The recent litigation involving Church plans, and their funding (or lack thereof) of their defined benefit plans really is only a dispute over the narrow issue of whether an affiliate of a church can sponsor a “church plan”-or whether the “church”, must itself sponsor that plan. Central to it all is that the cases ask whether a hospital associated with a church can sponsor a church plan- but no one ever defines what a church is.
And that is a problem in the Code and ERISA: we may know what is a “Qualified Church Controlled Organization” (which we loving refer to as QCCOs), and even (or maybe even not) what is a “Non-Qualified Church Controlled Organization (or Non-QCCO), but nothing ever defines just what qualifies as a “church.” In the 403(b) world, we often refer to them as “steeple churches,” but that seems just to beg the question as well. I do struggle when I try to define a church to anyone who may ask.
This, unfortunately, allows one to compare the definition of a church to the U.S. Supreme Court’s Justice Potter Stewart’s famous description of pornography: “I know it when I see it.”
This can actually be a problem, especially depending in how the Supreme Court finally decides the recent spate of cases.
All is not completely lost, however. The IRS has made a game try at defining it, informally (though not through regulation, God Forbid!), in its Publication 1828. If you are dealing with Churches, by the way, this is a handy publication to keep around.
So here’s characteristics the IRS says that “churches” commonly have:
- distinct legal existence;
- recognized creed and form of worship;
- definite and distinct ecclesiastical government;
- formal code of doctrine and discipline;
- distinct religious history;
- membership not associated with any other church or denomination;
- organization of ordained ministers;
- ordained ministers selected after completing prescribed courses of study;
- literature of its own;
- established places of worship;
- regular congregations;
- regular religious services;
- Sunday schools for the religious instruction of the young; and
- schools for the preparation of its ministers.
Note that the IRS uses all the facts and circumstances, inlcuding the above, in making a determination. IRS disclaims any attempt to evaluate the content of whatever doctrine a particular organization claims is religious, “provided the particular beliefs of the organization are truly and sincerely held by those professing them and the practices and rites associated with the organization’s belief or creed are not illegal or contrary to clearly defined public policy.”
I guess. I know it when I see it……