There's a great deal of information on the internet these days about an entity known as the "corporation sole" or "corporate sole." Most of the corporation sole web sites have been put up by the same people who are trying to sell the corporation sole. It's usually not very inexpensive to buy one, either. If the corporation sole actually accomplished everything the salesmen claim, then it would be a bargain. But that's a big if.
The reason this site is here is because we're troubled over the fact that the corporation sole salesmen are only giving one side of the story. None of their sites, in our estimation, are particularly objective, and many of them are promulgating information that is highly questionable. In searching the internet we found many sites selling the corporation sole, but few if any that give the other side of the story.
Before making a decision, you might want to ensure that you're getting the whole story. We're not trying to sell anything here. All we're trying to do is make sure that people are given a legitimate opportunity to make an informed decision about an issue that may have far more onerous consequences than the corporation sole salesmen portray.
The intended purpose of the corporation sole, according to the state statutes of those states which still permit the formation of the corporation sole, is to provide a legal way of organizing a church or religious organization, or for organizing a "religious office" that may hold title to real property that is used exclusively for religious purposes. The "personal inurement" prohibitions that apply to any religious nonprofit corporation apply just as equally to any religious corporation sole.
Other types of non-profit corporations may not adequately address the special needs that certain churches and ministries have, such as church governance. For example, the typical religious non-profit corporation is not particularly compatible with the polity of the Roman Catholic Church. However, the corporation sole is often compatible, and well-suited to the polity of the Roman Catholic Church. The corporation sole, however, may not be at all compatible with the typical Protestant Church (in fact, in most cases it probably isn't).
Corporation sole salesmen are recommending the corporation sole not only for churches and ministries, they're also recommending them for families, businesses and just about everything imaginable. The claims being made about the corporation sole are impressive, such as tax immunity and asset protection. But is it all true?
The theory goes that since the corporation sole is often used for "religious" and "ecclesiastical" purposes, anyone can form a corporation sole and, thereby, claim they don't have to pay income taxes, even if a corporation sole never obtains 501c3 status. In fact, most of the corporation sole salesmen specifically tell their clients not to obtain 501c3 status, but rather claim that they are "automatically exempt" under IRC 508c1A.
It's for good reason they tell their clients not to apply for 501c3 status -- most of their clients would never qualify as a real church. 508 mandatory exception provisions in the tax code are specifically and exclusively set aside for "churches." So if you couldn't qualify under 501c3 guidelines, you don't qualify under section 508 either.
Corporation sole salemen claim that just about anything can be construed as a "church," including an individual family, the home the family lives and practices its "religion" in (and any family may even define "religion" any way they want to), the family's business can be part of their "church," etc. Since the government cannot define religion, the corporation sole salesmen's theory is that they get to define a "church" any way they please and, supposedly, the IRS can't do anything about it.
This appears to be nothing more than a rehashed version of a very old tax protest ploy that has been perpetrated for decades by other tax protesters in the name of "religion." For example, there is the old ruse of selling "ordinations" in a "church." Once "ordained" you supposed can claim that your personal residence can be used as a church building and, thereby, avoid payment of property taxes. They may also claim that their "ordained ministers" personal income isn't taxable because they have taken an vow of poverty, etc. There are, allegedly, all kinds of wonderful tax advantages available in the name of "religion." Not surprisingly, however, such novel tax planning strategies have not favored at all well in the courts.
The corporation sole salesmen are now using many of the same old "religion" theories that have failed so miserably before. Just because a tax protest theory is dressed up in the name of "religion" doesn't make it any less offensive to the courts. Indeed, it may prove to be even more offensive.
Below, you'll find some links to some very interesting information and important articles on the corporation sole that you probably won't find elsewhere. You'll certainly never find these links on the web site of any corporation sole salesman. As the old adage goes, "The wise man always gets boths sides of the story."
Archbishop sworn in to office of corporation sole by three civil court judges
California Supreme Court declares the corporation sole to be "a creature grounded in civil law"
IRS and DOJ keep a close eye on corporation soles
Racist, anti-government groups use corporation sole
Freedom Bound International, a corporation sole, promises freedom from taxes, but IRS disagrees
Your Sole Purpose, a corporation sole, bilks investors out of millions
Catholic Church sees the end of using the corporation sole
Massachusetts Legislature declares Archbishop of Boston a corporation sole in 1897
Corporation soles register in Nebraska as "foreign corporations"
IRS challenges transfer of property to corporation sole
Guiding Light of God Ministries, a corporation sole, files almost 2000 complaints against IRS agents
Corporation sole ignores SEC subpoena
If you run across any other information on the corporation sole that you think might be worth adding to this site, please email us at the link below with the particulars.
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