Answer to question regarding a lawyers false statements concerning church corporate 501(c)(3) status

Jerald Finney, September 22, 2018

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Question

From: … .com>
To: Jerald Finney <jerald.finney@sbcglobal.net>
Sent: Saturday, September 22, 2018 7:41 PM
Subject: Re: Law Professors Explain THE INTERNAL REVENUE CODE § 501(C)(3) EXEMPTION-DEFINITION-CONTROL SCHEME

Amen brother, nice meeting you folks also.  I enjoyed hearing what you had to say.  I have always been against registering anything with the government concerning the church and ministry.

Just curious.  I posted a question about to incorporate or not to on a preacher forum that I belong to and one of the guys is one of those Christian lawyers a Jim Robideau, and this was his response.  Just curious what you think about his comments.

“We don’t take a position on incorporation one way or another; we explain the pros and cons under the applicable state law and love you whichever decision you make.

A couple of things. Some states have addressed issues faced by unincorporated churches by adopting some version of the Uniform Unincorporated Non Profit Association Act (UUNPAA). (Ohio and Pennsylvania have versions of this law.) This gives unincorporated churches many of the benefits incorporated churches enjoy, such as limited liability. It does not make it easier to borrow money in the unincorporated church’s name, nor does it force banks NOT to seek the personal guarantee of church debts by those who sign loan papers on behalf of the unincorporated church.

Not incorporating will not prevent the IRS from auditing or local authorities from enforcing laws against the unincorporated church. Incorporated and unincorporated churches are treated by the government in exactly the same way. The act of incorporation does mean the church will file paperwork with the state Secretary of State. An incorporated church, when filing incorporation papers, must name an agent who can receive court paperwork on behalf of the church. If they desire to conduct certain transactions, like borrow money, lending agencies will want to see an incorporated church’s Statement of Good Standing (sometimes called Statement of Continuing Existence) to show the lender that the incorporated church’s paperwork is on file with the Secretary of State. Incorporated churches may also have to file a five year report (the time period varies from state to state) verifying or updating the corporate officers on file.

Last, incorporation is done at the state level. It has nothing to do with the IRS or tax exempt status. There is no dark connection between the two that prevents you from exercising your religious freedom and building a church. We have seen good churches organized both ways.”  -Jim

Thanks!
Bro. ________________


September 22, 2018 Answer:

Dear Brother ________________,

Thanks for taking a stand for our Lord’s churches. To summarize, Mr. Jim Robideau knows not of what he speaks, either legally or biblically. I will elaborate a little on that with links to further resources to which you can refer believers who love the Lord, His churches, and His truth.

In his closing statement, Mr. Robideau reveals how totally bankrupt his reasoning is. He states, “Last, incorporation is done at the state level. It has nothing to do with the IRS or tax exempt status. There is no dark connection between the two that prevents you from exercising your religious freedom and building a church. We have seen good churches organized both ways.” That statement demonstrates his total lack of knowledge, understanding, and wisdom. Of course, believers know that even Satan includes some truth in his lies. Yes, incorporation is under state law and 501(c)(3) tax exempt status is under federal law. However,  church corporate and 501(c)(3) status are both anti-biblical and place heads other than the Lord Jesus Christ over a church. A corporate 501(c)(3) church has given up her religious freedom protected by the First Amendment and corresponding state constitutional provision. A church of Christ is built by Christ under His authority and according to His New Testament church doctrine. A corporate and/or 501(c)(3) church is partly or wholly built by man and partly or wholly under man and man’s laws.

Mr. Robideau says he does not take a position on church incorporation one way or the other. Then he states his position on church incorporation. He states that all churches are in the same boat no matter how they organize—absolutely false if they do not submit themselves to civil law by becoming a legal entity. His reasoning is that of a lawyer who either makes money getting churches into the legal system, has been brainwashed by the legal system, or both.

