Does A Church Need 501(c)(3) Status?

[@FoundationGroup]

We produced a follow-up to this video that goes into further detail. Be sure and check it out here: kzbin.info/www/bejne/l5PLeKOOgJtkgqs !

[@krisebbeler36]

Believers are to willingly to give as the LORD leads not because they are going to get a break on their taxes. Jesus just said give to Caesar what belongs to him and to God what belongs to Him. I can go on and on. I see no churches in the book of Acts doing any such thing. We are called to come out of the Babylon World System period.

[@seekfirstube]

Wait , in beginning you said unregistered churches are by default 501c3 and hence untaxable. Then at end, you said if church doesnt register, they are choosing to be a taxable business....you cant say both

[@FoundationGroup]

I can understand how it sounds that way, but that's not what we're saying. Churches, by default, are automatically considered tax-exempt under 501(c)(3) according IRC Section 508(a). If a church desires to be 501(c)(3)...and most do...it is highly recommended that they seek IRS determination officially. However, if a church does not wish to be considered a 501(c)(3), and by extension, subject to the regulations inherent in that, it should voluntarily organize as essentially a commercial business and file corporate tax returns and pay taxes. The great myth out there is that churches can be, as you say, "unregistered" but not 501(c)(3). Churches are automatically 501(c)(3) AND subject to those rules unless the church opts for treatment as a commercial business.

[@seekfirstube]

@@FoundationGroup why alternatively organize as a commercial business.... when i could incorporate as 508c1a and have same benefits as 501c3 without the official requirements?

[@FoundationGroup]

I ask this kindly, but did you watch the video? There is no such thing as a 508c1a nonprofit, at least not as a distinct entity. Section 508 of the Internal Revenue Code explains in detail how nonprofits qualify for tax exemption under Section 501. Section 508(c)(1)(a) references how churches qualify for tax-exemption under 501(c)(3) automatically without seeking determination. It does NOT in any way whatsoever describe a separate form of tax-exemption apart from 501(c)(3). That is a lie peddled by hucksters and tax cheats trying to make a buck off of ill-informed people. And, it's a good way to get in serious trouble with the IRS. That's why I say that if you don't want your church to be a 501c3, organize as a tax-paying business, because that's the only legal alternative you have.

[@seekfirstube]

@@FoundationGroup Hi yes, sorry, I did watch, but heard conflicting. If when and after when 501c3 was written, churches are "designated" as 501c3 entities whether officially applied and recognized or not, and then the later 508c1a code is written in respect to 501c3, stating churches are an exception to the rules of applying for a 501c3 official status, then arent those churches who are relying on the later 508c1a code designated as having a status associated with that same code, even if there is no official application process. The IRS/Congress is the same one who established both codes. If an unregistered church, previous to 508c1a was automatically designated a 501c3 entity, then why wouldnt new unregistered churches formed after 1969 as per code 508c1a be automatically designated 508c1a status, and an exception to the rules?

[@FoundationGroup]

Logical question, and it's easy to see why people get confused AND why hucksters thrive with this. Section 508 isn't a "later" code section. Section 501 and 508 go together and always have. It's like chapters of a book, and the book was all written at the same time. Section 501(c) details the different categories of tax-exempt organizations (501c1 - 501c29). Section 508 is better understood as an "explainer" of the process of obtaining tax-exempt status under those various 501(c) types. What Section 508 does NOT do is describe a tax-exemption status different or separate from 501(c). With regard to churches, Section 508 simply says that they are automatically considered tax exempt under Section 501c3 without the necessity of filing Form 1023, though it is advisable. The idea that they are tax-exempt under Section 508 (not 501c3), and therefore not subject to the rules of 501c3, is bonkers. There is literally ZERO truth to that. Think about it this way...if a tax law was passed to create a new way to get a church tax-exempt status, then it would amend the old language, not add new language and keep the old, creating two categories. That's not how tax law works...not with churches or anything else. Every possible tax-exempt entity is categorized in Section 501(c). No exceptions. There is no category of exempt organization singled out in Section 508. 508c1a just explains how 501(c)(3) status is obtained, either by application, or by default with regard to churches.

