501c3 questions

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Croghanite

Puritan Board Sophomore
I need information on what a non 501c3 church is required to submit to the IRS if anything at all.

Considering it is a church that rents a meeeting place, has a FEIN number and has hired a Pastor to begin in October.

Are there any non 501c3 officers of churches on the PB?
 

LawrenceU

Puritan Board Doctor
Do you mean some sort of registration or approval for tax exempt status? If so, then nothing.
 

Croghanite

Puritan Board Sophomore
I understand churches are tax exempt 'automatically' and there is no need to file for 501c3 status.


What is required of churches by the IRS? Specifically, what forms need to be sent to the IRS if any? Keep in mind the church employs a Pastor and rents a building.

Do we have to report interest earned on a bank account?
 

DMcFadden

Puritanboard Commissioner
Profit does not equal surplus income.

A not-for-profit is a non-profit in the sense that it does not distribute "profits" to shareholders. When a non-profit has revenues in excess of expenses, it is surplus income and NOT "profits."

A church may receive offerings, rent a meeting place, allow other churches to rent its building, and pay its vendors and staff without fear of undue interference. The IRS is only concerned that you follow its rules on unrelated business income, and are abiding by its regulations governing non-profits (e.g., not engaging in partisan political activities beyond the threshold established by IRS regs).

For someone to receive a tax deduction for charitable contributions (only important for those itemizing), the church must provide them with an official statement for all checks of $250 or more (the IRS will not consider a canceled check a valid receipt). Also, the church should put on the bottom of said statement some wording to the effect that "no goods or services were exchanged" for the contributions. In other words, if people give your church money for lights, rent, staff sallaries, and missions, it is deductible. If they pay for their kid to go to a church camp, it is not deductible. In the case of organizations that provide some real "gift" in exchange for contributions, the entity must segregate the tax deductible from the non-tax deductible portions (e.g., Ligonier deducts the cost of the monthly CDs from the total "donation" in their annual statement; organizations will often specify the value of the meal at a banquet as opposed to the tax deductible gift).

For details, you should direct your question to our resident PB tax attorney for details.

BTW, a tax attorney would know better than I, but it is NEVER a good idea to print a "designation" to a specific individual on the memo line of a check. Overly aggressive auditors can challenge/disallow it. Most missions agencies encourage you to write the check to the organization and indicate your particular support of a specific missionary on the response form (or as a post it put on the check).
 

VictorBravo

Administrator
Staff member
The IRS has a pretty thorough guide. http://www.irs.gov/pub/irs-pdf/p1828.pdf

As you know, you do not have to file for 501(c)(3) status. But you do have to deal with employee payroll taxes and there are bookkeeping requirements. All of that is addressed in the guide I linked.

Basically, you want to keep good books to demonstrate, in case of an audit, that you are not benefiting insiders or failing to report business income, if there is any.
 

Croghanite

Puritan Board Sophomore
The IRS has a pretty thorough guide. http://www.irs.gov/pub/irs-pdf/p1828.pdf

As you know, you do not have to file for 501(c)(3) status. But you do have to deal with employee payroll taxes and there are bookkeeping requirements. All of that is addressed in the guide I linked.

Basically, you want to keep good books to demonstrate, in case of an audit, that you are not benefiting insiders or failing to report business income, if there is any.
very good link. thanks!
 
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