Is Your Ministry on an IRS List?
By Raul Rivera
There are two lists that you need to know about that have been compiled by the IRS. The first list, known as Publication 78, is one you want to be on, while the second; known as the Nonfiler Automatic Revocation List, is one you never want to be a part of. On which list is your ministry?
Let me give you a quick rundown of each list.
List 1
Publication 78: Every single ministry and church that has ever applied for 501(c)(3) status should appear on this list. This list is important because it lets the world know that your ministry is a public charity. Churches that do not apply for 501(c)(3) do not get put on this list, and there are some serious consequences that can arise from not being on Publication 78. Recent court decisions have taken away the automatic presumption of tax-exempt status for churches unless they appear on the list. If a member in your church ever gets audited for his/her tax deductions of tithes and offerings to your church, the IRS will check to see if the church is on Publication 78. If the church is not listed on that publication, the member will have to prove to the IRS that the church meets the IRS 501(c)(3) requirements in order to get a tax deduction.
List 2
Nonfiler Automatic Revocation List: On August 17, 2006 a new law was passed requiring that all non-church ministries file a tax return each year. The law required 100% of all non-church ministries to file 990 tax returns each year. If an organization does not file for three consecutive years, the law provides that the organization automatically loses its tax-exempt status. Loss of exempt status means an organization must file income tax returns and pay income tax, and its contributors will not be able to deduct their donations. The IRS released a statement in February that it will soon publish their list of all such organizations, including the name of the organization and its Employer Identification Number (EIN). If your ministry appears on that list it will have to reapply for 501(c)(3) status or pay taxes like a regular for profit business.
On which list is my ministry?
If you are not sure about your ministry's status, call us and we can look it up for you. In short, if you started your ministry in 2008, then you have until May 16th to file your organization's 990 tax return. If you have not filed any returns since you started the ministry, and you do not file one by May 16th, your ministry will automatically be placed on the Nonfiler Automatic Revocation List.
My ministry has never been on either list
Many pastors start separate ministries from their churches because they often get invitations to speak at other churches. The way they do it is that they incorporate the ministry and/or get a tax ID number, but they never file for 501(c)(3) status. The law under section 508(a)(1) makes it clear that unless a ministry files for 501(c)(3) status, it will not be treated as tax exempt and must file tax returns and pay income tax. Moreover, donations to that ministry are not tax deductible.
How we can help
The truth is, there is no greater time to get your house in order than now! Legistlation that is hostle toward the church is being passed all the time. It is critical to the life and legacy of your church that you make sure you are on the right list. And that’s what StartCHURCH is all about. For the last 17 years our mission at StartCHURCH has been to help churches and ministries have the strongest legal foundation possible. Our staff are trained and prepared to help you make sure you are on the right list. We encourage you to let 2011 be the year of establishing the roots of the church deep. If we can be of any help to you, please give us a call at 770-638-3444.
If you have a ministry that has not filed for 501(c)(3) status and you would like our team of trained specialists to walk your ministry through that process, we can help you get IRS approval. You will be connected directly to one of our trained consultants who will take time to interview you, review any current documents your ministry has, and help prepare all of the necessary documentation needed to see your ministry through to completion. You no longer need to put off what you know is good stewardship of your ministry, just because the process is unfamiliar or overwhelming.