Category Archives: F. God Betrayed/Union of Church and State in America

Conclusion to Separation of Church and State: God’s Churches: Spiritual or Legal Entities


Jerald Finney
Copyright © December 10, 2012


Note. This is a modified version of Chapter 9 of Separation of Church and State: God’s Churches: Spiritual or Legal Entities.


Pastors and Christians need to seriously look at the issues presented in this book. Incorporation subjects churches to an earthly head, the state, and requires churches to comply with earthly principles and procedures in many matters rather than God’s biblical principles and procedures in all matters. An incorporated church has formed, in addition to the biblical covenant or marriage between the church and the Lord Jesus Christ, earthly contracts to which the state is the sovereign party. A New Testament church is under God only.

An incorporated church is under both God and the civil government. Corporate trustees of incorporated churches conduct church matters according to contract principles; and, therefore, to one degree or another, they walk in the flesh and not in the spirit. Factually, the corporation, according to state law, owns the property utilized by the church. Incorporation also creates several contracts: between the contracting entities (the members of the incorporated church), between each contracting entity and the state (each church member and the state), between the entity thereby created and the state, and between the members inter se. In addition, the members own the corporation. The members/owners of the church, not the pastor, are the overseers, rulers, and trustees of the church, and the members/owners many times exercise their contractual powers given them by their sovereign state to control the pastor, even hiring or firing pastors at will.

Unnecessary submission by churches to IRC provisions has further entangled churches with civil government. Civil government has enticed almost all incorporated churches to become religious organizations under federal law, the IRC. The IRC presents an exemption-education-control scheme which most churches have not been able to resist. State help and state methods are designed to keep the gospel within the four walls of a building, and then to allow the civil government to enter those four walls. A corporate 501(c)(3) church grieves our Lord by placing herself under an additional head.

Churches must be careful to maintain their New Testament church status. They must also make sure that they do not inadvertently become legal entities through any means including incorporation and 501(c)(3).

Every born again believer should attempt to make sure that he and the church he attends honors the Lord Jesus in all things. God takes His relationships with His children individually and with His churches very seriously and He wants them to do likewise. Deviation from God’s principles has caused dire consequences to American individuals, families, churches, and to the nation as a whole.

Spiritual versus Legal Entities


Jerald Finney
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.

Introduction to Section VI, Chapter 1 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application


Jerald Finney
Copyright © December 10, 2012


Note. This is a modified version of Section VI, Chapter 1 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application.


Many factors have contributed to the attacks on God’s Word and the apostasy of the church—for example, the enlightenment, the industrial revolution, and Darwinism. Enlightenment thought or humanism was brought into the church as religious modernism. Humanistic principles infiltrated most churches, including fundamental Bible believing churches, which moved from acting and preaching with the goal of glorifying God to acting and preaching with the goal being the happiness of man.

Religious apostasy was followed by moral awfulness which resulted in political anarchy. First, God and His principles were attacked and religious apostasy grew. Then followed moral depravity and then the denial by civil government of God’s authority and any established order under God. As to the first stage in the downfall of America, the states of the new nation invited the churches to an ungodly relationship with civil government through incorporation. Then, in the twentieth century the legislative and executive branches of the federal government, through the Internal Revenue Code (“IRC”), extended another invitation to churches to become more entangled and controlled by government. Most churches eagerly accepted that invitation. In the midst of these unions with civil government, religious modernism and revisions and interpretations of the Word of God were infiltrating churches and Christian educational institutions to one degree or another.

Jesus Christ is the head of His church in all things. However, God will permit a church to betray Him and take herself from under Christ in one thing, some things, or all things. Placing a church under some person or power in only one thing greatly displeases the Lord because doing so violates biblical precept. God’s Word did not say, “and gave him to be the head over all things to the church except one thing” or “all things except secular or earthly matters,” or “all things except property.” God’s Word says, “all things.”

“If Christ Jesus have left such power with the civil rulers of the world, [kingdoms and counties, or] for the establishing, governing, and reforming his church, what is become of his care and love, wisdom and faithfulness, since in all ages since he left the earth, for the general [beyond all exception] he hath left her destitute of such qualified princes and governors, and in the course of his providence furnished her with such, whom he knew would be [and all men find] as fit as wolves to protect and feed his sheep and people” (Isaac Backus, A History of New England With Particular Reference to the Denomination of Christians called Baptists, Volume 1 (Eugene, Oregon: Wipf & Stock Publishers, Previously published by Backus Historical Society, 1871),  p. 158, quoting from Roger Williams and Edward Bean Underhill, The Bloudy Tenent of Persecution for Cause of Conscience Discussed and Mr. Cotton’s Letter Examined and Answered (London: Printed for the Society, by J. Haddon, Castle Street, Finsbury, 1848).)!

It is impossible for a New Testament Church to remain a New Testament church if that church chooses to do one thing which may result in legal subjection to the civil government. In other words, when a New Testament church does anything contrary to Scripture which gives even partial claim of sovereignty over that church to the state, that church has committed a wicked act which subjects her to another head, thereby greatly displeasing the Lord. That church has betrayed the Lord.

Doing one thing that subjects a church to the 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.”).

Corporations are legal entities. On the other hand, a pastor/trustee may hold legal title to real and/or corporal personal property for the benefit of the Lord Jesus Christ through a Declaration of Trust without having created a legal entity. “Any kind of property, whether real or personal, freehold or leasehold, and any interest therein, whether legal or equitable, may be impressed with a trust. 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)). Real property includes movable and tangible things such as furniture, merchandise, etc. (BLACK’S LAW DICTIONARY 1217, definition of “Property.”). Such a trust is not the church, and the church remains a purely spiritual entity. The pastor/trustee merely holds the property, as fiduciary, for the benefit of the beneficiary, the Lord Jesus Christ. In other words, such a trust is merely a way for a trustee to hold property for someone else’s benefit. It is important to understand that some types of trusts such as business trusts and charitable trusts are legal entities which differ legally from this type of pure trust. Some pseudo legal scholars who are above their heads in dealing with legal matters have referred to legal principles for those types of trusts in his analysis of this type of pure trust.

