The IRS has certain “tests” that it uses in determining whether an organization is tax-exempt or not.  To satisfy the IRS standards, an organization applying for section 501c3 tax-exempt status must use some very specific language in its church articles of incorporation. Failure to do so will result in rejection of its tax-exempt status.

Not just any language will do. The required statements and representations must be specifically worded and are largely limiting. Unfortunately, many church planters merely request a nonprofit entities “form” from their state office, complete it and file it. But most of those “boilerplate” forms do NOT include the language that is required to satisfy IRS standards.

For most states, the IRS requires additional, specific “dissolution” language regarding the treatment of an organization’s assets in the event of dissolution. Many organizations are denied exempt status merely for failing to include the appropriate statements in their church articles of incorporation.

The “dissolution” language is also important because it helps to protect the integrity of a dissolved church’s assets. By failing to carefully consider and include dissolution language in the articles — electing to use generic statements instead — a dissolving church may unwittingly subject its assets to uses that may offend its values and principles. That would be unfortunate and irresponsible.

The amazing church-starting resource you'll find on this site--Building On Faith: Everything You Need To Know About Starting Your Own Church--makes writing the church articles of incorporation simple and nearly foolproof. In Chapter 4, “Incorporate The Church,” Appendix A, you get an articles template that includes all the specific language to satisfy IRS standards. You also get the crucial statements regarding the treatment of a church’s assets upon dissolution.

The process of incorporation is laid out clearly and simply in a step-by-step format. Form letters and directions for how to secure the corporate name you want are provided. The discussion of each step includes important information that only comes with experience.

In addition, you get a state “Road Map” that includes additional information and directions for your specific state. The Road Map includes a citation and website address where you’ll find your state’s nonprofit corporation law. The Road Map gives further tips on what state law requires in the church articles of incorporation and bylaws, including incorporation procedures, board and membership quorum requirements, officer appointments, and the like. It’s all necessary information as it impacts the construction of your charter.

There is so much to be gained from what is arguably the gold standard in use today by new church start-ups throughout America. And its written by Abe Hernandez, Esq., a devoted Christian and church law expert.