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Start a Nonprofit Under Section 508(c)(1)(A)

Leave the process of forming your church, ministry, or religious organization under Section 508(c)(1)(A) to us

We actually prepare your filing and documents, including your bylaws, and file for you with simple pricing, which includes filing fees. When you get started with us, you’ll receive an email within minutes with a link to schedule your initial consultation with a 508 Compliance Specialist. Our goal is to have your nonprofit filing completed within 21 days.

About The 508 Company

We help churches and religious organizations establish their nonprofits under Section 508(c)(1)(A) — the right way.

508 Compliance BadgeOur membership focuses on compliance while enhancing accountability, stewardship, and trust in 508 churches and ministries.

Forming a nonprofit entity that qualifies to operate under Section 508(c)(1)(A) can be complex. The 508 Company makes it easy.

Fast-track your church or religious organization’s success with our 508 nonprofit formation services. Your 508 Specialist manages the entire process, eliminating hours spent researching and preparing documents, writing your own bylaws, and other time-consuming tasks. You simply review and approve the documents your Specialist prepares. We handle the rest!

What's the difference between operating under Section 508(c)(1)(A) versus 501(c)(3)?

In a nutshell, nonprofits that operate under the banner of 508(c)(1)(A) enjoy the benefit of federal tax-exempt status without having to obtain official recognition from the IRS or file annual tax returns. While these organizations still technically derive their tax-exempt status from Section 501(c)(3), Section 508 exempts them from the filing requirements that apply to all other 501(c)(3) nonprofits. Thus, a 508(c)(1)(A) nonprofit is a special type of 501(c)(3) tax-exempt organization that does not have to report its income or activities to the IRS by filing annual tax returns.

Unbeknownst to most people today, Section 508(c)(1)(A) was specifically added to the Internal Revenue Code to protect the First Amendment rights of churches and other qualified religious organizations when Congress began requiring official IRS recognition of a nonprofit’s tax-exempt status. The statute continues the historical American tradition of exempting churches from rigorous oversight by the federal government, particularly on the issue of taxation and tax liability.

26 U.S. Code § 501 - Exemption from tax on corporations, certain trusts, etc.

(a) Exemption from taxation An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.

(c) List of exempt organizations The following organizations are referred to in subsection (a):

(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

26 U.S. Code § 508 - Special rules with respect to section 501(c)(3) organizations

(a) New organizations must notify Secretary that they are applying for recognition of section 501(c)(3) status

Except as provided in subsection (c), an organization organized after October 9, 1969, shall not be treated as an organization described in section 501(c)(3)—

(1) unless it has given notice to the Secretary in such manner as the Secretary may by regulations prescribe, that it is applying for recognition of such status, or
(2) for any period before the giving of such notice, if such notice is given after the time prescribed by the Secretary by regulations for giving notice under this subsection.

(b) Presumption that organizations are private foundations

Except as provided in subsection (c), any organization (including an organization in existence on October 9, 1969) which is described in section 501(c)(3) and which does not notify the Secretary, at such time and in such manner as the Secretary may by regulations prescribe, that it is not a private foundation shall be presumed to be a private foundation.

(c) Exceptions

(1) Mandatory exceptions

Subsections (a) and (b) shall not apply to—

(A) churches, their integrated auxiliaries, and conventions or associations of churches, or
(B) any organization which is not a private foundation (as defined in section 509(a)) and the gross receipts of which in each taxable year are normally not more than $5,000.

26 U.S. Code § 6033 - Returns by exempt organizations

(a) Organizations required to file

(1) In general
Except as provided in paragraph (3), every organization exempt from taxation under section 501(a) shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and such other information for the purpose of carrying out the internal revenue laws as the Secretary may by forms or regulations prescribe, and shall keep such records, render under oath such statements, make such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe; except that, in the discretion of the Secretary, any organization described in section 401(a) may be relieved from stating in its return any information which is reported in returns filed by the employer which established such organization.