Furthermore, although there is no precedent in Scripture for a New Testament church, a strictly spiritual entity, to own property, 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” (Ibid., p. 1219, definition of “Real property.”). Hereinafter, the author will use the term “property” in referring to “real property.” In America, a New Testament church may occupy property in a manner consistent with biblical principle in at least three ways. As will be shown in Chapter 7 infra, a church may use property held by a pastor/trustee, under a Declaration of Trust, for the benefit of the Lord Jesus Christ. 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 church who holds real and/or personal property through a corporation has partially placed herself under the control of someone other than the Lord Jesus Christ. Such a church is not under Christ in “all things,” and operates with two heads. A church who further seeks tax exemption under IRC § 501(c)(3) (26 U.S.C. § 501(c)(3) (2007)) (“501(c)(3)”) has agreed to further limitations and controls by a secular head.

True born again Christians in America have been blessed beyond measure. The First Amendment provided for religious liberty. Christians in America had the opportunity to keep God’s church pure and undefiled and to perform the great commission (“Go ye into all the world, and preach the gospel to every creature” (Mk. 16.15) without persecution from state or federal governments. What did they do? First, many churches ignored the sound biblical advice of men like Isaac Backus and entered into contracts with the state; that is, they incorporated. Then, when given the opportunity starting in the twentieth century, churches further submitted themselves to another head when they sought 501(c)(3) tax exemption.

To Baptists, passing from persecution to religious liberty without persecution was like God delivering the Israelites from Egyptian bondage and entering the Promised Land. God said to the Israelites in Egypt, “And I am come down to deliver them out of the hand of the Egyptians, and to bring them up out of that land unto a good land and a large, unto a land flowing with milk and honey” (Ex. 3.8a). God did deliver them into that Promised Land. God gave them many instructions and warnings prior to their entry into that land:

“And it shall be, when the LORD thy God shall have brought thee into the land which he sware unto thy fathers, to Abraham, to Isaac, and to Jacob, to give thee great and goodly cities, which thou buildedst not, And houses full of all good things, which thou filledst not, and wells digged, which thou diggedst not, vineyards and olive trees, which thou plantedst not; when thou shalt have eaten and be full; Then beware lest thou forget the LORD, which brought thee forth out of the land of Egypt, from the house of bondage.  Thou shalt fear the LORD thy God, and serve him, and shalt swear by his name. Ye shall not go after other gods, of the gods of the people which are round about you; (For the LORD thy God is a jealous God among you) lest the anger of the LORD thy God be kindled against thee, and destroy thee from off the face of the earth. Ye shall not tempt the LORD your God, as ye tempted him in Massah. Ye shall diligently keep the commandments of the LORD your God, and his testimonies, and his statutes, which he hath commanded thee. And thou shalt do that which is right and good in the sight of the LORD: that it may be well with thee, and that thou mayest go in and possess the good land which the LORD sware unto thy fathers” (De. 6.10-18).
“When the LORD thy God shall bring thee into the land whither thou goest to possess it, and hath cast out many nations before thee, the Hittites, and the Girgashites, and the Amorites, and the Canaanites, and the Perizzites, and the Hivites, and the Jebusites, seven nations greater and mightier than thou; And when the LORD thy God shall deliver them before thee; thou shalt smite them, and utterly destroy them; thou shalt make no covenant with them, nor shew mercy unto them: Neither shalt thou make marriages with them; thy daughter thou shalt not give unto his son, nor his daughter shalt thou take unto thy son. For they will turn away thy son from following me, that they may serve other gods: so will the anger of the LORD be kindled against you, and destroy thee suddenly. But thus shall ye deal with them; ye shall destroy their altars, and break down their images, and cut down their groves, and burn their graven images with fire. For thou art an holy people unto the LORD thy God: the LORD thy God hath chosen thee to be a special people unto himself, above all people that are upon the face of the earth” (De. 7.1-6).

The children of Israel did not do as the Lord had commanded them:

“And it came to pass, when Israel was strong, that they put the Caananites to tribute, and did not utterly drive them out” (Jud. 1.28).
“They did not destroy the nations, concerning whom the LORD commanded them: But were mingled among the heathen, and learned their works. And they served their idols: which were a snare unto them. Yea, they sacrificed their sons and their daughters unto devils, And shed innocent blood, even the blood of their sons and of their daughters, whom they sacrificed unto the idols of Canaan: and the land was polluted with blood. Thus were they defiled with their own works, and went a whoring with their own inventions. Therefore was the wrath of the LORD kindled against his people, insomuch that he abhorred his own inheritance. And he gave them into the hand of the heathen; and they that hated them ruled over them” (Ps. 106.34-41).

As shown in Section IV, Americans owe their religious liberty primarily to the Baptists. But many of those same Baptists who had been persecuted for so long in the fight for religious liberty proved again that man never changes—they never saw or they ignored the fact that incorporation entangled churches with the state contrary to biblical principle. Baptists—like the Israelites who, after God brought them into the Promised Land—did not complete the job God had given them. With religious freedom and material prosperity, many Baptists stopped searching the Bible for God’s truth in all matters and betrayed Christ by using their newly acquired freedom to partially subjugate themselves to an earthly power—the state. They practiced pragmatism and introduced a little leaven into many of their churches. They decided that they would proceed according to that which “worked.” God became a means, not an end. Their goal, at least partially, in the beginning became the happiness of man and not the glory of God. They had more important work to do than worrying about contending further for the sovereignty of God over His wife, the church. To remain totally under God and thereby glorify Him would be inconvenient. To incorporate would provide certain earthly benefits and give protection under the contract clause of the United States Constitution.

