The 501(c)(3) Church Controversy

[@FoundationGroup]

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

[@JonathanGrandt]

“Every American has to do business with IRS” does not appropriately answer the issue raised with organizations being 501c3 2:29 regard ignoring risk doing business with the IRS. Corporations are not individual Americans.

[@drmichaelethomasjr]

Thank you for this video. So much learning I am in since being introduced to the 508 saga. as founder our church has been operating since 2009 out side of the 501. We pay taxes and I was researching this 508. I truly do not care about tax exemptions. Ourchurch has been, is and will be trustworthy so any offering we get we inform we are no 501 and don't want their recognition when we have it automatically. We have records when we receive seed and when we send offering to our global ministries. Wierd but true. I will need to watch your other video. So, the 508 doesn't seem to be neccessary as long as we just file the correct form1120? It i sa bit confusing with these ministry's giving just enough then when you research they want you to pay thousands to give you what you already have. thank you for your video on this. Head scratcher but I believe integrity, honesty in serving the kingdom. I have been searching for forms to no avail. I am understanding a bit more here. May He continue to bless you.

[@FoundationGroup]

Great question, Michael. My advice is keep doing what you're doing. If you don't want 501c3 status, then keep operating as a taxable entity. There is no separate 508 status...that's the myth part. Section 508 simply explains how churches are automatically 501c3 unless you choose to do what you're already doing: Filing Form 1120, paying taxes, and properly informing your constituents that you are not a 501c3.

[@dennismiller1602]

IRS code says “Incorporated or otherwise” ?

[@FoundationGroup]

Nonprofits of any type are not required to incorporate, though most due for liability protection concerns. Nonprofits, including churches, may choose to operate as unincorporated associations, which is perfectly fine for 501c3 purposes, but does expose key individuals to higher levels of personal risk since there is not corporate veil of protection.

[@lrellra-el5167]

4:41 you said churches are automatically tax exempt without applying for 501(c)(3) status. Then @ 4:48 you say the status churches automatically get is 501(c)(3) status ?? You should do a separate video elaborating on this statement.

[@FoundationGroup]

It can be confusing. Basically, churches CAN apply for recognition of 501c3 status, or they can operate as a 501c3 without applying. The IRS automatically considers a church to be 501c3 just by virtue of being a church, but it allows them to apply for an official recognition.

[@pamelaadams5395]

Also links it up in the spiritual realm with satanic churches.

[@gailsgardenherbsmore1605]

Is it written that if you are under 501C3 you are not allowed to preach on politics?

[@FoundationGroup]

No, actually it's not. What you're referring to is the so-called Johnson Amendment (from President Lyndon Johnson's day) that prohibits 501(c)(3) nonprofits from direct involvement in campaigns for public office. While many of us here believe the Johnson Amendment is unconstitutional in many ways, it's important to remember that even with it in place, it isn't about political issues...only candidates. If you want to talk about political issues from a Biblical perspective from your pulpit, do as you see fit.

[@debrannkaye861]

I heard you can't preach on the alphabet people either

[@msantacruz430]

www.irs.gov/pub/irs-tege/How%20to%20Lose%20Your%20Tax%20Exempt%20Status.pdf Yes it is. You can’t have political activity if you have a 501(c)3

[@Glory2Abba]

Mark 12:17 And Jesus answering said unto them, Render to Caesar the things that are Caesar's, and to God the things that are God's. And they marvelled at him.

[@flamingofan5411]

Do a home fellowship according to 1 Corinthians 14:26…. No need for an expensive building. No need for a head pastor. 👍🏼

[@Budguy68]

You might as well call it 501(c)(3) IE the mark of the beast.

[@FoundationGroup]

Budguy68 chapter 24 verse 7, right?

[@L3piano]

A REAL church doesn’t have to be tax exempt!!!! Don’t come in agreement WITH BAAL! Churches must speak against sin, abortion, politics etc without being penalized by the gov

[@FoundationGroup]

You are correct in that churches do not have to be tax-exempt. They can choose to operate as taxable entities and avoid the restrictions on political activity.

