501 c 3 verification

[JenMO]

Church is 501 c 3 and insurance company wants copy of papers. We can't find, is there a way to get verification or a copy of the exemption papers?

[taxmandan]

Church is 501 c 3 and insurance company wants copy of papers. We can't find, is there a way to get verification or a copy of the exemption papers?

Churches aren't required to file anything with the IRS to establish tax exempt status so there may not be any paperwork. Anyway, Pub 78 is the list of approved tax exempt Charities. http://www.irs.gov/charities/article...=96136,00.html

[JCH]

Churches and schools are tax exempt by the first amendment. They don't need to apply for 501(c)(3) status.

[Koss]

No record

Been there, done that, got the T-shirt.

There are no exemption papers. A church is not required to apply for tax exempt status. A church is automatically tax exempt under the law. An entity that declares itself to be a church is entitled to a basic presumption that it IS a church, provided that it is properly established as the correct type nonprofit entity under the applicable state law. The IRS generally does not challenge this presumption if the EO returns are accurately filed. Challenging the presumption involves a full-blown investigation by the IRS. This is not like asking you to explain how you got the basis on the stock that you sold.

Outsiders don't get it. It's circular logic. I can't prove to you that I'm tax exempt because I'm not required to apply for tax exempt status.

Have the pastor or controller of the church call the IRS Exempt Org section and ask them for a "no record church letter." The IRS will send a letter addressed to the church, with their EIN. What it will say, in plain English, is this:

"We have no record of your tax exempt status. Churches are automatically tax exempt and are not required to apply for tax exempt status. The IRS has not determined whether you are tax exempt. The IRS has not determined whether you are in fact a church. But if you are a church, then you are automatically tax exempt, because that's what the IRC says. We have absolutely no information about your organization in our records. We do not have a process for determining whether you are a church. In response to your inquiry, we are providing an explanation of the law."

In other words, the letter says nothing about the organization itself. But outsiders will read the letter, and see the words "church" and "tax exempt," and the organization's name and EIN, and they'll get a warm fuzzy feeling...

Do not advise your client to file an application for exemption. There is an outrageous fee associated with it, and it is a very bad idea. A church is automatically tax exempt. There is no reason to ask the IRS to determine that the organization is exempt, because it is already exempt as a matter of law.

Burton

[JenMO]

I've copied and highlighted "Organizations not required to file form 1023" from the tax exempt publication. Is there something else I can look up and copy to support my stand? I've looked at the master tax guide, but can't find the wording the way I want.

[Koss]

Try this...

http://www.irs.gov/charities/charitable/article/0,,id=150282,00.html

Maybe get a really high quality color copy of this web page to impress your client's insurance agent. You may have to patiently explain that the IRS only issues tax exemption certificates to groups like the Boy Scouts or United Way. Explain the fee for filing Form 1023, and invite the insurance company to pay it on behalf of the church.

My explanation of the "no record church letter" may have sounded like some of my warped humor, but everything I said in that post is the real thing. I've seen these letters, and somehow people think it proves that the entity is a church, or that it is tax exempt, and it works. If you read the darn thing carefully, it doesn't say much, but like I said, it usually satisfies people who just don't get it. Only takes about two weeks to get this type of letter. Just have the pastor or treasurer call the EO office at the IRS. (It's that phone number that ends in 5500.)

Or try this:

The insurance agent probably understands other types of business entities much better--you know, corporations and partnerships. So find one of your S election letters from another client, and black out the name and EIN. Or get a copy of some state articles of incorporation. No, I am not suggesting that you turn in bogus documents. I'm suggesting something else. Show this sort of thing to the insurance agent, explain that this type of document establishes that a particular taxpayer is a corporation...

and then ask him for documentation that establishes what type of taxpayer HE is.

You should expect a long silence when you ask him to provide documentation that shows that he is an individual (and not a corporation or partnership or LLC).

If he pulls out his social security card, explain that it doesn't say "individual" anywhere on it.

Maybe the whole problem is that this particular insurance agent really isn't a natural person...

I'm still trying to determine whether it is possible get an ITIN for a dog. Ohio has a new law that makes it possible for animals to be beneficiaries of trusts, so this has some really interesting possibilities. Most dogs are under 14, so they wouldn't need a photo ID, according to the W-7 instructions. The county dog license and the vaccination record from the vet's office appear to meet the ID requirements for issuance of an ITIN...

Burton

[MRTAX4EA]

Also Check Guidestar For Church and/or Charitable Info

To expand on the 501(c)(3) issue a bit further, you can verify charitable status and get Adobe copies of Form 990 and Form 990-PF of charitable entitties @ http://www.guidestar.org/ I like the search capabilities of Guidestar. With IRS Pub 78 you need to know the city& state and fairly exact name. Guidestar lets you search by EIN also.

Churches can and do file Form 1023 on occasion to further establish their tax exempt status.

They would still be exempt from filing Form 990 or Form 990-PF.

It proves helpful during an audit since the IRS looks to Pub 78 and raises further questions if the charitable entity is not found.

An example of large church on Guidestar is The Salvation Army. They have 501(c)(3) status, but are not required to file Form 990.