Q. A church has a 403(b) plan in place for their current pastor, who is retiring. The new pastor wants to set up a 403(b). They do not have a 501(c)3 letter from the IRS, and may never have filed for one. They have a Certificate of Exemption for taxes (listed as a Religions Place) from the state and have filed a Not For Profit Corporation with the state. Can they have a 403(b) without having 501(c)3 status? Or is the Not For Profit Corporation filing with the state good sufficient to satisfy tue IRS that they are a non-profit?
A. Churches are automatically considered to be 501(c)(3) organizations as long as they continue to meet the requirements of a tax-exempt organization. And unlike other entities, they do not have to file for a 501(c)(3) letter.