Frequently Asked Questions
Q. What are the 7 states that still have active Corporation Sole laws?
A. California, Arizona, Alaska, Hawaii, Montana, Colorado and Wyoming
Q. What if there are church members in a different state, can they still sign our Affirmation Document?
A. Yes, although they would have to be mailed the affidavit, have them sign it in front of a public notary, then have them send it back to you directly. It is strongly recommended that members that attend on a weekly basis sign the affirmation document. Your church constitution is your defense should you ever be contacted by the IRS.
Q. What are the common mistakes churches make that put them under a 501(c)(3)?
A. Mistake #1: A church “incorporates” itself with their respective state
Mistake #2: Filling out and filing IRS form 1023, seeking “Official Recognition of Tax Exemption”
Q. Can a church reorganize its current 501(c)(3)in favor of a Corporation Sole?
A. Absolutely! But the church leaders must discuss, donate and dissolve its current 501(c)(3) status. Call for details.
Q. If I get a Corporation Sole, will my church be considered a 501(c)(3)?
A. Not at all. Remember, there are 2 tax exempt laws in the United States, the first is 508(c)(1)(a) and the other is 501(c)(3). Your church will be a completely separate legal entity from your Corporation Sole and will be under the 508(c)(1)(a) tax exempt protection, with all the benefits of a 501(c)(3), such as tax deductible donations. Call for more details. If your church is currently a 501(c)(3), dissolve it. It will not legally be known as a church while being considered a state entity.
Q. What are the advantages of the Corporation sole versus the traditional 501(c)(3)?
A. Unlike traditional 501(c)(3) churches (those that cannot be active in politics whatsoever for fear of losing their tax exempt status), a church organized financially with a Corporation Sole frees the church and CAN operate politically without fear of losing its exempt status.
A Corporation Sole, unlike all other forms of 501(c)(3) religious organizations, requires NO board of directors, trustees or governing body, no church treasurer or by-laws.
The Corporation Sole acts as a “sole” office that handles all of the assets, while acting as a tax exempt organization, asset holding entity, business, and more.
No filing Federal or State taxes.
No $800 + per year to the Franchise State Tax Board.
No Board of Directors.
The church is now Mandatory exempt from the IRS.
Can accept tax deductible donations just like a 501(c)(3).
Q. Do you need to have a physical church building to have a Corporation Sole?
A. Not necessarily, however, how do we lawfully fulfill the IRS’s own 14-point preferences for what they would like to see in a church? We do this through the Church Affirmation Document. Call for details.
Q. Is a Corporation Sole considered to be a church?
A. The answer is No. A Corporation Sole is an OFFICE of the church to oversee all finances, real estate, trusts, etc of the church. This is why it’s important to have a Church Affirmation Document on file.
Q. Why is a Church Affirmation Document so important?
A. There are 14 points that the IRS and the Federal Government look for to define a church. The Affirmation Document clearly fulfills these 14 points. It also clearly defines the “Bishop” and a Successor within the Corporation Sole.
Q. As the Overseer/Bishop of the Corporation Sole, am I required to pay personal taxes?
A. Yes! A Corporation Sole is an office of the church, not a personal office. Although a “Natural Person” is being incorporated, this office is for the church. If the Bishop receives a salary, that salary is taxable, and he/she must pay personal taxes.
Q: Can a church or Corporation Sole own a business?
A. First, the “Church” is not supposed to own or run a business. A church is a nonprofit, with the purpose of spiritual teaching, rituals, mentoring, ministering, etc. If there is anything that even looks like a business, the Bishop and Successor should completely separate themselves from it to not draw an IRS flag to it. If there is a business, it should have its own ownership or Board, legal organization, financing, and pay taxes. This business can donate to the ministry for tax deduction purposes. Mixing nonprofit and business is very complicated and you are encouraged to hire a professional tax attorney that understands nonprofits before you proceed. Nonprofits cannot charge fees, but can ask for donations.
Q: Why do we charge fees while there are others that do this free?
A: You need a custom filing because you are a custom church, each with individual personal beliefs and rituals, as small as they may be, but still your own. These filings need to be filed using your own terminology to authenticate them. We assist you in completing these documents, and that takes time. Those that do not charge, or charge a very small amount, usually offer a prefabricated template. These templates go to multiple churches, even 1000’s of them. IRS deeply frowns on “template” filings and considers them to be a tax evasion scam. IRS already frowns on Corporation Soles, the less you do to draw attention to yourself, the better. When there are multiple, up to 1000’s and more, template filings within the same state, they are flagged by the IRS. Once flagged, IRS begins to watch these filings. This could lead to several things, such as: fraudulent filings considered to be a scam, and other activities that could lead you into court, or possibly jail. History already shows many good people have lost everything and are in jail, or have paid extreme fines and penalties.