Incorporation and 501c3 Filing

[Raye Jackson, PhD]

Incorporating in your State of residence and filing for the 501c3 letter of determination from the IRS is key to the successful ascension to the next dimension of your Kingdom Assignment. An integral part of my assignment is to provide assistance to churches, non-profits, and leadership that desire to incorporate their personal ministries and submit application for the 501c3. With the increasing investigations by the IRS of ministry leaders, it is important that senior leadership be aware of legalities and benefits. The Senate Committee's most recent investigation of several mega ministries has caused much discussion as to financial recordkeeping and documentation. Many leaders think that the IRS or the government will be in their business if they become a 501c3. If you are operating illegally, they will be in your business without being a 501c3. Did you know that if your church or personal ministry (you) are not a 501c3 organization, a contributor's (if audited by the IRS) contribution may be disallowed because you are not a 501c3 organization. This is information that is not voluntarily shared when asking questions regarding whether the church is tax exempt. Yes you are but the rule applies to the contributor. What if people in congregations all of over America knew about this rule?

[Raye Jackson, PhD]

Thank you for your response. When a church elects to apply to become a 501c3 organization, it does not give the federal government control in the administrative management and operation of the church. This is a misconception. The church will be eligible to apply and be awarded govermental and private foundation dollars that will financially support the services that the church offer to the community.This mindset of thinking that the government will take control is one that has hindered many resources coming to our local churches.

[Raye Jackson, PhD]

You are correct. There should be no co-mingling of funds. Grant monies received should be kept in a separate bank account and not mixed with church contributions. I read the letters received by the mega ministries. A Community Development Corporation would be wise for a church to establish. Even a separate corporation does not guarantee an organization will adhere to the grant management requirements. Integrity is key.

[Eemah Martha aka Hephzybah]

This is an interesting discussion and should be clarified in terms of requirements vs. options. 501c3 is not a requirement; however, if you are accepting donations from the public or even your supporters, please know that you are highly accountable for the use of the donations as a church. I do believe you are expected to incorporated as a profit or non-profit entity in most states in order to legally operate. Either way, I believe you are required to inform your financial supporters, if their donations are NOT tax deductible. Otherwise, this can become a very serious problem for you as well.

Incorporating as a profit entity has so many less strings attached. Yet, as Sister LaRahna stated... the major issues are Integrity and Accountability... Please do not take either issue lightly. I also thank Sister LaRahna for information above that I was unaware of and is very important to those with ministries more so than churches. Those with churches may find themselves more tied in to governmental requirements... simply by using the word... church.

[Eemah Martha aka Hephzybah]

Sister LaRahna,
What happens in the case of unincorporated churches when supporters give monies and later demands an accounting for it or had an expectation of it being tax deductible? Can this open doors for officials to review your records? Can the government official cite an unregistered/unincorporated church for operating illegally (depending on state law)? I think one may be safer, incorporating as a profit making entity. This way they are adhering to the laws of the land but not setting their mission up for scrutiny as it is as a non-profit (seeking funding public and private).

There is one other important factor, we are forced to consider. Lawsuits.... suppose a member or visitor attends your service and falls or become injured. Chances of a lawsuit is very possible. How do you protect your home (if this is your assembly place even for bible study in your home)? Your homeowners may not protect you based on how your home is used? You cannot purchase insurance protection without being an official entity or can you?

If anyone has information regarding these concerns, please let me know. I prefer not to incorporate my ministry; however, PA State Laws seem to require some form of registration in order to operate and recieve funds for service even if there is no profit intended. My goal is host symposiums and special trainings but I am concerned about liabilities, since I am not incorporated.

[Pastor Melvin King]

I thank you all. All of your responses have helped me tremendously. This is a much needed topic, and I am glad to have been exposed to this discussion, howbeit as late as I am in responding. But in this case, better late than never. I have copied and pasted this discussion in it's entirety for further contemplation. Again, thankyou women of God.
Pastor Mel