What is a "Legal Corporation Sole?"
A Corporation Sole is an incorporated Office of a church or spiritual organization, established to manage its’ assets, finances, and operations. It is a Corporation Sole because the Office is filled by one person – the head of the church or spiritual organization. I use the term "legal" because many Corporation Soles have in the past been formed by amateurs and have been found to be illegal.
FREE ADVICE: Have your Corporation Sole formed, or upgraded, by someone with legal experience – there are many complicated areas of law involved, and because amateurs and anti-tax, anti-government individuals have attempted to use the Corporation Sole for non-religious purposes, the IRS is auditing many of them.
If Formed and Operated Correctly, a Corporation Sole can Allow You to Legally Conduct Your Spiritual Activities.
The IRS specifically recognizes the Corporation Sole as a legitimate form of organization for a church. Be careful to form your Corporation Sole correctly, or if you already have one, you may want to have your paperwork and your operations reviewed to make sure that you are acting legally and safely.
Have you Received an IRS Letter or Audit Notice Regarding Your Corporation Sole?
Because of past misuse of Corporation Soles by people trying to avoid taxes, hide assets, do estate planning or operate businesses, the IRS is currently investigating and auditing many of them. At present, there is one way to re-organize that the IRS will accept as long as you meet the primary criteria for a church or spiritual organization.
If you have received a letter, of course it can be stressful, yet the best thing you can do is get advice early and take action to correct any errors. If you respond soon and openly, the IRS is generally much friendlier.
Make Sure your Corporation Sole Advisor has appropriate Legal and Tax Knowledge
Areas of law that you must comply with: Statutory Law (correct filing, annual reporting, use of Resident Agents); Federal Tax Law (make use of expenses, Minister’s Stipend, set up proper Independent Contractor Agreements or Employer Agreements, Real Estate law (take title in correct name, file appropriate documents with State), Non-Profit Law (regarding private inurement, commingling of assets, political activities, and many more issues).
Disclaimer: I am acting as a corporate advisor for you, NOT as an attorney unless I agree to advise or represent you as an attorney in writing. The information on this website is legal information only, not legal advice. I can help you with federal legal issues regarding corporation sole in any State, and refer you to State resources where needed. Your reading information on this site does not form an attorney-client relationship.