(3) Exceptions from filing

(A) Mandatory exceptions

Paragraph (1) shall not apply to—
(i) churches, their integrated auxiliaries, and conventions or associations of churches

26 U.S. Code § 170 - Charitable, etc., contributions and gifts

(a) Allowance of deduction

(1) General rule
There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary.

(b) Percentage limitations

(1) Individuals

In the case of an individual, the deduction provided in subsection (a) shall be limited as provided in the succeeding subparagraphs.

(A) General rule

       Any charitable contribution to—

(i) a church or a convention or association of churches,
(ii) an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on,
(iii) an organization the principal purpose or functions of which are the providing of medical or hospital care or medical education or medical research, if the organization is a hospital, or if the organization is a medical research organization directly engaged in the continuous active conduct of medical research in conjunction with a hospital, and during the calendar year in which the contribution is made such organization is committed to spend such contributions for such research before January 1 of the fifth calendar year which begins after the date such contribution is made,
(iv) an organization which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501(a)) from the United States or any State or political subdivision thereof or from direct or indirect contributions from the general public, and which is organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of a college or university which is an organization referred to in clause (ii) of this subparagraph and which is an agency or instrumentality of a State or political subdivision thereof, or which is owned or operated by a State or political subdivision thereof or by an agency or instrumentality of one or more States or political subdivisions,
(v) a governmental unit referred to in subsection (c)(1),
(vi) an organization referred to in subsection (c)(2) which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501(a)) from a governmental unit referred to in subsection (c)(1) or from direct or indirect contributions from the general public,
(vii) a private foundation described in subparagraph (F),
(viii) an organization described in section 509(a)(2) or (3), or
(ix) an agricultural research organization directly engaged in the continuous active conduct of agricultural research (as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977) in conjunction with a land-grant college or university (as defined in such section) or a non-land grant college of agriculture (as defined in such section), and during the calendar year in which the contribution is made such organization is committed to spend such contribution for such research before January 1 of the fifth calendar year which begins after the date such contribution is made,

       shall be allowed to the extent that the aggregate of such contributions does not exceed 50 percent of the taxpayer’s contribution base for the taxable year.

(c) Charitable contribution defined

For purposes of this section, the term “charitable contribution” means a contribution or gift to or for the use of—

(1) A State, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes.

(2) A corporation, trust, or community chest, fund, or foundation—

(A) created or organized in the United States or in any possession thereof, or under the law of the United States, any State, the District of Columbia, or any possession of the United States;

(B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals;

(C) no part of the net earnings of which inures to the benefit of any private shareholder or individual; and

(D) which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

A contribution or gift by a corporation to a trust, chest, fund, or foundation shall be deductible by reason of this paragraph only if it is to be used within the United States or any of its possessions exclusively for purposes specified in subparagraph (B). Rules similar to the rules of section 501(j) shall apply for purposes of this paragraph.

(3) A post or organization of war veterans, or an auxiliary unit or society of, or trust or foundation for, any such post or organization—

(A) organized in the United States or any of its possessions, and

(B) no part of the net earnings of which inures to the benefit of any private shareholder or individual.

26 U.S. Code § 509 - Private foundation defined

(a) General rule

For purposes of this title, the term “private foundation” means a domestic or foreign organization described in section 501(c)(3) other than—

(1) an organization described in section 170(b)(1)(A) (other than in clauses (vii) and (viii));

(2) an organization which—

(A) normally receives more than one-third of its support in each taxable year from any combination of—

(i) gifts, grants, contributions, or membership fees, and

(ii) gross receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in an activity which is not an unrelated trade or business (within the meaning of section 513), not including such receipts from any person, or from any bureau or similar agency of a governmental unit (as described in section 170(c)(1)), in any taxable year to the extent such receipts exceed the greater of $5,000 or 1 percent of the organization’s support in such taxable year,

from persons other than disqualified persons (as defined in section 4946) with respect to the organization, from governmental units described in section 170(c)(1), or from organizations described in section 170(b)(1)(A) (other than in clauses (vii) and (viii)), and

