In PLR 201150034, the IRS denied tax exempt status for a separate corporation formed by a church to operate its community outreach, a coffee house. The coffee house was operated every morning and only evenings when an event was held at the shop. The church and it's various groups would use the house for their meetings. The coffee house sold coffee from $2 to $4. The coffee house would rent the facility to anyone at for an hourly rate. They will allow outside caterers as long as they get to sell coffee to the attendees.
The biggest problem arises because the coffee house operates in a commercial like manner. It expects that less than 15% of its income would come frm donations.
The lesson for churches is that if you operate a bookstore, coffee house or other community outreach in a business like manner, it will create unrelated business income, at best, and cost the church it's tax exemption.
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