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

4. The First amendment church does work well with a small group, with no intent on
any paid staff, and have no concerns about tithes not being tax deductible.
5. The 508 lends itself to a higher level of personal protection regarding liability.
6. The 508 may allow for sales tax exemption. NOTE: Not all states will allow a
508 to be sales tax exempt however. Contact your Dept. of Revenue for
details.
7. The 508 will allow for property tax exemption (on the first property). If your church
has a second property or possible support a subordinate “collection” of churches,
filing a 501(c)(3) is also recommended.
NOTE: Not all states will allow a 508 to be property tax exempt. Contact
your Dept. of Revenue for details.
8. The First Amendment Church allows for total and complete separation from any
state or federal influence
9. The First Amendment Church has no protection against personal liability.
10. The 508 makes a legally clean path in case of paid employees.
11. The 508 will allow for non church income in some cases, for example, church
related clothing sales, church related bake sales, etc. This is also spelled out in
IRS Publication 1828.
12. The 508(c)(1)(a) establishes the church as a not-for-profit entity, and protects the
church itself from government reporting and taxation. None the less, it does not
protect against the requirement to report income paid to clergy or employees.
Note1: All 50 states allow you to register as a 508(c)(1)(a) Faith Based
Organization or Church. Here is how it works:
There is no such thing as a separate law to form a 508(c)(1)(a). A 508(c)(1)(a) is
actually a 501(c)(3) REGISTERED WITH THE STATE ONLY. You go to their
website, and I assume all allow online filings, and you will go to the link to create
a nonprofit or not-for-profit.
On the Articles of incorporation, you will fill it out exactly as you would a 501(c)(3)
with the organization name. They will ask on the form what your primary
purpose is, simply enter “We are operating as a 508(c)(1)(a)”. Poof, you
organization is now a 508(c)(1)(a). Specify this in your charter/bylaws also.
That is it, you do not need to file for any status to the Federal Government. The
exception is if you have a paid priest or employees, and that was discussed in
detail earlier in this document.
Now you have the right to file for sales tax exemption and possibly property tax
exemption if you decide to own a physical building.
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