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.

Written by Maurice Mallory