Can anyone incorporate as an individual in a nonprofit, religious entity and avoid paying taxes? Learn the facts before trying this well-known tax avoidance scheme!
To be considered a religious, nonprofit entity, an organization must meet very specific IRS guidelines. There are a number of statues, under the heading Corporation Sole, that give church leaders (usually bishops or parsons) the ability to incorporate as individuals in order to be recognized as separate from the ownership of the church and its assets.
Over the years, con artists have taken these Corporation Sole statues and tried to use them to convince taxpayers that they too can incorporate as individuals in a nonprofit, religious entity in order to avoid paying federal income tax.
They charge upwards of $1,000 for a spot in an exclusive workshop aimed at educating people on how they can keep from paying federal income taxes, child support and other personal debts.
Please don’t be tempted by these sleazy swindlers. If you’re lucky, you’ll only end up paying more money in the long run to the IRS and escape time in the federal penitentiary.
The best way to avoid a tax evasion conviction and tax penalties is to ensure you’re in compliance with federal tax law. It’s so easy to be tempted into bending the rules a little in hopes of reducing one’s federal tax obligation. And scammers know this. That’s why they offer these seminars and spend so much time and effort trying to convince you that their methods are sound.
If you’ve swallowed their tax scheme and purchased their packets or books or whatever… you’ve been scammed. If you follow their advice you will be found out and will become a criminal!
Ask Yourself a few Questions
Before you make what could be the biggest mistake of your life you should ask yourself a couple of questions:
- If I do this am I hiding income or assets?
- Is the intention of doing this to evade paying taxes?
Answering “yes” to one or both of these questions means you are headed down a dangerous road. If you see an ad saying that Corporation Sole laws provide a legal way to avoid paying child support, income taxes or even debt by creating a tax exempt entity and hiding assets in it, we recommend ignoring it.
Tax shelters and evasion are illegal. If you want to ensure you’re paying only your “fair share” of taxes, obtain a reputable tax professional. Relying on the legal advice of shysters is a dangerous proposition at best.