Q. What are the 7 states that still have active Corporation Sole laws?
A. California, Arizona, Alaska, Hawaii, Montana, Colorado and Wyoming. Currently (Sept, 2019) we hear that Arizona is working on removing the filing of a CS. IRS has/is successfully removing these from all states because it removes their control over YOUR church's finances.
Q. Can Church Corporations Sole act as my Registered Agent, or who can?
A. Your Registered Agent MUST live in the state in which you are filing. For example: if you file for your Corporation Sole in Wyoming, the Registered Agent must be a resident in the state of Wyoming. This applies to any of the 7 states in which you file. If you live in the state in which you are filing; you are your own Registered Agent and no one else is needed.
Q. How do I find a Registered Agent in the state in which I file?
A. Simply go to Google.com and search for Registered Agents - you'll find a huge list of them. Example: if you're filing in the state of Wyoming, simply search "Wyoming Registered Agents." They will charge anywhere between $49 - $100's, depending on the services you select from them.
Q. What if there are church members in a different state, can they still sign our Constitution 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 Constitution 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 14-point preferences for what they would like to see in a church? We do this through your Church's Constitution. Call for details.
Q. Where can I find the 14 characteristics that define a church, according to the IRS?
A. The term church is found, but not specifically defined, in the Internal Revenue Code. With the exception of the special rules for church audits, the use of the term church also includes conventions and associations of churches as well as integrated auxiliaries of a church. Certain characteristics are generally attributed to churches. These attributes of a church have been developed by the IRS and by court decisions. They include:
Distinct legal existence
Recognized creed and form of worship
Definite and distinct ecclesiastical government
Formal code of doctrine and discipline
Distinct religious history
Membership not associated with any other church or denomination
Organization of ordained ministers
Ordained ministers selected after completing prescribed courses of study
Literature of its own
Established places of worship
Regular religious services
Sunday schools for the religious instruction of the young
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 Constitution Document on file.
Q. Why is a Church Constitution Document so important?
A. There are 14 points that the IRS and the Federal Government look for to define a church (see above). The Church Constitution clearly fulfills these 14 points. It also clearly defines the “Bishop/Overseer” and a Successor within the Corporation Sole. It is also a document that will carry through, from one generation to the next, to insure the Pastor's vision is perpetuated.
Q. Believe it or not, this is one of the most asked questions: As a 508, can I legally ordain myself as the pastor, and can I ordain other ministers?
A. Yes! You have every legal right to ordain anyone you choose to. We highly recommend you ordain yourself first, and as you raise up other ministers, you certainly have the right to legally ordain them.
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: Where does it state, in an IRS document, that churches have a mandatory tax exception under the 508(c)(1)(a) status?
A: The Title written by the IRS with states that 508 churches are tax exempt can be found here.
Q: Where do I go to get an EIN for my Corporation Sole, and is it necessary?
A: You can apply for an EIN online at this location. And yes, it's very necessary to open a Nonprofit bank account.
Q: Do we charge fees?
A: We are an American Free Enterprise Business and our primary purpose is education. However, if you would like us to complete the paperwork for you, our fees are based upon what you are wanting. Some want just advice, some what us to complete their Articles of Incorporation, and some want us to complete a full package for them. Fees also depend on what state you'd like to file, and if you need us to be your Registered Agent. We recommend California, since it's one of the states that allow you to file with great ease. Normally, this would cost you about $2500 if you went to an attorney; and we're no where near this price. We consult and assist you with: Complete Corporation Sole Package Review of Existing Corporation Sole Make your existing Corporation Sole Legal Create a Church Constitution
Q: Why use us?
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. Be careful of those that 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. We encourage you to avoid putting yourself, or your church, into this path of destruction.