(B) normally receives not more than one-third of its support in each taxable year from the sum of—

(i) gross investment income (as defined in subsection (e)) and
(ii) the excess (if any) of the amount of the unrelated business taxable income (as defined in section 512) over the amount of the tax imposed by section 511;

(3) an organization which—

(A) is organized, and at all times thereafter is operated, exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more specified organizations described in paragraph (1) or (2),

(B) is—

(i) operated, supervised, or controlled by one or more organizations described in paragraph (1) or (2),

(ii) supervised or controlled in connection with one or more such organizations, or

(iii) operated in connection with one or more such organizations, and

(C) is not controlled directly or indirectly by one or more disqualified persons (as defined in section 4946) other than foundation managers and other than one or more organizations described in paragraph (1) or (2)

“Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof” – First Amendment of the United States Constitution, Religion Clause, 1789

Benefits of Nonprofits Established Under Section 508(c)(1)(A)

Working With The 508 Company

Get Started

Once you complete our Membership Application, you’ll receive an email within minutes with a link to schedule your initial consultation with a 508 Compliance Specialist. This initial consultation is a crucial step to your Specialist getting a better understanding of your mission and ask any questions they may have as they prepare your nonprofit filing and documents. We know exactly what is required for your filing and will submit the documents that meet those standards. Our goal is to have your nonprofit filing completed within 21 days.

Get Compliant

Once your nonprofit filing is complete, we will work with you through multiple Group Training and Support Sessions to create the first draft of your bylaws within 30 days of filing. Your organization’s bylaws are considered a legal document that dictates how your religious organization must be governed and should be finalized and approved by your board within 6 months of your completed filing. For your peace-of-mind, every aspect of your completed formation documents and policies, including bylaws, have been reviewed by an attorney. Our process saves you hours of time and gives you peace-of-mind knowing that all of your compliance documents, including bylaws, have been carefully and thoroughly reviewed for final approval.

Get Going!

As soon as your board ratifies your bylaws, you’ll be ready to confidently operate as a qualified 508(c)(1)(A) nonprofit organization. Godspeed.

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Dedicated Support

Your 508 Compliance Specialist is available to answer your questions and provide responsive support to your organization.

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Save Hours of Time

Your 508 Compliance Specialist prepares your filing and documents for you and keeps you informed along the way. No need to use various templates to create your own bylaws or other compliance documents and policies.

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Experienced & Knowledgeable

Your 508 Compliance Specialist knows how to help you form and operate your nonprofit organization and will provide you with the knowledge and expertise you need to start and remain 508 compliant.

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Guiding You to Success

As a seasoned nonprofit leader, your 508 Compliance Specialist will have a wealth of practical knowledge about launching and developing a successful nonprofit under Section 508(c)(1)(A).

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Fast Processing

When you get started with us, you’ll receive an email within minutes with a link to schedule your initial consultation with a 508 Compliance Specialist.

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Attorney-Reviewed

For your peace-of-mind, every aspect of your organization’s formation documents and policies, including bylaws, have been reviewed by an attorney to ensure compliance with Section 508.

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Group Training & Support

We know starting a new organization, especially a nonprofit, can be daunting and may be outside your area of expertise. That’s why we provide Group Training and Support Sessions to you at no additional cost.

What's Included?

Frequently Asked Questions

26 U.S. Code § 508 – Special rules with respect to section 501(c)(3) organizations

(a) New organizations must notify Secretary that they are applying for recognition of section 501(c)(3) status

Except as provided in subsection (c), an organization organized after October 9, 1969, shall not be treated as an organization described in section 501(c)(3)—

(1) unless it has given notice to the Secretary in such manner as the Secretary may by regulations prescribe, that it is applying for recognition of such status, or
(2) for any period before the giving of such notice, if such notice is given after the time prescribed by the Secretary by regulations for giving notice under this subsection.