The results of Israel not obeying God took hundreds of years to play out. At first, the theocracy of Israel was directly under God who ruled through judges:

“[The period of the theocracy of Israel under the judges was] a time of deep declension of the people as they turned from God, the unseen Leader, and descended to the low level of ‘In those days there was no king in Israel: every man did that which was right in his own eyes’ (compare Judges 1.1 with 20.18). This should have been an era of glowing progress, but it was a dark day of repeated failure.
“The ‘hoop’ of Israel’s history [began] with the nation serving God. Then they took certain steps downward. They did evil in the sight of the Lord and served Baalim (see Judges 2.11). They forsook the Lord and they served Baal and Ashtaroth. The anger of the Lord was hot against Israel, and He delivered them into the hands of their enemies. Israel entered a time of servitude. Soon Israel cried out to God in their sad plight and distress. They turned to God and repented. God heard their prayers and raised up judges through whom they were delivered. Then again the nation served God.
“Soon the same old story repeated itself” (J. Vernon McGee, Joshua and Judges (Pasadena, California: Thru the Bible Books, 1980), p. 112-113).

Judges 17 through 21 chronicles events in Israel which represented the state of society at that time. In Judges 17 and 18 God presents the low spiritual state in Israel due to apostasy. In Judges 19 God gives an example of the moral awfulness to which Israel had descended. In Judges 20 and 21 God records the political anarchy of Israel, the final step down by a nation.

After that, the Israelites rejected the headship of God and demanded a king like the other nations. God allowed their request. Even though the nation Israel rejected God’s perfect will, Israel, before the nation split, and Judah, after the division, were blessed by God when ruled by good kings. Israel after the division never had a good king.

As long as the population at least honored the Word of God in most respects, the consequences were not dire. Why? The Bible teaches that God permits deviation from his perfect or directive will:

“It is important to distinguish between the directive and the permissive will of God…. God will take up His people and, so far as possible, bless them, even when they are out of His best. In Israel’s choice of a king (1 Sam. 8:7-9); in the turning back from Kadesh (Deut. 1:19-22); in the sending of the spies; in the case of Balaam—illustrations of this principle are seen. It is needless to say that God’s permissive will never extend to things morally wrong. The highest blessing is ever found in obedience to His directive will” (1917 Scofield Reference Edition, n. 1 to Genesis 46.3, p. 65).

Will a believer and/or a church say to God, “Thy will be done;” or will a believer and/or a church set its goal as the happiness of man and not the glory of God? God allows men to choose. He will say to a particular person and/or church who deviates from His will, “Go ahead and do it your way.” What kind of person are you? What kind of church do you belong to?

The experience of the Israelites in rejecting God and demanding a king is very similar to a church rejecting God as her only Head and seeking incorporation and 501(c)(3) status. When Samuel was judge over Israel, the Israelites demanded a king to rule over them so that they might also, as they put it, “be like all the nations; and that our king may judge us, and go out before us, and fight our battles” (1 S. 8.19). “[T]he LORD said unto Samuel, Hearken unto the voice of the people in all that they say unto thee: for they have not rejected thee, but they have rejected me, that I should not reign over them. According to all the works which they have done since the day that I brought them up out of Egypt even unto this day, wherewith they have forsaken me, and served other gods, so do they also unto thee. Now therefore hearken unto their voice: howbeit yet protest solemnly unto them, and shew them the manner of the king that shall reign over them” (1 S. 8.7-9).

Samuel, at God’s direction, told the people the bad consequences of rejecting the theocracy and choosing to be ruled by a king (1 S. 8.10-17). “Nevertheless the people refused to obey the voice of Samuel; and they said, Nay; but we will have a king over us; That we also may be like all the nations; and that our king may judge us, and go out before us, and fight our battles” (1 S. 8.19-20). Samuel later reminded them that the Lord had always, through His appointed judges, delivered them from their oppressors when  they repented of their evil (See 1 S. 12.6-11) and of their reason for seeking a king: “And when ye saw that Nahash the king of the children of Ammon came against you, ye said unto me, Nay; but a king shall reign over us: when the LORD your God was your king” (1 S. 12.12).

Although Israel’s demanding a king was called a “great wickedness” (1 S. 12.17), which they perceived after Samuel foretold and God sent “thunder and rain” (1 S. 12.17-18) on the day of the wheat harvest, the people did not repent of that evil. The people acknowledged their wickedness and asked Samuel to pray to God “that [they] die not” (1 S. 12.19), but they did not repent. Knowing that asking for a king was a great evil, they said to Samuel, “Pray for thy servants unto the LORD thy God, that we die not: for we have added unto all our sins this evil, to ask for a king” (1 S. 12.19). They were only concerned about their own temporal selves, their own happiness, and not the glory of God. Would not God have been greatly pleased and glorified had they repented, rejected their king, and asked God to rule over them as before? Samuel replied to them:

“Fear not: ye have done all this wickedness: yet turn not aside from following the LORD, but serve the LORD with all your heart; And turn ye not aside: for then should ye go after vain things, which cannot profit nor deliver; for they are vain. For the LORD will not forsake his people for his great name’s sake: because it hath pleased the LORD to make you his people. Moreover as for me, God forbid that I should sin against the LORD in ceasing to pray for you: but I will teach you the good and the right way: Only fear the LORD, and serve him in truth with all your heart: for consider how great things he hath done for you.  But if ye shall still do wickedly, ye shall be consumed, both ye and your king” (1 S. 12.20-25).

