From: Hermit (hidden@lucifer.com)
Date: Mon Aug 04 2003 - 23:19:40 MDT
I will assume that David Lucifer is primarily interested in "tax exempt status" as incorporation and registration is not needed except for that, and it is not obligatory (although that has risks) even for this purpose, because as long as a church meets the requirements for tax-exempt staus under Section 501(c)(3) of the Internal Revenue Code, it is entitled to act as if it was registered. The risk is that not registering makes it much more likely that an appeal against an IRS ruling would fail. The benefit of registering is that the CoV would likely be able to attract grants and donations from organizations which are themselves organized as non profit organizations and thius proscribed from gifting any organization not so registered.
To qualify as exempt an organization must have certain attributes and pass two classes of tests.
Firstly, an "organizational test". To satisfy this test, an administration would need to be in place, along with an approval system, and a codified set of atricles and bylaws approved by the members in terms of the articles and bylaws*. As noted above, a church is classed as a non-profit organization (whether formally tax exempt or not) and thus the nonprofit corporation law in the state where the church is incorporated governs what must and what may not be included in the articles and bylaws. It should be noted that the IRS requires that the bylaws not exceed or omit what is allowed or required under state guidelines, and the state guidelines tend to change on a regular basis. This is why most churches register a "parent" organization and then affiliated congregations file on a state by state basis.
The second qualification is an "operational test" which requires the organization to operate within its governing documents and qualifications to be tax exempt. All churches must meet both tests at all times.
The IRS and states (because not all states exclude churches of tax obligations) have successfully challenged many self-asserted churches. A reasonable defense would be the above together with organized writings describing the religion and requirements for membership, together with regular scheduled services open to all members.
The church would need to appoint a board resident in the US and if sub-organizations are formed, in each state in which they register. While indemnity can be provided, this falls within the state limitation for indemnity where the organization is registered, where the board members are resident and where they practice their religion. In practice the members of such a board would be jointly and severally liable at least to the IRS for any repayment of any breach or penalty assessed under the IRS codes. In addition the governing board may be held responsible for any civil action taken against the church, or any failure to maintain appropriate records depending on the way in which the indemnities are structured.
To obtain formal recognition as a church from the IRS, we would have to file a Form 1023 (www.irs.gov/pub/irs-pdf/k1023.pdf) (see also Form 1023 help (www.form1023help.com)), which will include the articles and bylaws and any other supporting information, and pay a $500 filing fee. We would also need to obtain an employer identification number (EIN) (no cost) by completing the one-page application, Form SS-4 (http://www.irs.gov/businesses/small/article/0,,id=102767,00.html). Additional information is available at http://www.irs.gov/charities/index.html.
If despite the above we choose to take this route note that all political posts and current affairs and commentary would have to be removed from the BBS as churches (and most other tax-exempt organizations) are not legitimately able to participate in the political process while maintaining 503(c) status. A single complaint could lead to a situation where taxes and penalties, as well as accounting and legal fees become an issue. Secondly all posts made would need to be vetted before posting so as to manage liability issues (although there are ways to minimize the latter which I can discuss off the record).
As to the performance of marriages, I suggest that the simplest answer is to do what I did, and that is to become a minister in some recognized church (when doing so, notice that the founder of the ULC has IIRC been jailed on multiple occassions for tax offenses) and then simply form a schism and continue as an independent church. Registration is required in each state in which marriage ceremonies will be held and the rules vary from state to state (but notice that some states have severe penalties for a minister not performing the paperwork correctly).
As a suggestion, a separate 503(c) could be formed to receive donations and this could then pay the Church a reasonable amount for services actually rendered in arms length transactions (i.e. the board of the Church and the association not for gain should be different people), where the services are provided by members as a gift to the Church. There are a number of "subtle" aspects to this (or indeed any structure involving tax systems), which is why, as I have said before, this should not be discussed in a public forum.
Hermit
*The governing documents must allow the organization to qualify as a church. The absence of any one required item in the appropriate place is sufficient grounds for the IRS to revoke a church's tax-exempt status, with potentially unpleasant consequences for donors, board and officers. The minimum requirements which have to be addressed in Iowa include:
[*] the CoV is intended to be a church.
[*] the CoV is set up to exclusively pursue exempt functions.
[*] the CoV prohibits all forms of inurement and private benefit
[*] the CoV will ensure that any lobbying (influencing legislation or other members) remains within the statutory limits
[*] the CoV prohibits all forms of political activity.
[*] the CoV must establish and document (in the articles or if so elected in the articles, in the bylaws) a conflict of interest and dispute management process.
[*] in the event of the dissolution of the CoV, another tax-exempt organization must receive the assets. This organization must be nominated in the articles or bylaws. Other requirements are prescribed by each state and often the law states whether these must be included in the articles or if they may be contained in the bylaws. The original Codex was intended to provide a basis for these documents.
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