Should a Church be a 508(c)(1)(A) church?

A Publication of Churches Under Christ Ministry

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Jerald Finney
Copyright © November 30, 2017

When a church depends on a man made law, other than the First Amendment to the United States Constitution which is a statement of the Bible principle of separation of church and state, she has become a legal entity. En1. This grieves our Lord. En2.

508(c)(1)(A) refers to a law, §508(c)(1)(A) of the Internal Revenue Code (26 U.S. Code § 508(c)(1)(A). Some churches rely on this law, rather than another law, § 501(c)(3) of the Internal Revenue Code, to establish tax exempt status.

§ 508. Special rules with respect to section 501(c)(3) organizations. “(a) New organizations must notify secretary that they are applying for recognition of section 501(c)(3) status. “(c) Exceptions. “(1) Mandatory exceptions. Subsections (a) and (b) shall not apply to— “(A) churches, their integrated auxiliaries, and conventions or associations of churches” (26 U.S.C. § 508). [Emphasis mine.]

By relying on §508(c)(1)(A) or 501(c)(3), a church has chosen to put herself under the authority of a law made by Congress which establishes a religion and denies the free exercise of religion. She is now either under civil government and God or under civil government only. By choosing to place herself under the rules that come with those laws, the church has become a legal entity, abandoned her non-taxable status as a First Amendment church, and put herself under the Fourteenth Amendment. She has agreed that, should the party she has contracted with, the IRS, a civil government agency, charge that she has violated the rules that come with 501c3 and 508, her only recourse is to comply with the order or go to her chosen authority, federal court, to contest the government order. You see, she now is a legal entity, and all disagreements between the parties to the agreement, the church and the government, must be decided by her authority, the courts of the civil government. A church who places an authority other than the Lord Jesus Christ over her has grieved our Lord by violating New Testament commandment to churches.

Permit me to explain:

  1. The First Amendment is a statement of the biblical principle of separation of church and state . When a church relies on the First Amendment, they are relying on a biblical principle. Should the biblical principle be abused or ignored by the civil government, so be it—a church should then rely and act only on the biblical principle. See En3 for links to resources which explain the First Amendment.
  2. To rely on §508(c)(1)(A) (or 501c3, of course) contradicts the First Amendment. The First Amendment religion clause 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.”

    Obviously, §508(c)(1)(A) is a law made by Congress which regards an establishment of religion; §508(c)(1)(A) also prevents the free exercise of religion because a church which claims §508(c)(1)(A) status thereby submits themselves to some control by the federal government in that the church becomes subject to the rules that come with IRC 501(c)(3) status. §508(c)(1)(A) does not state that the First Amendment forbids Congress from making any law in violation of the First Amendment; and that, therefore, a church is non-taxable. §508(c)(1)(A) is a law made by Congress which states that Congress, by law, is declaring an exemption for churches. Thus, by a clear reading of the First Amendment, §508(c)(1)(A) is clearly contradicts the First Amendment.
  3. The correct position which is held by the Internal Revenue Service (“IRS”) is that a 508 church has submitted herself to the same rules that come with 501(c)(3) regulation and given up her First Amendment status. The IRS makes this position clear.
  4. A New Testament church (a church organized according to the principles of the New Testament), among other things, receives no income, has no employees or staff, and runs no businesses (daycare, “Christian” schools, “Bible” colleges, seminaries, cafes, etc.). Church members of a New Testament Church give their tithes and offerings to God, not to a religious organization, for use in ways consistent with New Testament teaching. All monies given to God are disbursed in accordance to the guidelines of the New Testament, and no money is left over. Let us use our common sense, if not our biblical sense: Even a business which makes no profit pays no taxes. A church which has no income cannot be taxed.

In conclusion, if a church does not apply for 501(c)(3) tax exempt status or claim §508(c)(1)(A) tax exempt status, and if she is organized as a New Testament church, the First Amendment  requires the federal and state government to recognize the non-taxable status of that church. No matter what the civil government claims, that church cannot be taxed anyway because she has no income; she gives her tithes, offerings, and gifts to God, not to a government created religious organization. See En4 for resources which more thoroughly explain church 501(c)(3) and 508 status.

For a more thorough explanation see Church Internal Revenue Code § 508(c)(1)(A) Tax Exempt Status.

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.)


En1  Is a church a spiritual or legal entity? gives a short explanation. For a more thorough analysis see Separation of Church and State: God’s Churches – Spiritual or Legal Entities? Links to online edition as well as PDF of 2nd edition.

En2 Does God Care if our Church is Incorporated?

En3 Is Separation of Church and State Found in the Constitution? is a short article which explains the First Amendment. Within that article are links to more thorough studies.

En4  Church Internal Revenue Code § 508 Tax Exempt Status; Federal government control of churches through 501(c)(3) tax exemptionThe church incorporation-501(c)(3) control schemeSeparation of Church and State: God’s Churches – Spiritual or Legal Entities? 

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