[@bddogcatball]

Thank you for the informative and helpful video. Please do a video about 501(d). I would like to learn about that since I read that monasteries and even communes such as Twin Oaks in Virginia are 501(d). Thank you

[@bddogcatball]

Looks like Twin Oaks may be a religious community of some kind. A statement of religious beliefs can be found on their website by navigating: Culture -> Policies -> Statement of Religious Beliefs

[@waynecmontgomery]

Hey Greg, I enjoyed the video and I agreed with all of your points. And yes, I did hit the like button🤣🤣. You forgot to mention nonprofit organizations that normally make 5K or less DO NOT have to and they are NOT required to apply for tax-exempt status under IRS rules. Also, you forgot to let people know that CHURCH INTEGRATED AUXILIARIES DO NOT have to apply for an exemption under IRS rules. Also, as far as the politics and religion thing goes, Churches can set up 501(c)(4) organizations and they also may set up UNCONNECTED PAC's not connected to the church and under a different name.

[@adebayoadediranbfc]

Got church which opened in 2019 who never filled form990N due to zero activity and account. Could not find them on IRS account to check their 501c status if any. I want to assist them to file form990N for all years What do you advise

[@waynecmontgomery]

@@adebayoadediranbfc Churches are NOT required to file any form 990s. However, if you elect to file a form 990 N (postcard) that can only be done electronically on the IRS's website. Also, you need to check in with the state where the Church is located to make sure they do NOT have any filing requirements. You are also eligible for real estate tax exemptions as a Church on the county level

[@adebayoadediranbfc]

@waynecmontgomery thank you. So much for your response. The church is registered with the state of New jersey. Galloway County

[@waynecmontgomery]

@@adebayoadediranbfc You are entitled to a real estate tax exemption as a Church in NJ. Also in NJ the Church has Charitable Immunity which is huge if you are ever sued. I would recommend keeping your 990s and state records up to date even though they are NOT REQUIRED it presents well to the public and it says a lot about your organization. I would also file your annual reports on time. Its either a small fee or free for a church to file in NJ

[@adebayoadediranbfc]

Thank you!!!.

[@ArabellaPottery]

A 501-(c)(3) is a business and therefore are under the control of the IRS and subject to it's laws. You may be able to sue a non-profit and all of their members. Speak to a lawyer about that.

[@mr.101coolbeans]

Thank you

[@dylanzwick]

Thank you. This was very helpful.

[@FoundationGroup]

Glad it was helpful!

[@TheQueposfan]

I believe that we should celebrate life by helping other lives that we can help.

[@jsamc]

Thank you !!

[@FoundationGroup]

You're welcome! Thanks for watching.

[@justnight8630]

Thanks!!! This was helpful!

[@FoundationGroup]

Glad it helped! Thanks for watching.

[@youknowmyname5695]

So if not a non profit then what? An LLC? How is a taxable business Church able to take in offerings / donations?

[@FoundationGroup]

Great question. There's not a rule as to the type of entity. Most will probably choose a corporate structure instead of an LLC. There's not prohibition against any entity taking in donations, whether it's a church or a hotdog stand. It just has to be counted as income. Hope that helps!

[@5winder]

If the Lord wanted us to collude with the government, he would have said so.

[@FoundationGroup]

I think I understand your sentiment, but churches operating under 501(c)(3) status aren't "colluding" with anyone. Collusion means plotting together to advance a scheme. I know of no churches doing that. 501(c)(3) status is the price for tax-exemption. If a church doesn't want to be 501(c)(3), they can choose to not be tax-exempt. Problem solved. The issue comes in when people insist churches can be tax-exempt without being under 501(c)(3). This is simply untrue, and the idea is only promoted by people who are either hucksters or just ignorant of the law. Either way, it's untrue. I've seen people throw virtual hissy fits trying to argue otherwise, but such an argument has NEVER succeeded in a court of law and it never will unless the law is changed.

[@5winder]

@@FoundationGroup I don't think churches should take money... only give to the needy.

[@keepingitrealwthelionofjud6435]

True and the Bible never told the body of Christ to depend on the world and man to compromise our disservice on government. Or man but to totally depend on God Himself YEHUAH I AM....THE Earth is The LORDS AND THAT WHATS IN IT.