The contrast between God as King and a man as king became readily apparent. Samuel said, “Now therefore behold the king whom ye have chosen, and whom ye have desired! and, behold, the LORD hath set a king over you” (1 S. 12.13). Saul, as king, quickly revealed the contrast. David (David, with all his faults, was called a man after God’s own heart.), and Solomon to a degree, were good kings of Israel before the division; and a few good kings (but mostly bad kings) ruled Judah, and all the kings of Israel after the division were bad. Furthermore, all the administrations under the kings, as the people had been warned (See 1 S. 8.11-18), consumed resources and the services of citizens that could have been enjoyed by the people and directed toward the glory of God. Israel separated from Judah because Rehoboam, the son of Solomon, in answer to their request to “make thou the grievous service of thy father, and his heavy yoke which he put upon us, lighter and we will serve thee” (1 K. 12.4),replied to them, “And now whereas my father did lade you with a heavy yoke, I will add to your yoke: my father hath chastised you with whips, but I will chastise you with scorpions” (1 K. 12.1). With time, the people and the kings continued to sink further into evil, the nation divided, and ultimately, after hundreds of years, the nations of Israel and Judah, as God had warned them, were taken into captivity.

Many churches in America have reached the point that Israel eventually reached after rejecting God. After Judah was taken into captivity, some were not taken into captivity, but were permitted to stay in Israel. Jeremiah warned them:

“And now therefore hear the word of the LORD, ye remnant of Judah; Thus saith the LORD of hosts, the God of Israel; If ye wholly set your faces to enter into Egypt, and go to sojourn there; Then it shall come to pass, that the sword, which ye feared, shall overtake you there in the land of Egypt, and the famine, whereof ye were afraid, shall follow close after you there in Egypt; and there ye shall die.  So shall it be with all the men that set their faces to go into Egypt to sojourn there; they shall die by the sword, by the famine, and by the pestilence: and none of them shall remain or escape from the evil that I will bring upon them” (Je. 42.15-17).

Against the warnings of God’s prophet, Jeremiah, they decided to go to Egypt (See Je. 42-44). They declared (falsely as to the blessings for worshipping the queen of heaven):

As for the word that thou hast spoken unto us in the name of the LORD, we will not hearken unto thee. But we will certainly do whatsoever thing goeth forth out of our own mouth, to burn incense unto the queen of heaven, and to pour out drink offerings unto her, as we have done, we, and our fathers, our kings, and our princes, in the cities of Judah, and in the streets of Jerusalem: for then had we plenty of victuals, and were well, and saw no evil.  But since we left off to burn incense to the queen of heaven, and to pour out drink offerings unto her, we have wanted all things, and have been consumed by the sword and by the famine. And when we burned incense to the queen of heaven, and poured out drink offerings unto her, did we make her cakes to worship her, and pour out drink offerings unto her, without our men?” (Je. 44.16-19)

Jeremiah pointed out God’s judgment of Israel for their idolatry which left Israel a land of “desolation, and an astonishment, and a curse, without an inhabitant” (Je. 44.22).

Like that remnant, some churches in America who know the truth refuse to repent of their evil. Their goal remains the happiness of man, not the glory of God. Many others simply do not know how to proceed to disentangle themselves.

The spiritual apostasy of churches in America has resulted in moral awfulness (which is obvious to any American Christian) and political anarchy. America is experiencing political anarchy because God has been discarded by the federal government. The philosophy of history exemplified by Israel in the Old Testament has played out in America. America is being judged and will be judged more severely, and the fault lies at the door of believers and churches.

As shown in Section I, Christ, the prophets and other men of God, have warned individuals, families, churches, America and every nation of the consequences of failure to submit to Him and His principles. Deviation from God’s directive will always bring bad consequences, sooner or later. To dishonor God on the highest level is soon followed by dishonor in many other ways, and God’s patience and mercy extend only so far. The overall trend after disobedience to God in Israel and in America’s churches and America today was and is always downward, away from God. This principle applies to a corporate 501(c)(3) religious organization in America. With a good pastor (in matters other than the headship issue), as with Judah when she had a good king, an incorporated 501(c)(3) religious organization may still be blessed by God, but not as she would be had she honored her marriage to the Lord Jesus Christ. Even with a good pastor, such an organization does not enjoy the full power of God, since, by her own choice, part of her power and blessings come from the state. Most likely such a church will begin to compromise the Word of God and the principles of God. Sooner or later that church will have a pastor who is not good. As more people are attracted by liberal churches, the number of Bible believing individuals and churches diminishes. The remnant grows smaller by the day. This is demonstrated by the growth of liberal “Bible believing churches,” and the churches of the Faith Movement, the Church Growth Movement, and the Emerging Church Movement as shown in Section II. Many of the churches in those movements are either incorporated 501(c)(3) religious organizations with God-fearing pastors (who did not understand the importance of keeping the marriage to the Lord pure and undefiled) or religious organizations started by new pastors such as Rick Warren.  This state of affairs has been reached in a relatively short time. America, as of 2007, has, since the Constitution, existed only two hundred eighteen years, not nearly as long as Israel had been in the land before the dispersion.

