Data from the National Center for Education Statistics suggests there are more than 20,000 religiously affiliated K-12 private schools nationwide.
Some estimate that figure has grown further since the COVID-19 pandemic ended.
And this doesn’t include churches that run preschools, which likely also number in the tens of thousands.
If your church operates a preschool or school, then take note. An important annual deadline is approaching that may affect it.
By May 15, it may need to file a Form 5578 with the Internal Revenue Service (IRS).
Don’t know what Form 5578 is?
Most churches don’t. Here’s what leaders need to know.
IRS Requirements
As attorney and senior editor Richard Hammar explains it, the IRS s requires private schools, including church-run schools and preschools, to do several things if they want to remain tax-exempt:
- First, the school needs a statement in a governing document regarding its racial nondiscrimination toward students based on race, color, and national and ethnic origin.
- Second, the school must include a statement about its nondiscriminatory policy in brochures and catalogs featuring the school’s admissions, programs, and scholarships.
- Third, the school must provide public notice regarding its policy, either throughout the entire year on a publicly accessible part of its website, or once a year via a local newspaper publication or broadcast media announcement.
- And finally, the school must file a Form 5578, which verifies with the IRS the school’s nondiscriminatory policy, and it must keep documentation demonstrating year-round compliance. (One important caveat: If a religious school operates independently of a church or denomination, and files an annual Form 990, then it instead makes its verification through Schedule E of the Form 990.)
Adequate Public Notice
Hammar notes the following IRS template can be used to provide adequate public notice:
The (name) school admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs.
