Is a church a spiritual or legal entity?

A Publication of Churches Under Christ Ministry

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 Jerald Finney
Copyright © November 27, 2017

To answer this question, one must define “legal entity” and “spiritual entity.” See What is a legal entity? for explanation of  “legal entity.” See What is a spiritual entity? for explanation of “spiritual entity.”

Ep.2.19-22God desires His churches be a spiritual entities, not spiritual and legal entities: “Church” in this essay refers to God’s churches, New Testament churches, churches under Christ and Christ alone. A church is composed of spiritual beings, born again believers.

  • 1 Peter 2:5 says, speaking to born again believers: “Ye also, as lively stones, are built up a spiritual house, an holy priesthood, to offer up spiritual sacrifices, acceptable to God by Jesus Christ.”
  • Ephesians 2.19-22: “Now therefore ye are no more strangers and foreigners, but fellowcitizens with the saints, and of the household of God; And are built upon the foundation of the apostles and prophets, Jesus Christ himself being the chief corner stone; In whom all the building fitly framed together groweth unto an holy temple in the Lord: In whom ye also are builded together for an habitation of God through the Spirit.”

Ephesians presents the local church. Chapters 1-3 are about the heavenly calling of the church and are doctrinal. Chapters 4-6 are about the earthly conduct of a church and are practical. Believers and churches sit in heavenly places in Christ Jesus as they walk on the earth where they are to do God’s work in the family, on the job, in the church, and in the world. Click here to go to more detailed studies on the doctrine of the church from Ephesians and other books in the Bible. They are to walk in the spirit (See, for example, Galatians 5).

Ep.1.19-23_1In Ephesians 1.19-23 we learn that God set Christ “at his own right hand in heavenly places.” The suffix “ly” means “like” or “from,” and when added to a noun creates an adjective. So “heavenly” means like or from heaven. “Heavenly places” therefore means places like or from heaven. When a person is born again of the spirit, he becomes a new creature and the Holy Spirit indwells that person. See, e.g., 2 Corinthians 5.17, Ephesians 2.1-6.

God has put all things under Christ’s “feet and gave him to be the head over all things to the church” (Ephesians 1:22). Colossians 1:18: “And he is the head of the body, the church: who is the beginning, the firstborn from the dead; that in all things he might have the preeminence.” His body is to walk on the earth, and be connected to Him. The body is to be connected to the Head. The New Testament makes clear that Christ desires that a church be spiritual, that all the church does be spiritual, that a church have only one head, a spiritual Head, the Lord Jesus Christ.

Again, a believer and a church are to be connected to Christ who is the head. A church is “his body, the fullness of him that filleth all in all (23).” He made believers to “sit together in Ep.1.22-23_3heavenly places in Christ Jesus” while they walk on the earth as new creatures indwelt and led by the Holy Spirit, doing His work as instructed by the Word of God.

Again, Christ desires to be the only head of His churches. Ephesians 1:22 “And hath put all things under his feet, and gave him to be the head over all things to the church.” Colossians 1:18 “And he is the head of the body, the church: who is the beginning, the firstborn from the dead; that in all things he might have the preeminence.”

The Bible has much more to say, but that is enough to establish Bible precept, which describes the church as a spiritual entity or body built by the Lord Jesus Christ, over whom Christ is to be the Head in all things. See, for example, Ephesians 4 and 1 Corinthians 12 for more on the spiritual and eternal organism or body which is the local church.

God allows churches a choice. A church can choose to be what God wants it to be, an eternal spiritual entity under God only; or a church can choose to be a temporal earthly entity such as a 501c3 corporation under both God and man or under man only.

Spiritual blessings follow obedience; curses follow disobedience even though a church under God and man, or under man only, may have some temporal earthly success for a time. In fact, many churches, especially mega-churches are very successful businesses posing as “churches,” under God.

The Bible clearly teaches that the unholy always corrupts the holy when the two are combined. Corruption is inevitable when church and state are intermixed. As history shows, the official corrupted “church,” which was married to and used the state to enforce many of its unholy ways, was vile to the core. The Reformers became especially aware of the corruption within the Roman “church.” The churches which arose out of the Reformation adopted many of the heresies of the Roman spiritual harlot which they rebelled against and discarded.