Originally, before and after the ratification of the United States Constitution, the only church involvement with the state was through incorporation. Any incorporation of churches at any time was and is wicked, and modern incorporation significantly subjects churches to the state. Churches rationalized that to incorporate was the pragmatic thing to do. By incorporating, they received protection from the state. They could contract—for example, they could contract with their pastors for his salary. Churches could hold property and receive bequests. As pointed out in “Recent Accelerated Apostasy in America” and other articles on this website, their goal was the happiness of man, not the glory of God. God became a means to an end, not the end. Churches reasoned, without examining Scripture, that doing certain things “worked” and therefore that doing those things was good or even of God.

In the twentieth century incorporated churches further freely submitted to civil government in both earthly and spiritual matters. The federal government took advantage of the new status of churches in order to control, educate, and define them. 26 United States Code (“U.S.C.”)(IRC) § 501(c)(3), an unconstitutional law which violates the First Amendment religion clause when applied to churches, has lured churches into entanglement with the federal government. As did the Israelites, God’s people in America turned from serving Him fully and entered into unholy alliances with the state and federal governments. Although churches may claim that incorporation only subjects a church to civil government in earthly matters, it is obvious that corporate 501(c)(3) churches submit to the civil government in some spiritual matters. Not only that, churches and church members become entangled in satanic rules and procedures that, if honored (and they should be honored by such an incorporated church since God’s people should always strive to keep their agreements, even anti-biblical contracts they willingly enter into), consume tremendous physical and material resources. The modern American incorporated 501(c)(3) religious organization many times contends with their new sovereign over what she may say and do. (See “1,000 Pastors who pledge to defy IRS and preach on politics from pulpit ahead of election misunderstand the law and the hierarchy of lawfor more on this matter.)

By incorporating, a church creates numerous contracts—a contract between the church and the state, a contract between the members or stockholders of a corporation, and between the corporation and its members or its stockholders—which substantially affect the church and the members. Contract, as opposed to biblical covenant, is a satanic/ humanistic/enlightenment principle. A contract is “a binding agreement between two or more persons or parties; esp., one legally enforceable” (WEBSTER’S COLLEGIATE DICTIONARY 251 (10th ed. 1995), definition of “contract.”). God is not included in a civil contract, whereas biblical covenant always includes God and His principles.

Just as marriage of man and woman is a biblical covenant which includes God, the marriage of Christ and His church is a biblical covenant. The Bible compares not only Christ and His church but also Jehovah and Israel to husband and wife. “For thy maker is thine husband; the LORD of hosts is his name; and thy Redeemer the Holy one of Israel; The God of the whole earth shall he be called” (Is. 54.5).  Experience and the Word of God teach man how a husband feels when his wife is unfaithful. The Old Testament teaches that God the Father felt the same way when Israel committed spiritual whoredom. Ezekiel 16 speaks of the harlotry of Jerusalem. God said to Jerusalem: “But as a wife that committeth adultery, which taketh strangers instead of her husband! They give gifts to all whores: but thou givest thy gifts to all thy lovers, and hirest them, that they may come unto thee on every side for thy whoredom” (Eze. 16.32-33).  “Surely as a wife treacherously departeth from her husband, so have ye dealt treacherously with me, O house of Israel, saith the LORD” (Je. 3.20)  God pleaded with Israel and his people to return unto Him. “… [T]hou has played the harlot, with many lovers; yet return again to me saith the Lord…” (Je. 3.1). “Turn, O Backsliding children saith the LORD; for I am married unto you…” (Je. 3.14). God’s grief over Jerusalem was displayed by Jesus when He lamented the rebellion of Jerusalem: “O Jerusalem, Jerusalem, which killest the prophets, and stonest them that are sent unto thee; how often would I have gathered thy children together, as a hen doth gather her brood under her wings, and ye would not!” (Lu. 13.34).

God gave some object lessons as to the way He felt about Israel’s spiritual fornication. Ezekiel was made a sign to Israel: God told him not to mourn the death of his wife (Eze. 24.15-27). Likewise, God used Hosea to communicate His feelings. Hosea was told to marry a woman who, after they had children, left him and became a harlot. “For their mother hath played the harlot: she that conceived them hath done shamefully: for she said, I will go after my lovers, that give me my bread and my water, my wool and my flax, mine oil and my drink. Therefore, behold, I will hedge up thy way with thorns, and make a wall, that she shall not find her paths. And she shall follow after her lovers, but she shall not overtake them; and she shall seek them, but shall not find them: then shall she say, I will go and return to my first husband: for then was it better with me than now. For she did not know that I gave her corn, and wine, and oil, and multiplied her silver and gold, which they prepared for Baal” (Ho. 2.5-8).

Like He will restore Israel, God told Hosea to restore his wife.

The Lord Jesus, as Husband of His church, likewise grieves at the unfaithfulness of His church. Christ and His wife, the church, are one flesh. He loves the church as Himself. “Husbands, love your wives, even as Christ also loved the church, and gave himself for it; That he might sanctify and cleanse it with the washing of water by the word, That he might present it to himself a glorious church, not having spot, or wrinkle, or any such thing; but that it should be holy and without blemish. So ought men to love their wives as their own bodies. He that loveth his wife loveth himself. For no man ever yet hated his own flesh; but nourisheth and cherisheth it, even as the Lord the church” (Ep. 5.25-29).

Obviously, God, through Scripture and practical experience, has conveyed to born again believers all they need to know in order to understand Christ’s extreme love for His Church and the grief He suffers when His wife places herself, even partially, under another head.

Most churches in America, in choosing to place themselves under the state through incorporation and 501(c)(3) tax exempt status, made the same choice that the Israelites made—they chose to place themselves under someone besides God so that their new “king” may judge them, go out before them, fight their battles. They entered into an illicit relationship with the state. Good pastors who now understand church-state issues have been called to some of those churches. They are presented with a dilemma.