[@dylanzwick]

So, a church is by default a 501(c)(3) organization, and this is what 508(c)(1)(a) is specifying. There is no legal distinction between them. The only way a church can not be a 501(c)(3) organization is if they specifically set things up to NOT be tax exempt - which isn't 508(c)(1)(a) and most churches probably don't want to do. Makes sense! Very helpful.

[@FoundationGroup]

You nailed it, exactly, Dylan! If only everyone else paid as close attention to how it works as you did. You win the internet for the day!

[@tit4357]

Thank you! I am starting a church and I wasn't surprised that most of those people who scream 508 are the same that sell something that is free! Ugh. I'm working on starting my own church and have thought about it for years! Got my bylaws, my board, and everything ready. But the state is asking for how many donations I received last year, (like a 990 for the state) and I have a ballpark, but not an exact number, it was spent on food, but no receipts, have a few tiktok videos though! LOL... Do I need proof that I spent this money? Can I just tell them I spent $x amount without receipts, (it's less than $20K)? It's form COF-85 Annual Financial Report.

[@TJagness]

Thank you for this video. I'll be forming a non-profit organization. I wanted a church or a big building to hold my non-profit. I'm still learning all about NPO. I just subscribed to your channel. Thanks again for the information 🙏❤

[@robertfritchey-zq1wn]

Why do we have to be anything other than Sovereign Citizens of the Kingdom of God who take our orders from King Jesus not the Government?

[@FoundationGroup]

Our video explains it. The answer to the question "why" is simply because the US gov't says so. We don't have to like it. If you don't want your church to be a 501c3, then operate it as a taxable business. There's no status that allows a church in the US to operate immune from tax laws applicable to all people and entities.

[@Bluecollar780]

First Amendment

[@carolmaplesden916]

​@Foundation Group You don't have a response to 1st amendment???

[@sherrykent2948]

Love your broadcasts, My church refuses to apply for 501c3 status, they want no board, etc. They broadcast that this status is not required for donations to be tax deductible. However, there is no accounting functions happening, the contribution report sent to members of the church for tithing are incorrect and when they correct it, they changed my contributions to what I told them I gave, this cannot be right? In addition, funds all go directly to the pastors multiple accounts and are co-mingled with political contributions and gifts to politicians, cars purchased for poor members and improvements to church property that is not in the name of the church. This just can’t be right?? Is this allowed if non 501c3 but still operating as a church?? Thank you!!

[@FoundationGroup]

Sounds like a nightmare, Sherry. They want the benefits of tax-exemption without the accountability. Sorry, but it doesn't work that way. What they're doing is illegal and treating donated funds as their own personal treasure trough AND paying no taxes on it. If it's as bad as you say, they could be prosecuted for embezzlement and failure to pay tax on personal income. My view? If you can't trust church leaders with money, you can't trust them with your soul. Move on.

[@theresawells-dixon9716]

Thank you!

[@FoundationGroup]

Thanks for watching!

[@cyndibontrager3992]

What you're not saying is that a church is automatically considered a 501(c)(3) with tax exempt status by the IRS and isn't required to file anything to receive that status, and doesn't have to file annually with the IRS. From the IRS website, "Churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and are not required to apply for and obtain recognition of exempt status from the IRS. Donors are allowed to claim a charitable deduction for donations to a church that meets the section 501(c)(3) requirements even though the church has neither sought nor received IRS recognition that it is tax exempt. In addition, because churches and certain other religious organizations are not required to file an annual return or notice with the IRS, they are not subject to automatic revocation of exemption for failure to file."

[@FoundationGroup]

What we're not saying? You might want to re-watch the video, because automatic exemption is the entire point. Section 508(c)(1)(a) deals with the automatic exemption of churches under 501c3, and we start an explanation of that specifically at the 4:00 minute mark.

[@saintsgomarching4229]

Weiss&associates KZbin state vs state Tax facts.

[@zacharycampbell1395]

Is a 501c3a obligated to file tax returns?

[@FoundationGroup]

If you mean, "Do churches file tax returns?", the answer is generally, "No".

[@CarolTopp]

Thank you Greg for creating this video! I'm a CPA and help nonprofits (mostly homeschool groups) apply for 501c3 status. Oh my! The emails i have gotten lately about this misunderstanding about "508c1a" status. I've watched some of these videos supporting 508 "status" (it's not a status like you say) and the latest myth: Private Membership Associations (PMAs). You say what I tell the people who contact me: go read the IRS Section 508c1a. It's not that confusing or long. You are plain speaking and clear. Thank you!!!

