Does Your Ministry Need to Update the IRS in 2026?
By Analiese Rivera
Has your church or ministry been operating for more than two years? Have you recently made significant changes, such as updating your bylaws, relocating, or launching a new initiative like a daycare, bookstore, or community outreach program? These are exciting signs of growth, but they also come with a responsibility to ensure your organization complies with IRS regulations.
In this blog, we’ll explore key steps to keep your ministry’s tax-exempt status up to date, giving you peace of mind as you pursue God’s vision for 2026. Let’s dive into practical ways to stay compliant and protected!
The “3 Rs” of Ministry Compliance
At StartCHURCH, we simplify compliance with the “3 Rs”: Reclassification, Reinstatement, and Reconsideration. These terms describe the actions needed when your ministry undergoes significant changes or needs to correct its status with the IRS. Addressing these ensures your organization remains a faithful steward of God’s resources while maintaining legal protection.
Let’s break down each “R” and how it applies to your ministry.
1. Reclassification: Adapting to a New Purpose
Reclassification is needed when your ministry’s activities or purpose shift significantly from what was outlined in your original 501(c)(3) application. For example:
- A ministry initially classified as a nonprofit may start holding regular worship services, establishing a congregation, or offering programs like Bible studies or children’s ministry. This shift may qualify it to be reclassified as a church exempt from filing Form 990 annually.
- Conversely, a church might pivot to focus on broader community outreach, making it more appropriate to reclassify as a religious nonprofit.
We recently had a pastor struggling to maintain her small church due to declining membership and resources. She wanted to continue her ministry but was considering dissolving the church entirely. When asked if she’d considered reclassifying her church as a ministry, she was relieved, learning she could retain her 501(c)(3) status and ordination while aligning with her vision.
To reclassify, she needed to submit Form 8940 with a detailed description of her new activities, amended organizational documents, and the prior year’s Form 990-EZ or 990 (if applicable), along with the IRS filing fee. This simple step preserved her ministry’s legacy and opened new doors for impact.
If your ministry’s purpose or activities have evolved, call us at 770-638-3444 to explore reclassification options!
2. Reinstatement: Restoring Your Tax-Exempt Status
Losing your 501(c)(3) status can feel overwhelming. The most common reason for revocation is failing to file Form 990 for three consecutive years (required for nonprofits but not churches). Under the Pension Protection Act of 2006, section 6033(j)(1) triggers automatic revocation, but section 6033(j)(2) allows organizations to apply for reinstatement.
To reinstate, you’ll need to submit a new Form 1023 application with the appropriate fee, along with:
- A written explanation of why Form 990 wasn’t filed, supported by a compelling reason.
- Proof of new procedures to prevent future lapses.
- All missing Form 990s for the unfiled years.
- A signed declaration verifying the accuracy of your submission.
Unsure of your status? Check IRS Publication 78 or call us at 770-638-3444; we’ll verify your standing and guide you through reinstatement if needed.
3. Reconsideration: Updating Your IRS Records
Reconsideration refers to updating the IRS when your ministry makes significant changes to its structure, activities, or funding. IRS Publication 557 recommends notifying the IRS of such changes to keep your 501(c)(3) status. These changes might include:
- Amending your articles of incorporation (e.g., updating the purpose or dissolution clause).
- Revising your bylaws to reflect new governance practices.
- Changing your organization’s name or voting membership structure.
The good news? Unlike your initial 501(c)(3) application, a reconsideration submission typically doesn’t require a filing fee.
A pastor was leading a century-old church inherited from his family. When asked, “When did you last update your bylaws?” he admitted they hadn’t been touched in decades. Outdated bylaws can leave a ministry vulnerable to legal challenges, as they may not reflect current laws or protect your mission.
If you’re unsure whether your bylaws are up to date, ask yourself: Do they include language to protect your mission and align with today’s current regulations? If not, we can help!
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Changing Your Name or Address?
Significant changes require IRS and state notification, like updating your ministry’s name or moving to a new state. If you relocate within the same state, submit Form 8822-B to update your mailing address. If you move to another state, Revenue Procedure 2018-15 may allow you to retain your existing 501(c)(3) status without filing a new application, depending on your circumstances. For most organizations, these changes can be reflected in your State Annual Report, but be sure to check your Secretary of State’s website for more information.
Simplify Compliance with StartCHURCH
Navigating IRS and state requirements can feel complex, but at StartCHURCH we’re committed to providing practical, faith-centered solutions. Whether you need to reclassify, reinstate, or update your records, our team is here to guide you every step of the way. Protect your ministry and pursue God’s vision with confidence in 2026!
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