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Step 4: Becoming Tax Exempt - 501c3
Sooner or later, if your church is growing and functioning long-term the question will arise regarding the handling of money and the tax status of funds used for the church. There is an IRS publication that you can download from the internet. It is entitled Publication 1828 - Tax Guide for Churches and Religious Organizations (http://www.irs.gov/pub/irs-pdf/p1828.pdf)". Reading and understanding this document is highly recommended.
Depending on your situation, there are two ways you may handle becoming a 501(c)(3) organization:
1) Obtain exemption through a parent organization: If you are in a denomination, you can get a letter which will stipulate that your church is covered in their group exemption.
Southern Baptist Churches - Use the attached is a form to request a 501c3 . Requirements for using this form - If they are a non-affiliated congregation (mission, seed church, etc.) AND they are contributing or commit to contribute to the Cooperative Program AND are in agreement with the purpose of the convention, they are eligible to receive the 501c3 based on their sponsoring church. If they do not intend to be a cooperating church (giving through CP and in agreement with the purpose of the convention) then they need to go through the process of obtaining their own 501c3. (see below)
2) Apply for tax-exempt status: The IRS fee is $500. The IRS requires more details than this manual provides and the paperwork is extensive. An attorney cost to complete the incorporation status is approximately $500.If your church plans to take this route, this manual probably will not be sufficient for your needs.
We reccommend Option 1 above for Southern Baptist Churches.
|Request for 501c3 form.pdf||34.92 KB|