Churches, on the other hand are under the code which is a mandatory exemption. The code says that a church that operated as a legitimate church does not have to apply for tax-exempt status. Churches are under the Mandatory Exemption and are not required to apply for tax exemption. Churches are not tax-exempt, rather they are nontaxable. Automatically nontaxable. Tax-exemption is a requested status of a tax possibility, non taxability is a status of one not subject to taxation. Our forefathers did observe "under God" upon themselves, this nation, and God's churches.