Data Book Brief: A Look at Tax-Exempt Activity in 2024 

Unpacking the numbers behind America’s tax-exempt sector. 

As part of our annual tradition at MinistryWatch, we’re diving into the Internal Revenue Service’s latest Data Book, a detailed account of the agency’s operations between October 2023 and September 2024.

Photo by Sean Lee / Unsplash / Creative Commons

While most of the U.S. tax base consists of individuals and businesses, the report offers a broad statistical snapshot of the nonprofit world, including religious ministries, charities, and other tax-exempt organizations.

But beyond the nonprofit sector, the year marked a major top-line milestone as the IRS collected over $5 trillion in revenue for the first time—a 9% increase over the previous year.

Not all tax-exempt activity is captured in the Data Book. Churches, including synagogues, temples, mosques, and their integrated auxiliaries, are automatically considered tax-exempt under Section 501(c)(3) and aren’t required to file annual information returns like Form 990s. However, other religious organizations that are not classified as churches but bring in more than $5,000 in annual gross receipts are generally required to file.

Many religious organizations still choose to apply for formal recognition of their tax-exempt status to boost donor confidence and transparency. It’s also common practice in the ministry world to voluntarily file Form 990s and post them publicly.

The IRS recognized 2 million organizations as tax-exempt in 2024, including new determinations, and received over 1.8 million tax-exempt returns. Most came from California (with 172,600), Texas (167,195), New York (124,267), and Florida (100,580).

Nearly 1.9 million organizations are exempt under Section 501(c) of the tax code, including 1.54 million classified religious, charitable, and similar organizations—a group that grew by more than 34,000 organizations in 2024, surpassing last year’s 1.51 million total, and continuing an upward trend from 1.48 million in 2022 and 1.4 million in 2021 and 2020.

The next largest tax-exempt subgroups are social welfare organizations (71,178), business leagues (58,627), and social and recreation clubs (46,441).

The IRS processed 136,323 applications for tax-exempt status in 2024, approving about 87% of the pool. Within the religious, charitable, and similar organizations category, more than 130,000 applications were closed. The IRS approved the vast majority (113,312), while only 74 were denied and 16,703 were marked as “other,” meaning they were withdrawn, incomplete, or required more information.

The IRS also collected $1.94 billion in unrelated business income tax (UBIT) from tax-exempt organizations, a slight drop from the prior year. Although this is a very small slice of the overall tax landscape, accounting for less than 0.05% of total collections, UBIT is an important lever for the IRS to keep track of commercial activity unrelated to a nonprofit’s mission.

Audits targeting tax-exempt entities remained minimal in 2024. The IRS examined around 7,000 tax-exempt organizations, employee retirement plans, government entities, tax-exempt bonds, and related taxable returns. Of those, just 666 were part of the Form 990 series, the main annual information return for nonprofits, marking a decline from 1,020 in 2023 and 1,343 in 2022.

Another 134 Form 990-T returns were audited for unrelated business income, and 210 Form 4720 filings were examined for excise taxes on tax-exempt organizations and related individuals. An additional 72 audits targeted Forms 990-PF, 1041-A, 1120-POL, and 5227, related to private foundations, charitable trusts, and political organizations.

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