(b) Presumption that organizations are private foundations

Except as provided in subsection (c), any organization (including an organization in existence on October 9, 1969) which is described in section 501(c)(3) and which does not notify the Secretary, at such time and in such manner as the Secretary may by regulations prescribe, that it is not a private foundation shall be presumed to be a private foundation.

(c) Exceptions

(1) Mandatory exceptions

Subsections (a) and (b) shall not apply to—

(A) churches, their integrated auxiliaries, and conventions or associations of churches, or
(B) any organization which is not a private foundation (as defined in section 509(a)) and the gross receipts of which in each taxable year are normally not more than $5,000.

We do the heavy lifting. We actually prepare your documents for you, including your bylaws. Our process saves you hours of time and gives you peace-of-mind knowing that all of your compliance documents, including bylaws, have been carefully and thoroughly reviewed for final approval.

We pair you with a 508 Compliance Specialist. A real person! Your Specialist discusses your mission with you and collects the basic information needed to get started. From there, your specialist actually prepares your documents and sends them to you for you to review. Take advantage of their wealth of experience in setting up churches and religious organizations to operate under Section 508(c)(1)(A).

Once you sign up, you can expect to hear from your 508 Specialist within one business day to schedule your initial consultation.

We actually prepare your filing and documents, including your bylaws, and file for you with simple pricing — $3,200, which includes filing fees.

When you get started with us, you’ll receive an email within minutes with a link to schedule your initial consultation with a 508 Compliance Specialist. Our goal is to have your nonprofit filing completed within 21 days.

All Formation Pricing includes at least the following:

  1. 508 Membership ($50 Per Month)
  2. Basic Name Availability Search
  3. Articles of Incorporation
  4. Certificate of Incorporation
  5. Certificate of Existence/Authorization
  6. SS4 Federal EIN Tax Identification Number
  7. Foreign Entity Filing Into Your State (If Needed)
  8. Registered Agent Services
  9. Attorney-Reviewed Bylaws & Required Policy Documents Created
  10. Customizable & Attorney-Reviewed Organizational Document Templates including Conflict of Interest Policy, Donation Letter, Board Meeting Minutes, Independent Contractor Agreements, and More
  11. Customizable & Accountant-Reviewed Financial Document Templates
  12. Group Training and Support Sessions

As little as 3 to 4 weeks! When you get started with us, you’ll receive an email within minutes with a link to schedule your initial consultation with a 508 Compliance Specialist. Our goal is to have your new 508(c)(1)(A) filing completed within 21 days but the process can take more than 30 days due to circumstances outside our control.

We will then work with you through multiple Group Training and Support sessions to create the first draft of your bylaws within 30 days of filing. Your organization’s bylaws are considered a legal document that dictates how your religious organization must be governed and should be finalized and approved by your board within 6 months of your completed filing. For your peace-of-mind, every aspect of your formation documents and policies, including bylaws, have been reviewed by an attorney to ensure full legal compliance.

Yes, we do! We ask for a little bit of information from you when you complete our online application form, such as your religious organization’s name, brief mission details, and your contact information. Your 508 Compliance Specialist reviews that information and discusses the details with you. We will then prepare all your required formation documents and complete your filing.

Your 508 Specialist manages the entire process, eliminating hours spent researching and preparing documents, writing your own bylaws, and other time-consuming tasks.

Yes. Religious organizations that qualify to operate under Section 508(c)(1)(A) are a special kind of 501(c)(3) nonprofit that enjoy tax-exempt status without obtaining official recognition from the IRS.

Congress has enacted special tax laws that apply to churches, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment of the Constitution of the United States. Churches and religious organizations are generally exempt from income tax and receive other favorable treatment under the tax law; however, certain income of a church or religious organization may be subject to tax, such as income from an unrelated business.