As could have been predicted from “rightly dividing the Word of Truth,” the civil government is doing the opposite of what the church wished (except for temporal benefits which increase the temporary “happiness of man”); and most incorporated 501(c)(3) religious organizations and members do not realize what is happening. The civil government has educated many or most “Christians” in anti-biblical principles and used the church to further its satanic purposes. In effect, many churches have become mere arms of the state. Civil government officials, who have absolutely no understanding of Romans 13 point out to miseducated or willfully ignorant church pastors and members—many of whom eagerly follow the directions of their illegitimate master—that under Romans 13 it is the duty of the church to serve the state at the whim of the state. In effect, churches have “rendered unto Caesar the things that are God’s.” Many such religious organizations use tithes and offerings, government money, money obtained from begging on street corner, and/or money from advertisements on television, radio, and elsewhere to carry on their ministries, giving donors tax-deduction acknowledgements available because of 501(c)(3) status. In other words, these incorporated 501(c)(3) religious organizations depend upon the power, authority, reasoning, and techniques of civil government to achieve their goals. Can you imagine our Lord, when Satan offered Him all the kingdoms of the world (See En1), if the Lord would bow down and worship him—that is, if the Lord would operate under satanic principles—accepting Satan’s offer (See Mt. 4.8-9; Lu. 4.5-7)? Instead, the Lord gave us the correct example by quoting Scripture: “Then saith Jesus unto him, Get thee hence, Satan; for it is written, Thou shalt worship the Lord thy God, and him only shalt thou serve” (Mt. 4.10; Lu. 4.8). Can you imagine the Apostle Paul, any other apostle, or persecuted Christians down through the ages when asked “by what authority do you these things,” responding, “by the authority of the state.”

“Churches” which operate even partially by authority of the state get some of their power from the state, not from God. If the power is not of God, it is of Satan. At least a portion of their power is earthly and temporary, not heavenly and eternal. They cannot say as did Peter to the man lame from birth, “Silver and gold have I none; but such as I have give I thee: In the name of Jesus Christ of Nazareth rise up and walk” (See Ac. 3.6). In fact, many churches have turned to another gospel, the social gospel, as their sole or primary offer to mankind. They give mankind temporary “help” but either leave out eternal spiritual matters or depend upon their methods, instead of those methods prescribed by God’s Word, to lead men to earthly “salvation.” They “[h]av[e] a form of godliness, but deny[] the power thereof” (See 2 Ti. 3.5). Paul told Christians to turn away from such (Ibid.).

Without God’s power spearheaded by New Testament churches, there will be no great revivals like those which occurred around the time of the adoption of the Constitution and for years thereafter. Without renewed and more active attention and awakening to the things of God, individuals, families, churches, and the nation will continue down the road to destruction.

Related to this issue of separation of church and state is the issue of the relationship of God and state. How would a nation under God operate? First, the goal of such a nation—the glory of God—would be clearly and emphatically stated in its constitution. According to its stated purpose, a nation under God would totally implement the principle of biblical covenant which includes two or more people or a nation and God in any agreement unleavened in any way by enlightenment principles such as the principle of contract or any other unbiblical principle. A nation under God would make known that all men have freedom of conscience as proscribed by the Word of God, but that the nation would proceed under the principles of the Word of God, the principles of Christianity, when addressing issues within its God-given jurisdiction in the criminal or civil law. Biblical principle would be used to determine the jurisdiction of civil government and civil government would operate only within the jurisdiction given it by God in His Word. A nation under God would recognize the sovereignty of God and would open up all civil government activities in Jesus name and only in Jesus name. A nation under God, although inherently recognizing the legitimacy of the New Testament church by recognizing the one true God and His principles, would not grant any type material benefits to false religions or to any churches. Such a nation would legitimately proclaim to its citizens and to all nations in the world that it is “one nation under God” whose goal was “the glory of God.”

After God called Israel to be a theocracy directly under Him, the Gentile nations continued under the dispensations of conscience and human government. “For when the Gentiles, which have not the law, do by nature the things contained in the law, these, having not the law, are a law unto themselves: Which shew the work of the law written in their hearts, their conscience also bearing witness, and their thoughts the mean while accusing or else excusing one another” (Ro. 2.14-15).

God still desired Gentile nations to choose to be under Him, but sadly both Israel and Gentile nations have governed for self and not God. The Word of God makes clear that Gentile nations, like Israel, are without excuse. “For the wrath of God is revealed from heaven against all ungodliness and unrighteousness of men, who hold the truth in unrighteousness; Because that which may be known of God is manifest in them; for God hath shewed it unto them.  For the invisible things of him from the creation of the world are clearly seen, being understood by the things that are made, even his eternal power and Godhead; so that they are without excuse” (Ro. 1.18-20). Romans 1.21-23 gives the seven stages of Gentile world apostasy, and Romans 1.24-32 gives the results of Gentile world apostasy.

Since America is not a nation under God, America has subverted the biblical concept of the relationship of church and state, God and state, and God and the church. Churches, even most “fundamental Bible believing churches,” have been willing, or willingly ignorant accomplices in this subversion. As will be shown, the states through incorporation and the Federal Government through the IRC have moved into the spiritual arena and invited churches to become established state religious organizations which are to a great degree controlled by the state. Most churches have eagerly accepted the invitations.

