Copyright © December 15, 2012
Note. This is a modified version of Chapter 2 of Separation of Church and State: God’s Churches: Spiritual or Legal Entities.
A church can choose to be either a spiritual entity, an earthly entity, or a blend of those two entities. A New Testament church is a spiritual house only, not an earthly house or an earthly and spiritual house (See, e.g., I Co. 6.15-20; II Co. 6.16-18; Ep. 2.19-22; He. 3.6, 9.1-2, 11; I Pe. 2.4-6; God Betrayed: Separation of Church and State/The Biblical Principles and the American Application, Section II, Chapters 1-3, Section III, Chapter 4). For a church to be a spiritual entity only and a New Testament church, the Lord Jesus Christ can be her only head (Ibid.). Many churches in America have been organized as spiritual entities only, some for decades. The church the author is a member of, Old Paths Baptist Church in Northfield Minnesota, is organized in that manner (You may listen to some preaching and other teachings on these matters by Old Paths’s pastor by clicking the following link: Sermons by Pastor Jason Cooley)
Doing one thing that combines church and state creates a legal entity. “Legal entity” means:
“Legal existence. An entity, other than a natural person, who has sufficient existence in legal contemplation that it can function legally, be sued or sue and make decisions through agents as in the case of corporations” (BLACK’S LAW DICTIONARY 893-894 (6th ed. 1990), definition of “legal entity.”).
A legal entity is an earthly entity, designed and created by man and run according to man made rules and procedures. Incorporating makes a church a legal entity as does obtaining 26 United States Code (Internal Revenue Code (“IRC”)) § 501(c)(3) (“501(c)(3)”) status. A legal entity is an earthly, not a spiritual, entity (See God Betrayed, esp. Section II, Chapters 2 and 3, and Section III, Chapter 4 for a thorough discussion of spiritual entity and legal entity. Click for PDF of God Betrayed; Click here for online version: Online version of God Betrayed.). A church which is a spiritual entity cannot sue or be sued because she is under the Lord Jesus Christ only and she has no legal existence and therefore no ties to the state. In modern day America, a church who becomes a legal entity is given absolutely no control over the state, but the state is given a good deal of control over that church.
A church can become a legal entity in ways other than incorporation (Includes corporation sole: See “Critique of ‘Church Freedom and the Corporation Sole’ Website”). For example, a church can become a legal entity by becoming a charitable trust, or unincorporated association, applying for an Employee or Taxpayer Identification number, opening up a bank account, entering into a contract, etc. (See Chapter 6 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities. As will be explained, a pastor/trustee of an ordinary trust can open a bank account, etc.).
A church becomes a legal entity by holding property through incorporation or some other means. Although there is no precedent in Scripture for a New Testament church to own or hold property since such a church is a spiritual entity only, a New Testament church obviously must occupy real property to exist. “Real property” means: “Land, and generally whatever is erected or growing upon or affixed to land” (BLACK’S LAW DICTIONARY 1219, definition of “Real property.”). Hereinafter, the author, unless otherwise indicated, will use the term “property” in referring to “real property.” By holding property in any manner, a church becomes a legal entity.
In America, a New Testament church may occupy property in a manner consistent with biblical principle in at least three ways. A church may use both real and personal property held by a pastor/trustee, under a Declaration of Trust, for the benefit of the Lord Jesus Christ (See Spurious rationale for church incorporation: to hold property for an explanation). Second, a church may use and occupy property if the owner gives the church permission to do so. Or third, a pastor/trustee, under a Declaration of Trust, may lease property to be used by a church for the benefit of the Lord Jesus Christ.
A pastor/trustee may hold legal title to real and/or corporal personal property (“Any kind of property, whether real or personal, freehold or leasehold, and any interest therein, whether legal or equitable, may be impressed with an ordinary trust which is not a legal entity. While the question of what property is made subject to a trust is determined by the terms of the trust, as a general proposition a property interest must be transferable to be the subject of an express trust.” 76 AM. JUR. 2D Trusts § 247 (2007).)—which includes movable and tangible things such as furniture, merchandise, etc. (BLACK’S LAW DICTIONARY 1217, definition of “Property.”)—for the benefit of the Lord Jesus Christ through a Declaration of Trust without having created a legal entity. Such a trust relationship cannot sue or be sued. Although the pastor/trustee holds and distributes property for the benefit of the Lord Jesus Christ, the church holds or owns nothing and remains a spiritual entity. (See Ecclesiastical Law Center Exposed for an explanation of the difference between a Bible trust (a non-legal entity into which a church places tithes offerings and gifts for of the true owner of the property, Jesus Christ and which does not make a church a legal entity in that the trust is not the church and the church is not the trust.) and a business trust or charitable trust. )
As the author explains in his writings and audio teaching, a church that holds real and/or personal property through a legal entity such as a non-profit corporation has partially placed herself under the control of civil government, the sovereign of the corporate part of that church. Such a church operates with two heads. A church which obtains 501(c)(3) tax exemption has agreed to further limitations and controls by a secular head.
Civil government has no authority over New Testament churches, but it does have authority over incorporated 501(c)(3) religious organizations and other types of legal entities. Although the IRS recognizes that there is a distinction between churches and other types of religious organizations, a Moslem mosque, a Hindu temple, any type religious organization that meets the test laid down by the Internal Revenue Service (“IRS”) is treated exactly as or better than an incorporated 501(c)(3) “church” is treated. The IRS and civil government by providing for incorporation, 501(c)(3) tax exemption and other types of devises have become involved with the exercise of religion; and, therefore, there is no “free exercise of religion” for churches which have been seduced by these government creations.
Through offering incorporation and later the 501(c)(3) tax exemption to churches, almost all of the states and the federal government opened the door; and most churches promptly entered and became incorporated 501(c)(3) religious organizations. Incorporation of churches was offered by states and did not violate the First Amendment because originally the First Amendment applied only to the federal government. However, the federal government was given some authority over the contracts created by incorporation because of the contract clause of Article I, Section 10 of the United States Constitution (See, e.g., Mark Douglas McGarvie One Nation Under Law: America’s Early National Struggles to Separate Church and State (DeKalb, Illinois: Northern Illinois University Press, 2005).). Churches sought incorporation partly to gain federal government protection of the contract with the state. The 501(c)(3) tax exemption ties churches to the federal government. State and federal governments have successfully tempted most churches to entangle themselves with civil government, thereby removing themselves partially or totally from under the Headship of Christ and placing themselves under the jurisdiction of the state of incorporation and the federal government.
Since the ratification of the First Amendment, the federal government has never forced a church to incorporate or get 501(c)(3) status. The Supreme Court still understands that the state cannot legally interfere with a church that does not willingly submit itself to the state.
The constitution of every state also provides for religious freedom and soul liberty. Yes, a church can also incorporate under state law, should she desire to do so. However, she is not required to do so. Should she choose to please God, not to incorporate, her choice, and the soul liberty of her members, are protected by the highest state law; and, since the First Amendment religion clause has been made applicable to the states, by America’s highest law.
In effect – as proved (1) by American law, (2) in the author’s writings and teachings, (3) and by many churches operating as spiritual entities only – churches in America may operate as spiritual entities only. Church incorporation-501(c)(3) tax exemption is nothing more than a scheme designed to educate and control churches. The plan has worked as to the great majority of churches. The state knows that it cannot control and educate a New Testament church. Civil government cannot tell a New Testament church what to believe, say, or do. The state has no control over such a church.