To quote a great Bible teacher: “The church that sets out to spiritualize the world will soon find that the world will secularize the church. When wheat and tares compromise, it is the wheat that suffers. Light and darkness, right and wrong, good and evil, truth and error are incompatibles, and when they compromise it is the light, the right, the good, and the truth that are damaged.”[1] As Pastor Hank Thompson, has preached:

  • “Holy means set apart for God.  You cannot bring that which is holy and unholy together without making the holy things unholy. Holy things combined with unholy things do not make the unholy holy. It always makes the holy unholy. Being around someone who is sick may make a well person sick. Being around a well person won’t make a sick person well. If you are grounded and touch the ground and a power line at the same time, you are cooked. If you try to touch God and touch the world, you will be corrupted.”[2]

TaxExemptStatusCorruptsThe Holy Bible, the basic source for all truth proclaims:

  • “Be ye not unequally yoked together with unbelievers: for what fellowship hath righteousness with unrighteousness? and what communion hath light with darkness? And what concord hath Christ with Belial? or what part hath he that believeth with an infidel? And what agreement hath the temple of God with idols? for ye are the temple of the living God: as God hath said, I will dwell in them and walk in them: and I will be their God, and they shall be my people. Wherefore, come out from among them, and be ye separate, saith the Lord, and touch not the unclean thing; and I will receive you. And will be a Father unto you, and ye shall be my sons and daughters saith the Lord Almighty.” (2 Corinthians 6.14-18).
  • Luke 16:13 “No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon” (Luke 16.13.)[3]

History proves this. Union of church and state corrupted the civil government, the Roman “church,” the “clergy, and the people, except for a remnant.  It also corrupted the established Protestant churches and the nations which had established Protestant churches.

For a more thorough explanation of the doctrine of the church, see the resources in En 4.


[1] W. Graham Scroggie, born 1877, twelve times the Bible teacher at the famous Keswick, England conference, They Knew Their God, Vol. 5, 194 cited in The Berean Call, February 2006, p. 5, available at Separation is a Biblical principle that runs throughout scripture—Pastor Hank Thompson gave a tremendous sermon on “Separation” on Sunday evening, February 12, 2006.

[2] “Separation.” Sermon preached at Capitol City Baptist Church in Austin, Texas by Pastor Hank Thompson, February 12, 2006. See pp. 149-150 of God Betrayed (this is a link to the PDF).

[3] The doctrine of separation is taught extensively in the Word of God.

[4] What Is a Church and What Upholds Her Integrity? [Article], Bible Studies on the Doctrine of the Church, The Biblical Doctrine of the Church, The Biblical Doctrine of the Church

Is it illegal for a church in America not to incorporate? Does a church have to be a 501c3?

A Publication of Churches Under Christ Ministry

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Jerald Finney
Copyright © November 28, 2017

From IRS Publication 1828. However, should a church claim 508(c)(1)(A) tax exempt status by giving IRS acknowledgements for gifts, that church submits to the same rules and regulations as a 501(c)(3) church. See Church Internal Revenue Code § 508(c)(1)(A) Tax Exempt Status (042814).

It is not illegal for a church in America not to incorporate and a church does not have to be 501c3.

A church in America can choose to remain under the Lord Jesus Christ only. The First Amendment to the United States Constitution and corresponding provisions in the constitutions of all 50 states make this clear. The First Amendment is a statement of America’s highest man made law and the a 1947 U.S. Supreme court case applied the establishment clause to the states. So the states are bound, not only by their own state constitutions, but also by the First Amendment. Of course, the federal government is bound by the First Amendment and is not subject to any state constitution. Incorporation is a matter of state law. 501c3 is a matter of federal law.

The First Amendment states:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Minnesota Constitution Article I., Bill of Rights:

Preamble: We, the people of the state of Minnesota, grateful to God for our civil and religious liberty, and desiring to perpetuate its blessings and secure the same to ourselves and our posterity, do ordain and establish this Constitution.

