the company’s first period for appointing auditors; following a period during which the company (being exempt from audit) did not have any auditor, at any time …

appointment of auditor for a term of five years at all. Even if an auditor has been holding his office for 5 years under the 1956 Act, it is not one term of 5 years, but 5 terms of one year each. If an auditor gets re-appointed, it does not mean the term is any longer than annual.

1. The auditing service is considered to be personal, therefore a body corporate cannot be appointed as auditor. This also ensures that the liability of the auditor does not become limited. A person holding any security of the company, carrying a voting right cannot be appointed as auditor.

Section 139(6) of the Companies Act, 2013 lays down that first auditor of a company, other than a Government company, shall be appointed by the Board of Directors within 30 days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of …

The members of a company may remove an auditor from office at any time during their term of office, or decide not to re-appoint the auditor for a further term. They must give the company 28 days’ notice of their intention to put to a general meeting a resolution to remove the auditor, or to appoint somebody else.

As per sub-section (1) of section 140, the auditor appointed under section 139 may be removed from his office before the expiry of his term only by a special resolution of the company, after obtaining the previous approval of the Central Government in that behalf.