The 508(c)(1)(a) Initiative Workshop

private asset protection. Under Federal law a 508(c)(1)(a) is automatically tax
exempt at the Federal level.
4. Can give tax deductible receipts for donations.
5. Freedom of Speech, as indicated in item 2 above, including, but not limited
to, politics, referendums, initiatives, and candidates.
6. Can ordain and license it’s own leaders.
7. With proper filing with the state, it may receive a sales tax exemption
certificate.
Note: Not all states will allow a 508 to be sales tax exempt. Contact your
Dept. of Revenue for details.
8. Providing the state certificate of organization and state exemption of sales tax
can be proof of exemption from property tax on a church related structure
(This is true for only a single property).
9. The 508(c)(1)(a) operating as a church, may or may not have paid employees or
clergy. Best case is to not have payed employees. It is best case to have
clergy who have a secular job to secure their private income. (exception is
listed in Note 9a)
Note 9a: There is an exception to having clergy or persons in the capacity of paid
employees. It is possible to have clergy or employees as “Private Contractors”.
The benefit is they are not employees, and the only paperwork required of the
church is to file a 1099 Misc Income Statement. This will still require filing for an
Employer Identification Number (EIN). This is the recommended way to distribute
compensation.
In the case where there is a need for a paid employee, the rules of Employment
Tax in IRS publication 1828 must be met (starting on page 21)
(https://www.irs.gov/pub/irs-pdf/p1828.pdf). This is not the recommended
procedure, see Note 9a.
In the instance of a paid clergy, the Special Rules for Ministers must be met
(starting on page 22) (https://www.irs.gov/pub/irspdf/p1828.pdf). This is not the
recommended procedure, see Note 9a.
In either case, this would REQUIRE the 508(c)(1)(a) church to file the SS4
Federal form to obtain an Employer Identification Number (EIN). This is a free
filing and can be done online.
10. It is highly recommended that all who wish to form a 508(c)(1)(a) church and
have paid staff or priest (rather than private contractors) that they should read
IRS Publication 1828 in it’s entirety.
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