Christian Coffee Shop Denied Tax Exempt Status

The IRS refuses to give a Christian non-profit coffee shot tax exempt status despite its mission to evangelize non-believers and donate all profits to charity. 

The coffee shop's purpose is simple -- create a safe place "where believers could interact with non-believers in a safe and friendly environment to convey the Gospel in a non-confrontational manner in word and deed."

A nearby church provided the startup funds for the shop as part of its evangelistic outreach program. 

The shop gives away 100 percent of its profits to "community ministries, other local, national or international non-profits or organizations, or those in financial need."

However, the IRS rejected the shop's request to be 501(c)(3) certified because it believes it too closely resembles a for-profit business.

The IRS sent a letter to the shop saying the main focus was not spreading the gospel, but on simply operating a coffee shop. 

"While donating funds to other non-profit communications is charitable," the letter says, "your main focus is the operation of a coffee shop."

The letter continues, "You are open to the public Monday through Friday from 6 a.m. to 8 p.m. and Saturday from 7 a.m. to 8 p.m. You have free WiFi and power outlets throughout for customer use. You have space that can be used for gatherings such as meetings and parties. You have a selection of food and beverage items that can be purchased at the coffee shop. Your hours and menu can be found on your website and your Executive Summary indicates that you believe the location of the coffee house is ideal because there are no other similar businesses downtown. Therefore, the operation of your coffee shop to raise funds is a commercial activity, not a charitable activity."

The coffee shop has the opportunity to protest the decision and fight for tax exempt status.