[@TruceForChrist]

So Any church that sticks with 501c3 have, in all Honesty agreed to preach a watered down Gospel. Is that true ? So any so called pastor that doesn't tell them to Shove it has Denied the Faith , from what I've watched, cutting a long story short. Am I right ? Anyone?

[@raeliera]

@@FoundationGroup you clearly have a financial motive to ignore the risk of doing business with the IRS. There are many victims of the IRS

[@keithlol]

Thanks, I had a feeling it was just like having an EIN for LLC disregarded entities. You don’t NEED one but pretty much everyone requires you to have one.

[@BeanzNGreenChili]

Any videos on how to set up 501c3 step by step yourself online?

[@FoundationGroup]

Not that we've produced, but I'm sure they're out there. We do not recommend nonprofit startup as a DIY project. There's simply too many tax rules that you don't know if you're not trained in this. It is ALWAYS best to seek the assistance of a knowledgeable professional on this. Starting a 501c3 involves state, federal, and even potentially local regulations. And, depending on the location, you could be dealing with up to 5 or 6 separate agencies. Plus, with the new BOI reporting requirements for startups, the potential to overlook required submissions could result in big penalties. If you need help, give us a shout. We work with upwards of 1,000 startups every year.

[@KyuLee-n8q]

Question: What does "Membership not associated with any other church or denomination" mean. Does it mean if we call ourselves a Baptist, Methodist, Good News, or Protestant Church that is associated with another church by hosting events together or who are considered a member of a mother church or other organization? I am confused about this. The irs person I spoke with is of no help.

[@FoundationGroup]

That phrase usually means the church you're a member of is completely independent and not associated directly with a group of churches, such as a denomination or association.

[@justicewarrior8061]

No one ever speaks of the rules and regulations associated with the 501 c 3,

[@FoundationGroup]

We certainly do! Our mission to educate our clients and followers on how to successfully operate a 501(c)(3) while maintaining full compliance with all associated regulations. Check out our other videos and our website to see more. Thanks for watching!

[@salomeshunamon]

@@FoundationGroup So if you're incorporated or not, or file for 501c3 or not officially, if any "church" is caught talking about politics, they can lose their tax exempt and filing status- is that correct? So once they are caught talking politics, they are forced to incorporate and file and pay taxes- or dissolve? or what happens? Tax evasion proceedings? And how does freedom of speech work with all of that? Is it only that politics cant be mentioned in the pulpit? Or by any staff ever in or outside of church, at home, in the role, etc? By any member?

[@cat-bg3rv]

Many modern churches have a coffee bar, bookstore and sell swag for their brand. Are these churches considered a business? How does this work?

[@FoundationGroup]

Usually, they are not considered a business. Nonprofits are allowed to sell goods and services that are related to their exempt purpose without it being considered commercial activity. Also, nonprofits are allowed to sell things like concessions, if the primary audience is captive, meaning that it's primarily for the benefit of their internal constituents. Typically, a coffee bar fits this definition. As for bookstores, they usually pass muster, too, because the items sold are religious books, CDs, etc, or even T-shirts with religious messages. It's not only churches that do this, but also colleges, private schools, and other groups. Selling things deemed unrelated to your purpose in that bookstore, however, could potentially generate unrelated taxable income, however.

[@cat-bg3rv]

@@FoundationGroup Appreciate your reply. It is very informative. Thanks.👍

[@Nithinithinith]

They aren’t , they are tax free. This is the best business to start if you want to evade taxes. Kris Jenner has a church… that should tell you

[@peraleseliab4044]

What activities can a church under 501 c3 not get involved in or speak up on?

[@FoundationGroup]

There's virtually nothing a church (or any other 501(c)(3)) cannot speak about in the US. The First Amendment still applies. There are restrictions, however, on political activity. For one, involvement in campaigns for public office, whether for or against a candidate, is strictly prohibited under what's known as the Johnson Amendment. We would submit that the Johnson Amendment is too strict, but it's there. 501(c)(3)s can, however, lobby for or against legislation and public policy, especially when that policy affects the mission of the organization, though it doesn't have to be limited to that. Lobbying activity can consume up to about 10% of a 501(c)(3)'s time and resources. Speaking on issues from the pulpit doesn't carry any restrictions that wouldn't apply to anyone else under the same circumstances, unless it's about a candidate for office. Hope that helps.

