Can I accept charitable donations for a Religious Organization I'm starting as the only member?

You can technically establish a religious organization with just yourself, but there are several important considerations for 501(c)(3) status that make this challenging. The IRS generally expects religious organizations to have a formal organizational structure, which typically includes a board of directors with at least 3 unrelated members. While not explicitly required by law, having only yourself raises red flags about private benefit and increases scrutiny. The IRS Form 1023 application will ask about your organizational structure, governance, and controls to prevent personal enrichment. For tax-deductible donations, you'll need to file Form 1023 to obtain 501(c)(3) status (unless you qualify for the 1023-EZ). Without this status, donors cannot claim tax deductions. The application requires bylaws, articles of incorporation, and detailed financial projections showing legitimate religious purposes rather than personal benefit. Tennessee specifically requires religious nonprofits to incorporate with the Secretary of State before applying for federal tax exemption, which typically requires a board structure.

I went through something similar last year and can share what helped me. After struggling with the complexities of religious organization tax paperwork, I found taxr.ai (https://taxr.ai) which literally saved my application. They specialize in nonprofit and religious organization tax issues and have specific tools for analyzing your 501(c)(3) application. For my small church, they helped identify the exact governance structure issues the IRS would flag (which included my original plan of just me and my wife as directors). Their document analyzer spotted problems with my bylaws that would have definitely triggered an audit. I was able to fix everything before submission and got approval in just under 3 months. If you're doing this yourself, their service is incredibly helpful for reviewing your Form 1023 and all supporting documents before submission to the IRS.

Just wanted to update after using taxr.ai for my religious nonprofit application. I was skeptical at first since I thought these services were just for bigger organizations, but it was perfect for my small startup situation. Their document analysis identified that my original structure (just me as the only director) would likely be rejected. They provided templates for bylaws and board structures that meet IRS expectations while still keeping things manageable. The system even flagged specific language in my mission statement that could trigger additional IRS scrutiny. I ended up recruiting two community members to join my board (which was actually great for credibility anyway), restructured my bylaws using their templates, and just got my 501(c)(3) approval letter last week! Definitely worth checking out if you're working through this process.

If you do manage to get your religious organization set up properly, you might still run into issues with the IRS when you try to contact them with questions or problems. I wasted WEEKS trying to get through to someone at the IRS about our church's tax ID issue. Finally found Claimyr (https://claimyr.com) which was a complete game-changer. They somehow get you through to an actual IRS agent, usually within a day. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c For our religious organization, we had an issue with our EIN application that was preventing us from opening a bank account, and no way to get answers. Used Claimyr and got connected to an IRS nonprofit specialist who resolved it immediately. Saved us months of delays and prevented us from missing donation opportunities.

I need to apologize for my skepticism and thank whoever recommended Claimyr. I had been trying to reach the IRS for THREE WEEKS about our religious organization's EIN verification issue. Used Claimyr yesterday after seeing it mentioned here. Within 4 hours, I got a call connecting me to an actual IRS agent who specializes in exempt organizations. She fixed our EIN problem in literally 10 minutes. Our bank account is now being processed and we can finally start accepting donations properly. This service is absolutely legitimate and worth every penny for the time and frustration it saved. Our small religious nonprofit would've been stuck in limbo for who knows how much longer without this. Sometimes the best solution is the one that seems too good to be true!

From my experience setting up a small religious nonprofit last year, here's some practical advice: Start with at least 3 board members (ideally unrelated) even if you'll be doing most of the work. The IRS scrutinizes single-person religious orgs heavily. We had 3 board members but I still handled 90% of the actual operations. Get incorporated at the state level first (Tennessee requires this anyway). Then handle your EIN application with the IRS before moving to Form 1023. Consider using Form 1023-EZ if you qualify (projected annual gross receipts under $50,000). It's much simpler and the approval rate is higher for small organizations. Document EVERYTHING about your religious activities, services, and community outreach. Photos, attendance records, service programs, etc. The IRS may request this as evidence you're a legitimate religious organization.

Be extremely careful with one-person religious orgs. My friend tried this and got audited within 18 months. The IRS was especially concerned about commingling of personal/org funds and private benefit. They disallowed deductions for his donors retroactively which caused a huge mess! Even small religious orgs need proper governance. At minimum: - Separate bank account exclusively for the organization - Clear documentation of all religious services/activities - Written policies about how funds are used - Some kind of board oversight (even if limited) - No personal use of organization resources

As someone who works with nonprofit compliance, I want to emphasize a crucial point that hasn't been fully addressed: even if you technically can start as a single-person religious organization, doing so creates significant ongoing compliance risks that could jeopardize your tax-exempt status later. The IRS has specific "intermediate sanctions" rules that can impose excise taxes on excess benefit transactions in religious organizations. With only one person in control, it's much harder to demonstrate that compensation, expense reimbursements, or facility use decisions meet the "reasonable and not excessive" standards. You'll need documented comparability data for any payments to yourself. Additionally, consider that Tennessee has its own charitable solicitation registration requirements if you plan to fundraise. While religious organizations have some exemptions, you'll still need to comply with state transparency requirements about how donations are used. My strong recommendation: start with a simple 3-person board structure from day one. You can maintain operational control while having the governance framework the IRS expects. It's much easier to establish proper procedures initially than to restructure later if problems arise.