14 Points

We do not advise on taxes for particular instances of a personal or business nature. The examples stated are references to positions taken by the IRS, published, available by telephone from the IRS and directions to seek proper advice. The Universal Life Church Monastery will not give tax advice of a personal nature. The information above is for organizations and the interactions of individuals with an organization, not individuals per se.

The following is a listing of the 14 Points which the IRS utilizes to assist the agency in determining the classification of an organization as a CHURCH:

1. Distinct legal existence
2. Recognized creed and form of worship
3. Definite and distinct ecclesiastical government
4. Formal code of doctrine and discipline
5. Distinct religious history
6. Membership not associated with any other church or denomination
7. Organization of ordained ministers
8. Ordained ministers selected after completing prescribed courses of studies
9. Literature of its own
10. Established places of worship
11. Regular congregations
12. Regular religious services
13. Sunday schools for religious instruction of the young
14. Schools for preparation of its ministers

 

Depending upon how many of these points a new religious organization has, or plans to have in the future, it may or may not be classified as a church by the IRS. If a classification of church is not made, it is likely that the IRS would then make the classification of the new organization as a "religious organization," which may be tax-exempt also.

Classification alone is just step one. All organizations must be organized and operated for the religious purposes declared in their Beliefs and Practices Statements and conduct business affairs in accepted accounting manners. Classifications may change with changes in organizational practices or purposes.

Tax Exempt Status:

Tax-exempt status can be revoked for cause. There is nothing negative about the classification of "religious organization" as opposed to a classification of the organization as a "church." The only difference would be that the new organization (ministry) would be required to file an informational return each year showing the amount of income and the expenditure of that income. A church would not be required to file a return disclosing its income or expenditures although it may have to file and pay taxes on "unrelated business income."

A new religious organization or even church may be given a temporary two-year exemption status after which the IRS would evaluate the organization to assess whether it has met the regulations and is operating properly, so that a permanent IRS exemption classification can be made.

A religious organization can become a church and a church can become a religious organization depending upon its activities and methods of operation.

The protection of the exempt status is important for all exempt organizations.
Apart from direct inquiries as to general requirements clearly expressed in available informational sources, forms, resources, general educational aids, or ULC specific information, I cannot provide individual tax advice or counseling. The named informational resources and personal experiences support this discourse. No specialized or individualized advice or direction should be taken other than the broadest of understandings and the importance of seeking competent advice and direction. For more detailed advice we suggest the Zondervan Tax and Financial Guide For Churches and Non Profits avaible from the ULC catalog.

Please build your organization, be it classified as a ministry or a church, such that you as a founder feel that the organization could continue even without your personal membership or guidance.