[@FoundationGroup]

Thanks for the feedback, Carol. At least there's a few among us who get it :) . Much success to you!

[@zacharycampbell1395]

So is it true that a 501c3a does not have to file with the IRS?

[@gima-y5y]

This is a quote directly from the IRS website. I do not understand why you are saying something that is different. "Churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and are not required to apply for and obtain recognition of exempt status from the IRS. Donors are allowed to claim a charitable deduction for donations to a church that meets the section 501(c)(3) requirements even though the church has neither sought nor received IRS recognition that it is tax exempt. "

[@FoundationGroup]

Um, that's EXACTLY what we said: Churches are automatically exempt under 501(c)(3) without being required to apply for it. Might want to rewatch the video.

[@evandennard773]

😂😂😂

[@anthonyenos2835]

tax exemption just means a way conviently hide money ,it usually means you have alot of money coming in.

[@FoundationGroup]

Not so much. You might be surprised to learn that over 80% of US 501(c)(3) organizations bring in less than $50,000 per year in total revenue. Most have very little coming in, actually.

[@christianmama2441]

@@FoundationGroup It appears that if a 501(c)3 compensates an employee 150k or more, than they MUST file Form 990. Is this right? What if a church is affiliated with a denomination, falls just short of 150k to avoid filing Form 990 with the IRS, but still compensates the pastor from a separate nonprofit of the denomination 501(c)3 like pension funds or other funds? Doesn't this create a problem of trust between the congregation and their leaders who are getting compensated from two different nonprofits related to the church? I feel there is a lot of room to "cheat" the congregation by simply not telling them the whole compensation story of their leaders.

[@danielloilkmlonkmlof8jorda875]

Hi do you help to apply 501c3 ?

[@FoundationGroup]

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

[@carolmaplesden916]

Show me scripture when Jesus rendered to ceaser

[@FoundationGroup]

Matthew 17:24-27

[@jimsnabl4455]

Perfect example. Thank you. Rom 13:1-7 gives further instruction on our obligations to government . That should be understood under the umbrella of verse 8.

[@mattdmusiccom]

I was told by the IRS, when I called to ask questions about filing that if Rswe were a Church, then we did not have to file. But if we were a ministry, we had to file. I don't think that even some people at the IRS understand the law.

[@FoundationGroup]

Never assume a person on the phone at the IRS has any idea what they're talking about. :)

[@Bluecollar780]

Also never assume 1 person on a video talking about un-American unconditional laws has any idea what they are talking about

[@SCORPION89199]

The IRS is an illegal unconstitutional that not even based in the United States of America, should have no business asking churches to pay taxes,if the IRS was to be abolished next week churches and the people who attended them would have a lot less to worry about and could breath easier without our the fed breathing down their necks

[@pamelaadams5395]

You can be a 504 church

[@FoundationGroup]

No such thing! 504, 508...this is exactly the bogus nonsense we're talking about in the video. No one says you have to be happy about US tax law. We'd love to be exempt from taxes...who wouldn't? But not liking the law is a very different thing that acting like you can make up your own tax law and pretend you're exempt from regulation.

[@lafsatx]

My question is, if a church is considered 501 (c)(3) by default, as you mentioned in the previous video, then how can it be giving up the nonprofit status if it chooses not to seek a determination letter? Doesn’t a part of the 508(c)(1)(A) ad to the 501 code that a church isn’t required to file the 1023 for the rights and privileges to run as a 501(c)(3)? There is definitely confusion around this topic, I’m not arguing, I’m just trying to understand completely.

[@FoundationGroup]

I hear you...it can be confusing. If a church doesn't want to be considered a 501(c)(3) organization, it can disavow that status most easily by filing a business tax return and paying federal (and possibly state) tax on net income. The fallacy is that somehow churches can be tax-exempt outside of 501(c)(3) status, whether applied for or assumed under 508(c)(1)(A). It can't. People may not like that fact, but the law is the law. If a church wants to be considered tax-exempt, it will do so under the regulatory structure of IRC 501(c)(3). Otherwise, file a Form 1120 corporate tax return annually and operate as a taxable business. Hope that helps!