Sec. 16. Freedom of conscience; no preference to be given to any religious establishment or mode of worship. The enumeration of rights in this constitution shall not deny or impair others retained by and inherent in the people. The right of every man to worship God according to the dictates of his own conscience shall never be infringed; nor shall any man be compelled to attend, erect or support any place of worship, or to maintain any religious or ecclesiastical ministry, against his consent; nor shall any control of or interference with the rights of conscience be permitted, or any preference be given by law to any religious establishment or mode of worship; but the liberty of conscience hereby secured shall not be so construed as to excuse acts of licentiousness or justify practices inconsistent with the peace or safety of the state, nor shall any money be drawn from the treasury for the benefit of any religious societies or religious or theological seminaries.

The constitutions of the other states have similar provisions.

Below are some quotes from court cases, from the IRS Code, and from some other legal resources. You can go directly to these cases online by clicking the links attached to this article.

Here is a quote from Everson, U.S. S.Ct. 1947:

“Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another. Neither can force or influence a person to go to or to remain away from church against his will or force him to profess a belief or disbelief in any religion. No person can be punished for entertaining or professing religious beliefs or disbeliefs, for church attendance or nonattendance. No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion. Neither a state nor the Federal Government can, openly or secretly, participate in the affairs of any religious organizations or groups, and vice versa. In the words of Jefferson, the clause against establishment of religion by law was intended to erect ‘a wall of separation between Church and State.

Now, let’s look at a case from Tennessee:

KOPSOMBUT-MYINT BUDDHIST CENTER, v. STATE BOARD OF EQUALIZATION, 728 N.W. 2d 327 (1986) Court of Appeals of Tennessee, Middle Section, at Nashville. Permission to Appeal Denied, April 6, 1987. IMPORTANT POINT: Property held in trust for a Buddhist Temple qualifies for a property tax exemption, if the property is used for religious purposes and the owner, any stockholder, officer, member or employee of such institution is not lawfully entitled to receive and pecuniary profit from the operations of that property in competition with like property owned by others which is not exempt. Property held in trust and which otherwise qualifies for the exemption is to be exempted from property tax.  Of note, for emphasis, it was obvious that corporate, 501(c)(3) status was not a prerequisite for religious property tax exemption. Also, this case deals with a “trust,” not a “business trust” “charitable trust” or some other type of trust that is a legal entity.” As to the trust relationship, the court stated:

  • “A valid trust need not be in writing. It can be created orally unless the language of the written conveyance excludes the existence of a trust. Sanderson v. Milligan,585 S.W.2d 573, 574 (Tenn. 1979); Linder v. Little,490 S.W.2d 717, 723 (Tenn. Ct. App. 1972); and Adrian v. Brown, 29 Tenn. App. 236, 243, 196 S.W.2d 118, 121 (1946). However, when a party seeks to establish an oral trust, it must do so by greater than a preponderance of the evidence. Sanderson v. Milligan, 585 S.W.2d 573, 574 (Tenn. 1979); Hunt v. Hunt, 169 Tenn. 1, 9, 80 S.W.2d 666, 669 (1935); and Browder v. Hite, 602 S.W.2d 489, 493 (Tenn. Ct. App. 1980).
  • “The existence of a trust requires proof of three elements: (1) a trustee who holds trust property and who is subject to the equitable duties to deal with it for the benefit of another, (2) a beneficiary to whom the trustee owes the equitable duties to deal with the trust property for his benefit, and (3) identifiable trust property. See G.G. Bogert & G.T. Bogert, The Law of Trusts and Trustees 1, at 6 (rev. 2d ed. 1984) and Restatement (Second) of Trusts § 2 comment h (1957). We find that the Kopsombut-Myint Buddhist Center has proved the existence of each of these elements by clear and convincing evidence.” [p. 333].

From Tennessee Application for Property Tax Exemption:

“PLEASE ANSWER ALL QUESTIONS AND SUPPLY THE REQUIRED SUPPORTING DOCUMENTATION: (1) Quitclaim or warranty deed for real property; (2) Corporate Charter & Bylaws or if unincorporated, a copy of any other document that explains the organization’s governing structure; (3) Financial information for the last fiscal year (i.e., Form 990 if required by IRS, or income/expense statement/budget); (4) Photograph of property; (5) Personal property schedule/list for personal property only applications.”

