Why Churches Need Bylaws, Boards, and Written Structure
When it comes to IRS recognition, a 501(c)(3) church isn’t exempt from scrutiny just because it holds Sunday services or calls itself a ministry. Churches are automatically considered tax-exempt under 501(c)(3), but if they want official IRS determination by filing the Form 1023, they’re expected to demonstrate legitimate governance. That means more than just a pulpit and a congregation.
Whether you’re leading a small startup ministry or a long-established church, proper structure matters. Not just for compliance, but for accountability, clarity, and protection.
Most denials or delays in church exemption applications come down to weak or missing governance. In this article, we’ll walk through the structure the IRS expects—and how to make sure your church is ready.
Do Churches Need a Board of Directors? Elders are not enough?
YES. Any corporation, religious or not, applying for tax-exempt status or NOT, is expected to be governed by a board of directors. That’s every State law. While the IRS doesn’t mandate a specific number of directors, they expect the board to be active, independent, and capable of oversight and at least follow the State Statute on number of board members requirement. This magic number is minimum of 3 board members if you want to get approved.
If your Form 1023 lists one person doing everything—preaching, managing finances, signing contracts—it raises red flags. The IRS wants to see checks and balances. They want to know that decisions are made collectively, not unilaterally.
Church Hierarchy: Who Does What?
Every church is different, but a common biblical structure for a christian church includes:
- Pastors or Elders – Responsible for spiritual guidance, leadership, and teaching.
- Deacons or Ministry Leaders – Handle operational or logistical roles.
- Board of Directors or Trustees – Provide oversight, approve budgets, handle legal obligations.
You don’t have to follow this exact structure, but you do need a hierarchy that shows separation of duties and accountability. I get questions saying:
We’ve been running this church since the Nixon administration and never had any problem with not having a defined hierarchy, why now?
Yes, but you never needed it because you never applied for tax exemption. This is the distinction – if you are applying to become a 501(c)(3) church, you have to follow the rules.
What About Bylaws of the Church?
Church Bylaws are the written rules that govern your church. They lay out how decisions are made, who holds what authority, how leadership is selected, and how disputes are resolved.
Here’s what strong church bylaws should include:
- Purpose and mission
- Membership criteria
- Board composition and terms
- Voting procedures
- Financial oversight and approvals
- Pastoral roles and limitations
- Dissolution clause
That covers the administrative side, but the IRS also looks for clear religious obligations which I’ll cover next. In the mean time – think of your bylaws as a map. Without them, your church risks confusion, division, and IRS trouble. If you’re applying for exemption, the IRS wants to see your bylaws and they’re looking for substance, not fluff.
Do You Need a Written Creed or Statement of Faith?
Yes. If you claim to be a church, the IRS expects to see a consistent set of beliefs. This could be called your creed, confession, statement of faith, or summary of beliefs. It doesn’t need to be fancy, but it must reflect a distinct religious purpose.
This isn’t just a formality. The IRS uses your beliefs statement to verify that you’re operating with a clearly defined religious purpose.
For example, a basic statement like “We believe the Bible is the inspired Word of God and that salvation is through Jesus Christ alone” shows the IRS that your activities are religious in nature, not just motivational speaking or community service. This helps distinguish your church from a club or social group.
What Is a Formal Code of Doctrine and Discipline?
Your Church Bylaws also should include the Formal Code of Doctrine. This is how your church handles moral teachings and behavioral expectations. Do you have procedures for correcting misconduct? Are there standards for leaders and members? A code of doctrine and discipline reinforces your church’s religious character and shows the IRS you’re operating with integrity.
For example, your bylaws or internal policies might state that elders must uphold certain moral standards, or that members who engage in conduct contrary to the church’s teachings may face counseling, suspension, or removal. These kinds of rules show the IRS you’re not just a loose gathering – you’re a religious body with structure and accountability.
What the IRS Looks For in a Church Application and Bylaws:
When reviewing a church’s application or activities, the IRS is looking for evidence of:
- Recognized creed or faith system
- Regular religious services
- Established congregation
- Religious education (Sunday school, bible studies, etc.)
- Leadership structure
- Code of conduct or discipline
- Governance by a board
- Financial oversight
You don’t have to be a mega church or even have a building – you can preach from the mountain top – but you still need structure.
A well-governed church doesn’t just meet IRS expectations, it protects itself. Church Bylaws help avoid internal disputes, define leadership roles, and establish clear decision-making authority. When done right, they serve both the IRS and your congregation. That’s why generic bylaws don’t cut it, churches need governance language that reflects their structure and faith.
The IRS Problem with Pastor-Centric Churches
A Church pastor wearing every hat might work in practice, it might even be necessary at the beginning, but from a tax-exemption standpoint, it’s risky. The IRS wants to see that your church isn’t just one man’s personal business in disguise.
No matter how trustworthy the pastor is, governance must be shared. That includes financial decisions, property ownership, and employment matters. If the board is filled with relatives or inactive yes-men, that’s just as problematic.
The IRS looks closely at churches that resemble “pastor-owned businesses.” That includes churches where the pastor controls finances, makes all decisions, and has no real oversight.
Preparing Your Church Structure Before Applying
If you’re thinking of filing the Form 1023 for your church, fix your structure first:
- Draft solid bylaws
- Appoint independent board members
- Define leadership roles
- Write your statement of faith and doctrine
Doing this before filing helps avoid delays, IRS questions, or outright denial.
Final Thoughts
Too many churches file Form 1023 without understanding what the IRS is really looking for. Then they’re shocked when they get questions, delays, or denials.
Churches aren’t immune. Governance matters. And having it all clearly documented—not just in practice but on paper—can be the difference between approval and rejection.
Don’t guess your way through this. I’ve put together a downloadable bylaws template built specifically for churches applying for 501(c)(3) status. It covers all the key areas the IRS looks for; governance, roles, doctrine, and more. It’s available with the full exemption download package.
NOTE: If you’d like to receive the following organizing documents:- Nonprofit Articles of Incorporation,
- Nonprofit Bylaws,
- Nonprofit Conflict of Interest Policy,
- Conflict of Interest Policy Acknowledgment,
- Form 1023 Attachment with all the answers,
- Form 1023 Expedite Letter template,
- and Donor Contribution Form
in Microsoft Word Document format, please consider making a donation and you’ll get to download them immediately. Not only they're worth well over $1000 in value, they will save you weeks of copy pasting and formatting as they are ready to go templates which only need changing names and addresses.
