CS Tax Law

Federal Tax Law: Again, federal tax law is very complicated, and must be followed exactly, both in the formation of the Corporation Sole, it’s operation, and it’s filing requirements. Following are key provisions related to the CS. Remember that with a CS, instead of asking the IRS’ permission to be a church (as you would with a 1023 application to obtain 501(c)(3) status, you declare the existence of your church under IRC 508(a).

Unlike all other §501(c)(3) organizations, a church is mandatorily presumed (under IRC §508(c)(1)): a.To qualify for exemption under §501(c)(3)

Churches are exempt from filing Form 990. See IRC §6033(a)(2)(A)

Churches are not exempt from either the unrelated business income tax (§511) or the reporting requirements relating to UBIT (Form 990-T)

Church audits are subject to special rules of “reasonable belief” on the part of the IRS and advance notice requirements. See IRC §7611