WAUSHARA COUNTY v. Sherri L. GRAF, 166 Wis.2d 442 (1992), 480 N.W.2d 16, Supreme Court of Wisconsin. Submitted on briefs October 4, 1991.Decided February 17, 1992The Supreme Court of Wisconsin reviewed the evidence and concluded that “The evidence indicates that Basic Bible was established to evade taxation. Basic Bible failed to meet its burden of proving that it is a “church” or “religious association” under [Wisconsin law]. The court held that Basic Bible was not property tax exempt.” The fact that the church held “in trust” the property for which a property tax exemption was sought was not a factor in the decision. The Court concluded that incorporation and 501(c)(3) status is not a prerequisite for church property tax exemption; and, again, made clear that the fact that the church held the property “in trust” did not disqualify the church from property tax exemption. 

Of course, I could give you many other opinions from state and federal courts that make clear that a church does not have to incorporate.

Now let’s briefly look at Internal Revenue Code Sections 501(c)(3) and 508. A church may apply for 501c3 or claim 508 tax exempt status. See Endnote for links to more resources which explain 501c3 and 508.

The IRS knows the 1st A and the above laws. They know churches do not have to incorporate or get 501c3 or 508 status. The First Amendment and corresponding state constitutional provisions alone make clear that a church does not have to incorporate or get 501c3. The courts know this. The IRS knows the law. The IRS, in Publication 1828, says:

The IRS knows that churches do not have to incorporate and that they can organize in a variety of ways. IRS Publication 1828 says on page 1:

“Churches and religious organizations may be legally organized in a variety of ways under state law, such as unincorporated associations, nonprofit corporations, corporations sole and charitable trusts.”

[Notice that these are not the only way a church can organize—OPBC uses a way that has been used by churches from time immemorial. Court cases establish that churches were using the concept of the simple trust in the 1800s. This manner of organization was the way churches organized in the New Testament.]

So why do churches get 501c3 status? IRS Publication 1828 says on page 2:

“Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because this recognition assures church leaders, members and contributors that the church is recognized as exempt and qualifies for related tax benefits.”

Also many pastors, churches, and Legal Scholars also know that churches do not have to incorporate of get 501c3 status. See relevant law review articles and cases at Law Review Articles: 501(c)(3), 1st Amendment History, etc., and Law on Church Organization (Trusts, Property tax, etc.).

Old Paths Baptist Church is not an incorporation not does it have 501c3 status. I have helped many other churches stay out of or get out of corporate 501c3 status. We are not hiding this, we are publishing it to the world. Why? Because what we are telling you is the truth and because you can please God by keeping your church connected to her God-ordained Head without persecution.

The law, the First Amendment and state constitutional provisions, the courts, the IRS all know these things. Yet, some pastors don’t know it. They say, “We must obey man’s law and get incorporated and get 501c3.” “My people are destroyed for lack of knowledge.”


Federal government control of churches through 501(c)(3) tax exemption; The church incorporation-501(c)(3) control schemeChurch Internal Revenue Code § 508 Tax Exempt Status; Internal Revenue Code Section 501(c)(3); Exemption Requirements-501(c)(3) Organizations; Internal Revenue Code Section 508

Who is the head of an incorporated church?

A Publication of Churches Under Christ Ministry

Click here to go to All Written Course Segments
Click here to go to General Questions Answered
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Jerald Finney
Copyright © November 28, 2017

There are two possibilities:

  1. The Lord and the state of incorporation are the heads of an incorporated church.
  2. The state of incorporation is the head of the incorporated church.

Permit me to explain.

