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jeffandkellie
Sep 1, 2010, 10:05 AM
A group of us have come together to form a new church are getting conflicting information about the EIN, Federal Tax Number, Incorperating and the 501c3.

We have now our EIN and setup as a church. Some are saying that this is our Federal tax exempt number and others are saying we need to Incorperate and file the 501c3.
:confused::confused::confused:
I am very confused with all of this and trying to get the answers. We do not have much money right now and am trying to accomplish this with as little money as needed.

morgaine300
Sep 2, 2010, 01:11 AM
Well, tax-exempt stuff can get quite complicated and is a specialty area. I've worked with a couple of them, but I'm certainly no expert. (And have never worked with a church.) But I can usually dig stuff up at the IRS.

To begin with, an EIN has diddly to do with being tax-exempt. There isn't any special "exempt number." (There may be for your state, however.) So you've got the only number you need. If you apply for tax-exempt status, you just apply and you either get it or you don't, but you get a statement saying you're exempt, not a number. And it's a Form 1023.

Churches are actually exempt from even filing this form. However... first of all, it's a good idea anyway, just so that you have that official proof from the IRS that you are indeed tax-exempt. (For instance, people making contributions want to know this.) I was the treasurer for a rinky-dink little community organization once with very little income to speak of, and even we had official tax-exempt status.

The other "however" is that you have to actually be a church. The fact that you've chosen to call yourself one may not be recognized by them as such.

Some suggested reading material:
This is a list of FAQs - you can read whichever ones are of interest to you:
Frequently Asked Questions about Tax-Exempt Organizations (http://www.irs.gov/charities/content/0,,id=96986,00.html)

There's a thing they call a Tax-Exempt Organization Kit:
Tax-Exempt Organizations Tax Kit (http://www.irs.gov/charities/article/0,,id=96774,00.html)
I didn't really look to see what was in this, but it's supposed to be all the forms and publications. There's a nice list in the Form 1023 instructions about what they considered to be the "general" assumptions of what a church is.

And there's Pub 557 which is the main one covering exempt organizations. I'd look over Sec 1 & 2. When you get to the political stuff, skip to pg. 19. When you get to the education stuff you can skip to pg. 26 on religious organizations. Churches are also considered public charities rather than private foundations, which is on pg. 28.

I'm not aware of anything saying you have to be incorporated. I know you don't have to be incorporated just to be a 501c3. Whether there's any exception for certain types I don't know. I didn't see anything, but I also have never read that entire publication before. One thing I did notice, under the list of stuff they consider to be the "general" stuff they'd expect of a church, it listed "distinct legal existance." Whether that's implying incorporation or not I don't know. However, it also says you don't have to fulfill everything in that list - it's just kind of a generalized thing to say "you're pretty much like this" even if you don't fit every one. Perhaps being incorporated would simply help.

You might also try posting this on the religion forum:
https://www.askmehelpdesk.com/religion/
If someone there is really involved in their church, they might know something that your average accountant would never know.