Switch to ADA Accessible Theme
Church Legal Center
Rev. John P. Joseph, Esq. CCA
1683 N Hancock Rd., Suite 103-315
Minneola, FL 34715
Call Us Today to Set an Appointment
  • Facebook
  • Twitter
  • LinkedIn

Loss of Tax Exemption due to Involuntary Dissolution

Dear Clients and Friends:

I am in the process of writing a book on the practical application of church law for church leaders. While researching for my Chapter on Church Dissolution I discovered something I want to share with you.

In this Chapter I discuss how a church can dissolve both Voluntarily and Involuntary. One common reason for Involuntary Dissolution is for failing to do the required Annual Report in the state of incorporation. I have occasionally run into this issue thus my annual reminders to you in the Spring.

Recently I read a Private Letter Ruling (PLR 202242011) which raises the stakes even more.

Here the organization lost its tax exemption because the secretary of state revoked its corporate charter for failing to update and file their annual report. Specifically, a charity filed for its 501©(3) and during the pre-contact planning phase of investigation a Revenue Agent found out its corporate status with its state had been revoked. This was discovered when the IRS agent looked at the state’s website. Although the Agent made several attempts to reach out to the nonprofit on this issue requesting “proof that is is in good standing with the state of incorporation” none was apparently provided.

The IRS concluded, for this and other reasons, its tax exempt status under section 501©(3) “should be revoked”.

Lesson here is clear. First, complete the annual report maintaining the church status as current. Second, when contacted by the IRS – answer their inquiries.

Just a thought.

In Him.

Certification Badges National Association of Parliamentarians

The Church Legal Center is located in Minneola, Florida and serves clients throughout Florida from Jacksonville to Key West.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
Electronic communications, such as emails submitted through forms on this website, do not create an attorney-client relationship with the firm.

No content on this site may be reused in any fashion without written permission from www.ChurchLegalCenter.com
MileMark Media - Practice Growth Solutions

© 2015 - 2024 Church Legal Center. All rights reserved.
This law firm website is managed by MileMark Media.

Contact Form Tab