It's right there in the IRS tax code, section 501(c)(3): "Churches and religious organizations are generally exempt from income tax and receive other favorable treatment under the tax law." The founder of Universal Life Church, Kirby Hensley, saw that clause and ran with it, turning literally millions of people into ministers of his church and encouraging them to declare themselves tax exempt.
Not surprisingly, Hensley's battle with the IRS didn't go his way. The government accused Hensley of operating a business, not a church, and charged him for failing to file the proper tax returns from 1978 to 1980.
In 1984, the IRS yanked Universal Life Church's tax-exempt status. In 2000, the church finally settled with the government and paid a million dollar-plus fine.
What did Kirby Hensley have to say about that? Nothing - he passed away in 1999 and never had to acknowledge any wrong-doing. By the way, Universal Life Church is still going strong and, in keeping with the times, now offers online ordination!