Civil government has no authority over a New Testament church, but it does have authority over incorporated 501(c)(3) religious organizations. Although the IRS recognizes that there is a distinction between churches and other types of religious organizations, a Moslem mosque, a Hindu temple, a “church” of Satan, a Wiccan “church,” Planned Parenthood, and any type religious organization that meets the test laid down by the Internal Revenue Service is treated exactly as or better than an incorporated 501(c)(3) “church” is treated. In the IRC, a 501(c)(3) church is included with a group of “religious organizations.” At the same time, the IRS and civil government have become involved with the exercise of religion, so that there is no “free exercise thereof” for the 501(c)(3) religious organization as intended by those who ratified the First Amendment. Some organizations which are not churches are classified as churches.

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. Churches sought incorporation partly to gain federal government protection of the contract with the state.  The 501(c)(3) tax exemption further tied the church to the federal government. Through those devices, 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 the First Amendment and placing themselves under the jurisdiction of the state of incorporation and the federal government.

Even though the civil government made an offer, churches did not have to accept it. Most did. 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 who does not willingly submit itself to the state. Inevitably, the population of America became more and more corrupted; and a time came when most Americans and most civil leaders were lost and without any understanding whatsoever of biblical principles and the nature of God. Furthermore, many or most church members were either lost or were spiritual babies who sought convenience rather than the truths of the Word of God concerning the issue of separation of church and state. As a result, churches have run to the civil government seeking incorporation and 501(c)(3) tax exempt status and put themselves under bondage to civil government.

In effect, as will be shown in this section, the incorporation-501(c)(3) tax exemption is nothing more than an exemption-education-control scheme. 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. A New Testament church will submit to only one Husband—the Lord Jesus Christ. She gets her spiritual orders from God’s Word, not the civil government. A New Testament church believes and acts upon God’s Words. On the other hand, an incorporated, 501(c)(3) religious organization, in addition to being involved in a wicked act against her Husband, is subject to the teaching and control of civil government.

Saved individuals and churches choose either to be free under God or to be in bondage under Satan. God wants His children and churches to be free. “Then said Jesus to those Jews which believed on him, If ye continue in my word, then are ye my disciples indeed; And ye shall know the truth, and the truth shall make you free…. If the Son therefore shall make you free, ye shall be free indeed” (Jn. 8.31-32, 36).

Anyone who is not saved is in bondage to sin and the devil. “A Christian is free from the guilt of sin, condemnation (Jn. 3.18, 5.24), the power of darkness (Col. 1.13), the sting of death (1 Co. 15.54-57), the law of sin and death (Ro. 8.1), the power of indwelling sin (Ro. 6), the curse of the law (Ga. 3.13), and pride (Ro. 3.27).” (Insights from a sermon by Dr. Roy Thompson at Capitol City Baptist Church in Austin, Texas, on April 20, 2008).

After salvation, one still has to make choices. A church who incorporates and gets 501(c)(3) status chooses to place herself partially under the civil government and loses part of her freedom.

This does not mean that members of a church are free to commit crimes. As to infractions against another or society, the Bible provides that the state is there “to punish evildoers.” Christians are told not to do evil. “If ye be reproached for the name of Christ, happy are ye; for the spirit of glory and of God resteth upon you: on their part he is evil spoken of, but on your part he is glorified. But let none of you suffer as a murderer, or as a thief, or as an evildoer, or as a busybody in other men’s matters” (1 Pe. 4.14-15).

How many times do Christians and churches allow fear to control, paralyze, and enslave them? God desires to deliver those “who through fear of death were all their lifetime subject to bondage” (See He. 2.15). “For he that is called in the Lord, being a servant, is the Lord’s freeman: likewise also he that is called, being free, is Christ’s servant.  Ye are bought with a price; be not ye the servants of men” (1 Co. 7.22-23).

Although the lost man should fear God, the Christian is not to be subject to fear, even the fear of death for practicing his faith. “And fear not them which kill the body, but are not able to kill the soul: but rather fear him which is able to destroy both soul and body in hell” (Mt. 10.28). “For God hath not given us the spirit of fear; but of power, and of love, and of a sound mind” (2 Ti. 1.7). If death is no cause for fear to the Christian, why should anything else frighten, control, paralyze, and/or enslave him against the will of God?

Since the founding of the nation, Christians in America have suffered little persecution. When persecution for the Lord’s sake comes, the true Christian should rejoice as did persecuted apostles and Christians down through the ages: “Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake.  Rejoice, and be exceeding glad: for great is your reward in heaven: for so persecuted they the prophets which were before you” (Mt. 5.11-12).

Jesus said to the church in Smyrna, the suffering persecuted church, and only one of two churches against which the Lord had nothing bad to say: “Fear none of those things which thou shalt suffer: behold, the devil shall cast some of you into prison, that ye may be tried; and ye shall have tribulation ten days: be thou faithful unto death, and I will give thee a crown of life” (Re. 2.10).Unfortunately, most church members are more American than they are Christian; submission to biblical principles only is impractical and too contrary to the American way of life. The laws passed by the civil government provide that the church who submits to state authority will be able to attract and keep members who are more concerned about their material than their spiritual well-being; who are more concerned with temporary happiness and the absence of fear than with the glory of God. Many church members, including many pastors, either due to biblical ignorance and/or motivated by fear and greed, have misinterpreted or ignored fundamental Bible principles in order to become an arm of the state. Many times good pastors led the move to combine the churches they pastored with the state because they blindly followed their Bible college or seminary education. Also, many good pastors have inherited state-entangled churches and cannot decide what to do about it.

Endnote

The 1917 Scofield Reference Edition, n. 2 to Mt. 4.8, p. 998: “The Greek word kosmos means ‘order,’ ‘arrangement,’ and so, with the Greeks, ‘beauty’; for order and arrangement in the sense of system are at the bottom of the Greek conception of beauty.

