re: #77 oaktree

Taxation of churches is a result of a public policy determination that it is in the public interest to give churches a tax-exemption or other tax breaks due to their charitable works and social betterment.

Property tax breaks often require the churches to show that they’re engaged in charitable works or other nonprofit activities.

The income tax break derives from whether an entity registers under Sec. 501 of the tax code.

Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

Churches can qualify under 501(c)(3) but if they violate the part in bold, they should lose their exemption.

Churches can also lose their status if they engage in actions that violate the charitable intent. See here.