Churches are not tax exempt because the government grants them that privilege. Churches are tax exempt because the first amendment says that congress can make no law establishing a religion or preventing the free exercise of religion.
Because the government is blocked off from having anything to do with what churches do, that is why they can’t get involved in what is collected in the offering plates.
Because taking anything from a church’s offering plate would mean the government saying “you can’t give anything 100% to God unless you also give something to the government at the same time”. That would be imposing on the free exercise of religion.
Even with tax deductions for charitable organizations, the government, based on the first amendment, should not be able to tax the money that I donate to God and my religion.
Beyond that, I think families and individuals should be able to not count expenses toward income, but that only profit should be income. Just the same as businesses.
To pretend that housing, transportation, food, etc., is not an expense is ridiculous.
Get rid of all this manipulation by insisting on the repeal of the 16th amendment and the government funding itself only with tariffs and sales taxes.
I'm not sure if it's been challenged in court. Given today's government can do as it wills view of the courts it may be upheld even though the court would be wrong to do so.