The Freedom People has released a new educational guide explaining how qualifying faith-based organizations (FBOs) may achieve federal tax-exempt status under Internal Revenue Code Section 508(c)(1)(A) without submitting an application to the Internal Revenue Service.
-- The guide addresses a common point of confusion for organizers and administrators who assume that formal IRS recognition is always required to obtain tax-exempt treatment, noting that certain faith-based organizations may be treated as tax-exempt by operation of law, provided they meet applicable criteria, even if they do not file an application for recognition.
More details can be found at https://thefreedompeople.org/blog/what-is-a-508c1a/
The guide explains that Section 508(c)(1)(A) functions as an exception to the general rule that new tax-exempt organizations must notify the IRS and seek recognition. While most organizations pursue exemption by filing under Section 501(c)(3), the tax code allows qualifying Faith-Based Organizations to rely on a statutory exemption without completing that application process. The Freedom People note that misunderstanding this distinction often leads organizations to take unnecessary administrative steps or overlook important compliance considerations.
The resource outlines how exemption without application works in practical terms. It explains the difference between being tax-exempt under the law and holding an IRS determination letter, which some organizations still choose to obtain for administrative or operational reasons. The guide also clarifies how gross-receipt thresholds, organizational structure, and ongoing activities can affect whether the exception is relevant in a given situation.
In addition, the guide compares exemption under Section 508(c)(1)(A) with the standard 501(c)(3) filing pathway, highlighting how reporting and oversight obligations can differ depending on how an organization proceeds.
The Freedom People emphasizes that exemption without IRS application does not remove all responsibilities. Organizations relying on statutory exemption must still operate within the boundaries of federal tax law, including rules related to organizational purpose, recordkeeping, and applicable employment or business-activity obligations.
“Many organizations conflate IRS recognition with tax-exempt status itself,” said a representative of The Freedom People. “This guide was created to explain how the law actually works, so Faith-Based Organizations can make informed decisions about whether an application is necessary for their specific circumstances.”
Alongside the guide, The Freedom People assists individuals and organizations seeking to establish FBOs and private membership associations (PMAs). The organization explains that this support covers foundational setup considerations, including PMA structures, co-trustee arrangements, and alignment with faith-based organizational requirements. As part of its process, The Freedom People offers complimentary 15-minute online consultations for those seeking general clarification on PMAs, 508(c)(1)(A), and related organizational options.
Interested parties can find additional information at https://thefreedompeople.org/
Contact Info:
Name: Doug Freedom
Email: Send Email
Organization: The Freedom People
Address: 1753 E Broadway Rd Ste 101, Tempe, AZ 85282, United States
Website: https://thefreedompeople.org
Source: PressCable
Release ID: 89183064
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