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IV. Government Regulations and Procedures

A. Bulk Mail Permit | B. Tax Exempt Status 501(C)(3) | C. “When Faith and Politics Clash” - Article on Tax - Exempt Status | D. Tax ID / Employee Identification Number | E. Incorporating Your Church

INDEX

B. Tax Exempt Status 501(c)(3) for Covenant Congregations

INTRODUCTION
All church congregations need to have IRS status as a 501(c)(3) corporation. Among other things, this status allows contributions made to the church to be deductible by the donors.

PRESENTATION
Congregations affiliated with The Evangelical Covenant Church can avoid the long and arduous process of applying for 501(c)(3) status through inclusion under the “Group Exemption” granted the denomination by the IRS. To be included under this “Group Exemption”, a church must accomplish these steps:

1. Be incorporated as a non-profit corporation (see section on “How to Incorporate Your Church”).
2. Have an Employer Identification Number (EIN) issued by the IRS (see section on “How to Apply for Employer Identification Number”).
3. Be considered a “Covenant” fellowship group or congregation by the Department of Church Growth & Evangelism
4. Send a letter to the Secretary of the Covenant formally requesting inclusion under the Covenant's 501(c)(3) group exemption.

It is possible for a congregation to unknowingly operate for years without 501(c)(3) status. This puts the deductible status of all contributions at risk. Therefore, each congregation should take steps to insure inclusion as soon as the first three steps above have been completed and as early in the life of the church as possible.

As part of this process you will receive a letter from the Secretary of the Covenant giving IRS information including the denomination’s EIN. The only reason to ever use this number is if you are applying for a bulk mailing permit from the U.S. Post Office.

If you don't know if your congregation is included under the group exemption, call the Secretary of the Covenant at 773-784-3000.

The Evangelical Covenant Church
5101 North Francisco Avenue
Chicago, IL 60625

TO: The Secretary

We understand that the Internal Revenue Service has issued to The Evangelical Covenant Church a “Group Exemption” which includes, in addition to the denomination, local churches, regional conferences, and certain other organizations and agencies of the denomination. We further understand that this “Group Exemption” establishes the exempt status of each included affiliated organization as an organization described in Section 501 (c)(3) of the Internal Revenue Code.

This letter authorizes you to include the undersigned in the “Group Exemption” of The Evangelical Covenant Church.

Very truly yours,

(church name inserted here)

By: ___________________________________________________, Pastor

Date: ____________________________   20_______

E.IN.# _______________________________________

MEMO

TO: Rev. (Name)
Covenant Church

FROM: Corporate Secretary of the Covenant

DATE: June 1, 2001

SUBJECT: Tax-exempt status for your church and qualification of contributions as deductible from income taxation

The Evangelical Covenant Church has received from the Internal Revenue Service a “Group Exemption” which includes local churches, regional conferences, and certain other organizations and agencies of the denomination. The inclusion of your church is not automatic. There are two actions which you must take:

1. Your church must authorize the inclusion of your congregation in the “Group.”
2. Your church must have an Employer Identification Number.

The purpose of this memo is to provide the opportunity for your church to be included and thus qualify under Section 501(c)(3) of the Internal Revenue Service Code as “...exempt from Federal income tax....” If you wish to have your church included, please do the following:

1. Sign the enclosed authorization letter and return it to the Office of the Secretary.
2. If your church already has an Employer Identification Number, please return the enclosed form signed by you and indicate what your church's number is. If you do not have a number, please take the form to your local IRS Office for processing. When you receive your EIN, please send that number to us for our records.