[@lafsatx]

I understand what you’re saying but it doesn’t really answer my question lol. For me, it’s the misinformation from all over plus the language of the code that has me stumped. I’m trying to clear the confusion on the part of the 508 (c)(1)(A) that seem to be saying the mandatory exceptions subsections regarding SOS notification does not apply to churches. Is this referring to form 1023? Or something entirely different. Then the form instructions on the first page says churches may not need to file the form to be considered tax exempt under the 501 code. I hope you understand what I’m trying to better understand . Can you make this less confusing for me lol. Thanks again 😊

[@FoundationGroup]

I'm not sure what you mean by SOS (Secretary of State, maybe?). But yes, Section 508 explains how entities become recognized as tax-exempt, either by filing Form 1023 or 1024, depending upon the subsection of 501(c) they are applying under. Further, 508 explains the Form 1023 church exception to being recognized as a 501(c)(3). Churches may apply via Form 1023 and specifically seek determination as a 501(c)(3) church that is not liable to file Form 990 annually. 508 also explains that this is not legally required; that is, a church, by virtue of simply existing, can automatically operate under the rights, privileges, AND responsibilities of a 501(c)(3) without the need for filing Form 1023, ASSUMING that it meets the qualifications of a religious body with a congregation that meets regularly in a physical location. Or, as stated before, they can choose neither and pay taxes. Hope that helps!

[@lafsatx]

@@FoundationGroup Hi again There is still a bit of confusion but I do understand what you are saying. Also, Yes I was referring to the Secretary of State lol. Thanks for replying. 🙂

[@jonl8697]

Been studying this for only a few weeks now. After reading the 40 page Tax Guide for Churches & Religious Organizations www.irs.gov/pub/irs-pdf/p1828.pdf Among other docs. It sounds like that as long as you operate as a church then you should be recognized as a church. The IRS has some broad criteria to what characteristics define a church and supposedly not all criteria has to be met in order to be considered as one. If you go to glossary under the that Tax Guide, you will see the criteria. I am apart of a “de-facto” 501(c)(e) religious organization that has been operating since the 60s. They are incorporated with the state but are still a 501(c)(e) without the determination. My donations and dues are still tax deductible and we’ve never been audited. Only issue is that some big company employers have programs that will match their employees’ donations to a non-profit. Since we are de-facto, some big companies use that as an excuse to not accept the match. Other than that, de-facto churches do have less filing responsibilities as opposed to churches that seek the determination but regardless all tax exempt churches still are operating within the 501(c)(e) guidelines despite having to barely fill out any filing docs. In theory, I believe one can start an unincorporated de-facto church and still be tax-exempt but still learning.

[@beckyabrams1645]

I love this so much❤❤👍🏼👍🏼👍🏼👍🏼

[@CarolTopp]

Me too Becky!

[@waynecmontgomery]

Happy New Year Greg!!! You had me laughing (LMAO) throughout the video. I love it, my friend. AND YES GREG is RIGHT !!! However, if anybody on KZbin wants to give their money to a rogue former attorney I will gladly take it. I will also tell you ALL kinds of stories about the IRS hiring 87000 agents and coming to your house in black helicopters 🤣💸

[@johnlauriestewart]

As the head of a non-profit, lawyer and former law school professor, I've used the Foundation Group because navigating the IRS Code is not something for amateurs or even professionals who don't specialize in tax law (especially for non-profits). Too often Christians are quick to believe a rumor and end up looking foolish (like "sovereign citizens") rather than wise. Thanks, Greg, for the work you do.

[@FoundationGroup]

Thanks for the shoutout, Jon! Nothing is more frustrating than to see people who ought to know better fall victim to scams. Fortunately, most listen to reason when it's explained to them. But certainly not everyone! ☹

[@Bluecollar780]

Your calling out constitution a scam? Are you American?

[@southerntulip799]

Thank you for this!

[@badegg6019]

🔥🔥🔥

[@FDroid01]

You are awesome. Please keep this up. I am going to start a ministry for beggars to go and meet them on their corners and provide food, water, and Scripture. I want to be able to verify donations as tax-deductible for those who fund this mission. Your information seems well-founded and I will put your advice into practice.