Planting Churches Among the City's Poor - Volume 2

P ART II: C HURCH P LANTING T OOLKIT • 359

III. How does the church get the right to issue tax deductions to its donors? Note: You do not have to incorporate to receive tax deductible gifts. Anyone may give to the church and deduct their gift, regardless of how the church is organized. A. All churches have the authority to receive tax deductible gifts.

B. All churches are exempt from paying federal tax. C. No paperwork needs to be filed to be a church.

IV. What are the advantages and disadvantages of incorporation? A. Advantages 1. Provides some financial protection from lawsuits filed against the leaders and members of the church. If there is no corporation, the leaders and members are liable for all the actions of the church. 2. Helps get liability insurance. 3. Allows for the purchase of property. 4. Provides autonomy from founding institution. 5. Creating a formalized process of membership provides a legal means for exercising spiritual discipline within the church. B. Disadvantages 1. Cumbersome process 2. Costly process V. What is involved with incorporating? A. Select a name for the church. B. Check to see if the name is available. C. Reserve the name with the state. D. File form SS-4 to obtain an federal tax identification number. E. Prepare articles of incorporation. F. Prepare by-laws.

G. File incorporation papers with the state. H. Prepare/file state tax exemption application. I. Prepare and file federal tax exemption application.