[@peraleseliab4044]

@@FoundationGroup thank you for responding. And thank you for your insight.

[@JeannieMitchellMyers]

Jesus Christ should ALWAYS be the head of any church NOT the IRS! 💯💥

[@FoundationGroup]

Couldn't agree more, Jeannie. No argument about that.

[@dfrozendog3849]

Where does a 501c3 limiting speech on political matters come in? Are you saying it does not exist?

[@FoundationGroup]

There is no prohibition on a church from talking about issues. Where there are limits for any 501(c)(3) is in two areas: lobbying and campaign activity. Charitable organizations, including churches that claim tax-exemption, are limited in their ability to lobby for or against specific legislation. That limit is fuzzy and somewhat subjective. But it's safe to say that if such an organization was spending more than 10% of its time and resources on promoting or opposing specific legislation, then it would be excessive. As for campaign activity, what's prohibited is campaigning directly for or against a named candidate. It is not prohibited to encourage your members to vote your values as an organization. Most people are smart enough to understand what you're saying. The limits aren't meant to hamstring nonprofits. They're actually to ensure that nonprofits are exclusively focused on their charitable purpose, not commercial or political pursuits. Now, having said that, the prohibition on direct campaign activity for or against a candidate is called The Johnson Amendment, and you have President Lyndon Johnson to thank for that. Many (including our company's leaders) have called it a violation of a nonprofit's first amendment rights. In fact, President Trump suspended enforcement of the Johnson rule during his administration.

[@reinoehlz]

Are there any limits on the command, "Speak the truth freely in love"? There should be no limits on the speech of the church, not for the moments when we are to obey the governing authorities, but for those when we should not falter in our commitment to never bow our knee to Baal. Give to Caesar what is Caesar's; give to God what is God's.

[@FoundationGroup]

Couldn't agree more. That's why, as a company, we believe the Johnson Amendment prohibiting campaign speech by 501(c)(3) organizations is unconstitutional. Unfortunately, it's still the law of the land (for now).

[@reinoehlz]

@@FoundationGroup These ideas and discussions never found their way into the thousands of hours or sermons, lessons, and discourse in which I've participated in the church. I find it troubling that the price of obedience at times may seem higher than many are willing to pay. I pray that we not walk away sadly as the rich, young ruler--that we would be willing to store up treasures of higher value. I don't know what that may entail in the world of accounting, but your videos and my subsequent research into tax law have stirred in my mind and soul many challenging questions. The tax deduction of our giving may come at a cost.

[@globalrevival]

What about 508’s instead of a 501?

[@gregmcray]

Start at about the 6:50 mark and watch that section again. That's where we talk about 508 free churches, which are a myth. Don't fall for the 508 scam. Many have learned that the hard way.

[@hazlox]

508c1a is what a real church is. This is for the state.

[@gregmcray]

For the 1,000th time...there is NO 508c1a church. It doesn't exist! Either a church is a 501c3, or it is a taxable business. There is no third option allowable under US law, and arguments to the contrary are either ignorant (at best) or intentionally deceptive (at worst). There's not a licensed tax professional in the country who will tell you differently, because they're under a legal obligation to advise clients truthfully.

[@hazlox]

@@gregmcray OK well then how does the IRS code 508C1 a even exist then? Why are there numerous fbo consulting firms about the 508?

