What is a Church-Controlled Organization? | IRS Definition of a Church-Controlled Organization

A church-controlled organization starts with a big decision; because with a church-controlled organization, you can either be considered qualified or non-qualified in the eyes of the Internal Revenue Service.

A qualified church-controlled organization is also considered to be a church-controlled 501(c)(3) tax-exempt organization. To be one of these organizations, you do not offer any types of services or goods for sale to the public. You also have less than 25% of all financial support coming from grants from the government or from goods and services that come from business activity. An example would be a primary church or church school.

A non-qualified church-controlled organization refers to a tax-exempt organization that offers goods, services, as well as facilities for sale. They also normally will have more than 25% of all revenue coming from government sources or the sale of goods or services. An example would be a church-affiliated hospital or university.

Both of these qualified and unqualified Church Organizations will need to obtain a Church Tax ID Number in order to open a bank account for a Church.