[kirkguardian]

There are numerous web sites touting the alleged tax immunity and asset protection features of the corporation sole, and there are numerous peddlers who would like to help relieve you of your hard-earned money.

Many well-meaning but overly-trusting Christians have already been taken advantage of. Some of them are already suffering onerous legal consequences for it. Knowing what I now know, it would be irresponsible for me not to "sound the trumpet" on this scam.

The corporation sole peddlers' theory goes that since the corporation sole is often used for "religious" and "ecclesiastical" purposes, anyone can form a corporation sole and, thereby, claim they don't have to pay income taxes, even if a corporation sole never obtains 501c3 status.

In fact, most of the corporation sole peddlers specifically tell their clients not to obtain 501c3 status, but to claim that they are "automatically exempt" under IRC 508c1A (it's for good reason they tell them not to apply for 501c3 status -- their clients would never qualify as a real church).

IRS 508 mandatory exception provisions are specifically and exclusively set aside for "churches." Corporation sole peddlers claim that just about anything can be construed as a "church," including an individual family. The family home becomes a "church" since they practice "religion" in it (and they may even define "religion" any way they want to), and even the family's business can be part of their "church," since it financially supports their "church."

And the best part of all of it is that since churches don't pay taxes, you won't have to pay taxes ever again! According to the corporation sole peddlers, "Anyone who believes in God and has any kind of a plan to serve God can purchase a corporation sole and become the head of your own church. That's all a church is; one or more persons who believe and God and who want to serve God. All it takes is one person to form church."

With so many Americans who would like to stop paying taxes (can't say I blame them), it's little wonder that a number of corporation sole peddlers have made millions of dollars with their scam.

Corporation sole statutes, having come about largely because of the influence of the Roman Catholic Church, specifically reserve the office of corporation sole to Bishops, Archbishops, Cardinals, and other heads of church dioceses.

The corporation sole is a legally valid form of incorporation. Unfortunately, the corporation sole peddlers are abusing the corporation sole statutes with impunity. The titles being assumed by this new wave of self-appointed "church heads" are truly spectacular, such as Bishop, Presiding Prophet, Sovereign Head of the Order of Melchezedek, Supreme Potentate, or any other title that suits your ego. For examples of this, just go to the Nevada or Washington state Secretary Of State's web site and do a corporation name search for (contains) "corporation sole" or "office of."

Since the government cannot define religion, the corporation sole peddlers' theory is that they get to define a "church" any way they please and, supposedly, the IRS can't do anything about it (ahuh, yeah right).

The fact is that in just the last few months the IRS has been doing a lot in going after corporation sole peddlers. Things have really heated up, particularly since the IRS recently added the corporation sole to its "dirty dozen" list of the most abusive tax scams. Unfortunately, the IRS is also going after those who have purchased a corporation sole from a corporation sole peddler. It would be nice if the IRS assumed "innocent until proven guilty." But anyone who has ever had the misfortune of dealing with the IRS knows that the IRS' presumption is quite the opposite.

Corporation sole sales hype appears to be nothing more than a rehashed version of a very old tax scam that has been perpetrated for decades by other charlatans in the name of "religion." Such charlatans typically sell "ordinations" in their "church," along with claims that your personal residence can be used as a church building and, thereby, avoid payment of property taxes. They may also claim that their "ordained ministers" personal income isn't taxable, etc. etc. There are, allegedly, all kinds of wonderful tax advantages available in the name of "religion." Not surprisingly, however, the claims of these charlatans have not favored very well in the courts.

The corporation sole peddlers are now using many of these same old theories that have failed so miserably before.

You can find some invaluable information on the corporation sole at:
http://corporationsole.hushmoney.org
http://hushmoney.org/corporation-sole_myths.htm

[Bimini]

I am currently donating my time (counseling and Bible studies) and my financial resources to a Christian mens rehab/discipleship ministry. I am in the midst of setting up a manufacturing business that will train the men while financially supporting the ministry and financially supporting myself and a few other actual employees. Each of the employees will be involved in the ministry in some form or another (mentoring, teaching, training, counseling, etc)

Can this operation be incorporated into a Corporation Sole?

[kirkguardian]

Can it? Yes. Should it? Only if you have a correct understanding about what a corporation sole can and cannot legally do.

What you're describing sounds like a non-profit enterprise, somewhat like a "sheltered workshop." A corporation sole can legally engage in any activities that any other non-profit corporation legally can.

A corporation sole is legally classified by all states that legally recognize them as non-profit corporations. For all practical purposes, the only difference between a corporation sole and a corporation aggregate is that the corporation sole doesn't have a board of directors -- it only has one ("sole") officer. Since corporate laws have changed in most states to now permit the formation of single-officer non-profit corporations, there is, for all practical purposes, no difference between them and the corporation sole.

The IRS classifies corporation soles as non-profit corporations. Contrary to the urban legends being spread by corporation sole hucksters, the IRS does NOT classify any corporation sole as 508c1A mandatory exception organizations. For tax purposes a corporation sole is treated no differently than any other non-profit corporation.

Whether you choose to organize as a corporation sole or a corporation aggregate is legally and for tax purposes the same result. It simply makes no difference one way or the other. If you can do it with a non-profit corporation aggregate you can do it with a corporation sole. If you can't do it with a non-profit corporation aggregate you can't do it with a corporation sole, and if you do try to do it you might get charged with tax fraud (see http://hushmoney.org/corporate-sole_probs.htm ).