[@gregmcray]

@@hazlox I've explained it in this video, in the comments to this video, and I dive deeply into this topic in a new video that is posting next week. The basics are this: Section 508 of the Internal Revenue Code explains how organizations acquire tax-exemption under 501c3. It was written as an "explainer" to Section 501. It is NOT a separate category of tax-exemption status. Specifically, Section 508c1a describes how a church is automatically considered a 501c3 organization, even without applying for recognition. 508c1a isn't a status. It is an explanation for auto-exemption as a 501c3. Stay tuned for the new video...this will make more sense to you then. As to why there are "consulting" firms that focus on 508? The honest truth is that most of them probably know better, but there is a market for the 508 "product", and they are more than willing to sell that product to people who don't understand the law. What you won't see are reputable attorneys, CPAs, or licensed tax pros selling that garbage. Why? They would be sanctioned for professional malpractice. I know...I am a licensed tax pro. I'm all about fighting the IRS where there is ground to do so in the interest of representing a client. But the 508 nonsense isn't even real, and selling false notions to churches isn't just unethical, I personally find it scripturally reprehensible.

[@hazlox]

@@gregmcray how much are they paying you?

[@gregmcray]

@@hazlox 🙄

[@rollingthunder4599]

Does a church need an 805, or anything from the government??

[@FoundationGroup]

Not sure what you mean by 805. Can you elaborate?

[@1flying]

NO!

[@BardovBacchus]

The answer is, as in most things; It Depends. Do you *not* want to have anything to do with the government? You could go off into an unregulated wilderness and build your own church in the woods. However, if you want anything, I mean literally anything from the government, or anyone else not in your church, you do have the play the same game as the rest of us. We are all unique but ain't none of us special

[@MadManMuscle]

9:29

[@FoundationGroup]

If you need help filing for IRS 501(c)(3) status, we’d love to help! You can fill out our contact form at bit.ly/3i6rFxz or give us a call at 888-361-9445.

[@christinerose9561]

My church needs help removing the status. Do you assist with that?

[@gbayb3025]

So the answer is YES you do want do have the determination letter, by filing for 501c, to play it safe Thank you for the info

[@JeannieMitchellMyers]

Then that makes the IRS the head and not Jesus Christ.

[@rbrjb1959]

The true church is tax immune- that’s the common law basis of the 1st Amendment... Once your organization accepts a privilege granted by the state you cease to be the real thing. ( Are you a grifting operation , perhaps without knowing it?)

[@FoundationGroup]

Tax immune? Says who? The federal gov't certainly doesn't agree. This is the sort of nonsense that gets well-intentioned people in unnecessary trouble. "Common law", whatever that's supposed to mean, doesn't dictate US tax law. The US Code does. Nevermind the fact that the 1st amendment that guarantees, among other things, freedom of religion, doesn't address either taxation, nor "the church", either directly or indirectly. Look, it would be great if somehow churches in America could simply be above it all, but that's a fantasy and a denial of reality. Jesus himself said to render unto Caesar what is Caesar's. He never advocated civil rebellion against the tax law of the Roman occupiers. He paid his taxes, albeit through a fish's mouth...cool move! The point is clear in our video: If you do not wish to be subject to the rules and restrictions inherent in being a 501(c)(3), that's perfectly fine. Opt out...just don't claim you're somehow still tax exempt. The truth is not what you want it to be. The law is the law, whether you or I like it.

[@rbrjb1959]

Common law is the ONLY type of law mentioned in the Constitution. All other(s) are inferior., such as the statutory codes of the IRS. You might learn what this means, learn what jurisdiction means and to whom it applies. (To your response of 11 Dec.- youre operating a business under a construct that requires churches to function as a creature of the state. And you justify yourself as a “ Christian“ doing a professional service. Yet , how ignorant to know little to nothing of the robbery of a pure Ekklesiastical status through incorporation into Babylon.

[@rbrjb1959]

Not to say the 501 govt-approved “church” is a grifting op, but most are or will be compromised in certain ways to the detriment of their original vision

[@rbrjb1959]

You questioned “tax immune” and the Bill of Rights FIRST declaration in its 1st Amendment!? - “Congress shall make no law...” - what more do you need to understand, sir?

[@ArabellaPottery]

@@FoundationGroup The IRS says churches are exempt and does not need to apply for 501 c-3 status. If you apply for such status you are a business and under the laws of the IRS. If you want to be free of government control. Do not apply for a 501 c-3

[@johndough1703]

Nobody’s here for the history lesson

[@FoundationGroup]

Watch the history portion at 2.5x speed. That way you won't have to suffer as long :) .