Section 508 allows any religious nonprofit that meets the IRS’ definition of a “church” (see next FAQ below) to claim 508(c)(1)(A) status. Some examples of ministries or programs that could be structured to satisfy this standard include:

  • Abuse Ministry
  • Addiction Ministry
  • Chaplaincy Program
  • Church (Local In-Person)
  • Church (Virtual or Online)
  • Discipleship Program or Ministry
  • Divorce Ministry or Support Group
  • Drug or Alcohol Ministry
  • Elderly Ministry
  • Homeschool or Co-op Group
  • Mentoring Program
  • Music Program or Ministry
  • Resource Materials
  • School (In-Person or Virtual/Online)
  • Family Ministry
  • Friendship/Fellowship Ministry
  • Handicapped Ministry
  • Healing Ministry or Service
  • Home Visitation Ministry
  • Homeless Program or Ministry
  • Hospital Ministry
  • Marriage Counselor
  • Marriage or Singles Ministry
  • Men’s Ministry
  • Overcomers Ministry
  • Parachurch Organization or Ministry
  • Prayer Ministry
  • Pregnancy or New Mother’s Ministry
  • Sign Language Ministry
  • Special Needs Ministry
  • Substance Abuse Ministry
  • Victims Ministry
  • Widows Ministry
  • Women’s Ministry
  • Youth Crisis Ministry
  • Youth Group or Ministry

The term church is found, but not specifically defined, in the Internal Revenue Code (IRC). However, the use of the term church also includes conventions and associations of churches as well as integrated auxiliaries of a church. According to the IRS, they use term church in its generic sense as a place of worship. Therefore, when The 508 Company refers to churches, we are also referring to home fellowships, synagogues, mosques, temples, and other houses of worship.

In analyzing whether a religious organization may properly be characterized as a church for purposes of Section 508(c)(1)(A), the IRS considers whether the organization has at least some of the following characteristics. These attributes of a church have been developed by the IRS and by court decisions. They include:

  1. a distinct legal existence,
  2. a recognized creed and form of worship,
  3. a definite and distinct ecclesiastical government,
  4. a formal code of doctrine and discipline,
  5. a distinct religious history,
  6. a membership not associated with any other church or denomination,
  7. an organization of ordained ministers,
  8. ordained ministers selected after completing prescribed studies,
  9. a literature of its own,
  10. established places of worship,
  11. regular congregations,
  12. regular religious services,
  13. schools for religious instruction of the young,
  14. schools for the preparation of its ministers, and
  15. any other facts and circumstances that may bear upon the organization’s claim for church status.

The IRS makes no attempt to evaluate the content of whatever doctrine a particular organization claims is religious, provided the particular beliefs of the organization are truly and sincerely held by those professing them and the practices and rites associated with the organization’s belief or creed are not illegal or contrary to clearly defined public policy.

The 508 Company will work with you during the formation process to ensure your religious organization possesses enough of the above characteristics, thereby assuring your organization qualifies for operation under Section 508.

 

The term integrated auxiliary of a church refers to a class of organizations that are related to a church or convention or association of churches, but are not such organizations themselves. In general, the IRS will treat an organization that meets the following three requirements as an integrated auxiliary of a church. The organization must:

  • Be described both as an Internal Revenue Code section 501(c)(3) organization and be a public charity under Code section 509(a)(1), (2), or (3),
  • Be affiliated with a church or convention or association of churches, and
  • Receive financial support primarily from internal church sources as opposed to public or governmental sources.

Men’s and women’s organizations, seminaries, mission societies, and youth groups, etc that satisfy the first two requirements above are considered integrated auxiliaries whether or not they meet the internal support requirement.

We work with clients who are in a variety of stages of planning. To get started, we need you to complete our Membership Application. This simple form includes your contact information and some basic organization information. Once you complete our Membership Application, you’ll receive an email within minutes with a link to schedule your initial consultation with a 508 Compliance Specialist. This initial consultation is a crucial step to your Specialist getting a better understanding of your mission and ask any questions they may have as they prepare your nonprofit filing and documents for filing.

If you have questions about our services or how to form a religious nonprofit that falls under 508(c)(1)(A), please contact us to speak with a representative.

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$300 per month helps one organization reclassify. $100 per month helps one reclassified organization stay on top of their compliance.