Both possible scenarios occur when churches do not understand the Bible doctrine of the church to one degree or another. They do not understand God’s eternal, spiritual precepts as stated in the New Testament nor do they understand man’s temporal earthly law. Let me give a list of some things that corporate churches do not understand and do not want to understand. For a comprehensive examination, see the resource below. Among other things, they do not understand:

  1. that Christ loves the church and gave Himself for it;
  2. that he wishes to be the only builder of His churches;
  3. that He wishes to empower His churches without help from anyone to include civil government;
  4. that Christ desires to be the only Head of His churches;
  5. that He is jealous of His churches;
  6. that He desires His churches to be eternal spiritual entities only;
  7. how a church can walk on earth being connected to a heavenly Head only;
  8. that the Holy Spirit lives in believers thereby making it possible for believers and churches to walk in the spirit only (Galatians 2:20: “I am crucified with Christ: nevertheless I live, yet not I, but Christ liveth in me: and the life which I now live in the flesh I live by the faith of the Son of God, who loved me, and gave himself for me”);
  9. that man creates corporations;
  10. that God the Son and He only establishes His churches;
  11. that the only head of a New Testament church is the Lord Jesus Christ;
  12. that the sovereign of the corporation is the state;
  13. that corporations are earthly temporal organizations whereas God desires churches to be eternal spiritual bodies or organisms;
  14. that when one combines the eternal with the temporary, the eternal is polluted;
  15. that incorporation, being the product of heresy, is a big step toward apostasy;
  16. that corporation is an artificial being, invisible, intangible, and existing only in contemplation of man made law;
  17. that a corporation is an artificial person or legal entity created by or under the authority of the laws of the state;
  18. that no corporation can exist without the consent or grant of the sovereign, since the corporation is a creature of the state and derives its powers by legislative grant;
  19. that a corporate charter is a contract that requires that the controlling sovereign party, the civil government, be appealed to though government agency and the courts for resolution of conflicts;
  20. that many contractual controversies are thereby created whereby the church can sue the state, the members can sue other members, the members can sue the church and the church can sue the members;
  21. the corporate church agrees to set us extra-biblical offices (CEO, secretary, etc.) to handle many church affairs;
  22. that “… whenever there is an incorporated church, there are two entities—the one, the church as such, not owing its ecclesiastical or spiritual existence to the civil law, and the other, the legal corporation—each separate, although closely allied. The former is purely voluntary and is not a corporation or a quasi corporation;”
  23. that a corporate church, at best, is a two-headed monster, partially under the Lord Jesus Christ and partially under the civil government of incorporation.

Now, first let us consider the first scenario – that is, the Lord and the state are the heads of the church. This happens when an incorporated church complies with some of the Lord’s New Testament commandments for churches. Such a church operates in God’s permissive will, not His perfect will. They are like Israel. God established Israel to be under God only; God dealt directly with them as they pursued their earthly God-given goals, work, and religious activities.

Israel rejected the theocracy and demanded a king (1 Samuel 8). God told them He would nonetheless bless them if they would “turn not aside from following the Lord, but serve the Lord with all [their] heart …” (See 1 Samuel 12.20-22 for God’s whole admonition). But once Israel took that first step, the slide down and away from the Lord continued until Israel was completely apostate. The New Testament prophesies the same pattern of apostasy for His churches. We are witnessing it before our eyes in America.

God the Son, the Lord Jesus Christ, ordained the church and walked with the church until His ascension. When He ascended, He sent the Holy Spirit to walk in and with believers and His churches under His Headship only; their spirits from heaven (heavenly) making the places where they walk together on earth heavenly.

Sadly, most churches are completely under civil government; they are completely apostate. They are under civil government only.

If a church does not become a temporal, earthly, legal entity through incorporation or any other acts, and if that church seeks to honor God in all things, she is under God only.

The Bible Answer to the Question, “Is an Incorporated 501(c)(3) or 508 Church a Church of Christ?” (Prepared for a talk given at the September 16-19 Liberty Baptist Church of Albuquerque, NM, Southwest Baptist Heritage Camp Meeting. Click here to go to Part I of the video of that presentationClick here to go to Part II of that presentation, “Why a Church Is Not a Business.” Part II was removed from Part I. In Part II, Jerald Finney invited Evangelist and Pastor Terry Woodside to tell his story which demonstrates that a church which is a non-legal entity cannot be sued in America. Click here to go to the page which has links to all sermons and presentations at that meeting.)

Recommended for more in depth study:

Separation of Church and State: God’s Churches – Spiritual or Legal Entities? Links to online edition as well as PDF of 2nd edition.

On the apostasy of Israel and the church see essays on apostasy linked to at:
The Biblical Doctrine of the Church