What is a Church Controlled Organization?

Church-controlled organizations are tax-exempt organizations that are controlled by an entity that engages primarily in the act of non-profit worship and community services. Church-controlled organizations can be a part of any religion, though whether the organization is engaged specifically in religious worship may need to be determined by the IRS. A church-controlled organization can be either qualified or non-qualified. Qualified church-controlled organizations include entities such as seminaries and schools. Non-qualified church-controlled organizations include hospitals, daycare, and retirement homes. Both of these organizations are generally non-profit organizations that are 501(3)(c), but some of them are able to invest in retirement plans and other investment plans that the church maintains.

A church-controlled organization will need an Employer Identification Number even if it doesn’t hire employees or sell goods, because it is a separate entity from the church. Churches and church-controlled organizations still need to file tax returns even if they are tax exempt, and they will use their specific Church EIN to file for tax exempt status.