For US Congregations
New Requirement If You Are Not Registered as a 501(c)(3)
In 2021 Congress enacted the Federal Corporate Transparency Act [Title 31 of the US Code, § 5336]. Among other things, this law and the implementing regulations require:
- “small business” entities (corporations, etc.) in existence as of January 1, 2024, with fewer than 21 employees and $5 Million in annual income, to disclose their “beneficial ownership” by shareholders, partners, members, etc. to the Federal government by registration by January 1, 2025;
- all such entities formed after January 1, 2024 to register within 90 days of formation.
These disclosure requirements apply to all “small business” corporations, partnerships, limited liability companies, etc., organized in accordance with State law, even if you have a Federal Tax ID Number, file tax returns, etc.
However, as a general proposition, houses of worship are exempt from registration as long as they satisfy the requirements for tax exemption pursuant to § 501(c) of the Internal Revenue Code. Accordingly, if you are a 501(c)(3) tax exempt organization you most likely don’t have to register.
However, if you have not qualified for “recognition of tax exemption” (for example, because you rely on the “considered to be tax exempt” rule), or if you have not filed your last three years of tax returns, etc., you may be required to register. Similarly, if you have organized subsidiary or affiliated entities, they may have to register. A current article explaining when nonprofits have to register may be accessed here.
For anyone who is required to register, you can use the on-line filing system.
If you have not already done so, please consult with your accountant(s) and tax advisors to determine if your entity(ies) is(are) required to register or are exempt.