He understands neither the relevant Bible principles nor the law. His authority is his misunderstanding of the law. He appears to be what the world would call a postmodernist; that is, he attempts to create a reality with his rhetoric which is not based upon knowledge, understanding, and wisdom. Postmodernism is convincing only to the uninformed who lack knowledge, understanding, and wisdom. He misrepresents the law and never mentions one Bible verse or principle. Of course, he has a little truth in what he says: that incorporation is at the state level and 501(c)(3) is under federal law, 26 United States Code Section 501(c)(3). That is a simple truth. Too bad that he is not truthful about the other more important things he says.

He says that in America, incorporated and unincorporated churches are treated the same way. A total lie whether he realizes it or not—that is if a church has not made herself a legal entity in a way other than incorporation. Another way a church can become a legal entity is by becoming an Unincorporated Non Profit Association; and there are other ways as well that a church can become a legal entity as opposed to a spiritual entity under Christ only. Any church who chooses to become, or who through ignorance becomes, a legal entity has submitted herself for many matters to an authority or authorities other than the Lord Jesus Christ.

A church in America can keep herself out of the legal system without persecution and under the protections of the First Amendment to the United States Constitution and corresponding state constitutional provisions. If a church is not a legal entity, if she is a First Amendment church, she cannot sue, be sued, be charged with a crime, or act legally in any way. As you know, the church we met at in Albuquerque was organized as a non-legal entity under Jesus Christ, as is the church I am a member of, and scores of other churches in America which I am personally aware of. At the meeting we just attended we heard the story of a pastor who verified this. The state tried to assert jurisdiction over the Lord’s church he was a member of. The judge threw the case out because the pastor pointed out to the judge that the state had no jurisdiction and the opposing attorney could find no way to establish jurisdiction because the church was not a legal entity such as an incorporated 501(c)(3) organization. The judge threw the case out for want of jurisdiction.

The IRS has absolutely no authority over a church which is careful not to incorporate (aggregate or sole), become a charitable or business trust, have employees, adopt a constitution, adopt by-laws, get 501(c)(3) or 508 status or become a legal entity by  acting in certain other ways. The IRS has no authority to audit a First Amendment church which is a church under God only, a non-legal entity. Corresponding state constitutional provisions protect First Amendment churches on the state level from any actions against them by the state or local governments. I would note that civil government does have jurisdiction over buildings (building codes) and can enforce those codes, but not against a First Amendment church since such a church does not own any property. There are ways that a First Amendment church can utilize property (such as a meeting house) without owning it. I discuss this in Chapter 7 the book Separation of Church and State/God’s Churches: Spiritual or Legal Entites. In that book, I also examine some of the other lies of “Christian” lawyers who promote church legal entity status such as incorporation and 501(c)(3).

I have three other books that expose some of the other false reasons given to support church incorporation, 501(c)(3) or 508, or other legal status. The following links are to the online downloadable PDFs:

The Most Important Thing: Loving God or Winning Souls

Render Unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses

God Betrayed/Separation of Church and State: The Biblical Principles and the American Application

I cannot possibly expose all this lawyer’s false reasoning in a few words, but I have online resources which do so.

For more information on books by Jerald Finney, go to (click the following)  ORDER INFORMATION, FREE PDF, AND FREE ONLINE VERSION PAGE FOR BOOKS BY JERALD FINNEY webpage.

For links to relevant essays and articles which deal with these matters, go Essays.

Suffice it to say that some speakers at the conference we just attended made very clear that a church can operate under God only in America, without persecution and with the protection of the First Amendment and corresponding state constitutional provision.

The real issue is one of authority. Is a church which has any other authority other than the Lord Jesus Christ a church of Christ? I believe you have read the article The Bible Answer to the Question, “Is an Incorporated 501(c)(3) or 508 Church a Church of Christ?” (From a talk given at the September 16-19 Liberty Baptist Church of Albuquerque, NM, Southwest Baptist Heritage Camp Meeting). That article gets to the controlling principles for a church or believer who loves the Lord.

See the following article for links to some learned answers by lawyers and legal scholars: THE INTERNAL REVENUE CODE § 501(C)(3) EXEMPTION-DEFINITION-CONTROL SCHEME.

Thanks again, dear brother,

For His Glory,
Jerald Finney
BAB (Born Again Believer), HB (Historic Baptist), BBA, JD

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