      “When used in the N.T. of humanity, the ‘world’ of men, it is organized humanity–humanity in families, tribes, nations–which is meant. The word for chaotic, unorganized humanity–the mere mass of man is thalassa, the ‘sea’ of men (e.g. Rev. 13:1). For ‘world’ (kosmos) in the bad ethical sense, ‘world system’ John 7.7, refs.

Legal Explanation of Incorporation of Churches


Jerald Finney
Born Again Attorney at Law
Copyright © December 10, 2012


Note. This is a modified version of Section VI, Chapter 2 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Applicationand Chapter 3 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities.


JamesMadisonOnC&SWhat is a corporation? Non-profit corporations, except for the non-profit part, are the same as for profit corporations.

President James Madison understood that incorporation of churches exceeds the authority of civil government and violates the First Amendment. Therefore, on February 21, 1811 he vetoed a bill entitled “An Act incorporating the Protestant Episcopal Church in the town of Alexander, in the District of Columbia,” the District of Columbia being under federal jurisdiction. He returned the bill with the following objections:

  • Because the bill exceeds the rightful authority to which governments are limited by the essential distinction between civil and religious functions, and violates in particular the article of the Constitution of the United States which declares ‘Congress shall make no law respecting a religious establishment.
  • “The bill enacts into and establishes by law sundry rules and proceedings relative purely to the organization and policy of the church incorporated, and comprehending even the election and removal of the minister of the same, so that no change could be made therein by the particular society or by the general church of which it is a member, and whose authority it recognizes.
  • “This particular church, therefore, would so far be a religious establishment by law, a legal force and sanction being given to certain articles in its constitution and administration. Nor can it be considered that the articles thus established are to be taken as the descriptive criteria only of the corporate identity of the society, inasmuch as this identity must depend on other characteristics, as the regulations established are in general unessential and alterable according to the principles and canons by which churches of the denomination govern themselves, and as the injunctions and prohibitions contained in the regulations would be enforced by the penal consequences applicable to the violation of them according to the local law…”

(Norman Cousins, In God We Trust (Kingsport, Tennessee: Kingsport Press, Inc., 1958), p. 317; also quoted in a book Edited by Lenni Brenner, Jefferson and Madison on Separation of Church and State (Fort Lee, New Jersey: Barricade Books, 2004), p. 198; read the rest of the story online at: http://www.constitution.org/jm/jm_estab.htm). Read his objections online by clicking here. For more, click here.

“Christian” churches, wiccan churches, planned parenthood, and all kinds of organizations incorporate.

A church can choose to incorporate. However, a New Testament church (a church organized according to New Testament church doctrine), a church under Christ alone, cannot also be a corporation. This is because a corporation is legal entity created, designed, and organized by statute:

  • “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. As a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence; these are such as are supposed best calculated to effect the object for which they were created. It is essentially the legal identity of a set of contractual obligations and entitlements. See Corporation: A Human Being with No Soul.
  • PlannedParenthood_2“A corporation is not a natural person but rather an artificial person, that is, a legal fiction or a creature of statute.
  • “The attributes of a corporation may include the capacity of perpetual succession, the power to sue or be sued in the corporate name, the power to acquire or transfer property and do other acts in the corporate name, the power to purchase and hold real estate, the power to have a common seal, and the power to make bylaws for internal government. The incorporator’s choice of a particular statutory framework for incorporation is not dispositive of the corporation’s nature and status; the corporation’s declared objects and purposes are determinative” (18 AM. JUR. 2D Corporations § 1 (2007)).

4The sovereign of the corporation is the state:

  • “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. The power to create corporations is one of the attributes of sovereignty. There is no inherent right to conduct business as a corporation. The right to act as a corporation does not belong to citizens by common right, but is a special privilege conferred by the sovereign power of the state or nation. Until there is a grant of that right, whether by a special charter or under a general law, there can be no corporation. Any means of incorporation that a state sees fit to adopt are appropriate.
  • “The right to conduct business as a corporation, being a privilege, may be withheld by the state, or may be made subject to appropriate terms and restrictions. Because the granting of the privilege to be a corporation and to do business in that form rests entirely in the state’s discretion, a state is justified in imposing such conditions on that privilege as it deems necessary, so long as those conditions are not imposed in a discriminatory manner.
  • “Reminder: The law of the jurisdiction in which a corporation is organized governs who may form a corporation, how it is formed, and the powers it will have after it is formed.”

18A AM. JUR. 2D Corporations § 156 (2007). [Emphasis added.]

Throughout American corporate law, the state is referred to as sovereign of the corporation. A corporation is a product of civil law:

“The right to act as a corporation is a special privilege conferred by the sovereign power, and until there is a grant of such right, whether by special charter or under general law, there can be no corporation. The existence and legal characteristics of a corporation are matters governed by state law. The commencement of corporate existence depends on the terms of the statute under which the corporation is created. As a general rule, the existence of corporations formed under general laws commences when there has been a substantial compliance with the conditions precedent prescribed by the statutes. Frequently, the filing of the articles of incorporation is specified as the act in the process of incorporation from and after which the corporation exists as a separate legal entity” (Ibid. § 74). [Emphasis added.]

“Sovereign” means: “2 a : possessed of supreme power <[sovereign]ruler> b unlimited in extent : ABSOLUTE” (BLACK’S LAW DICTIONARY 1125 (6th ed. 1990), definition of “sovereign.”).

By incorporating, a church becomes a monstrosity with two heads which are at odds with one another. The sovereign state is at least partially over an incorporated church who is an invention of civil government. No principle in the Bible supports church incorporation; instead, biblical principle is contrary to church incorporation (The subject of the biblical appropriateness of incorporation other than incorporation of churches is not addressed in this book. However, certain biblical teachings seem to indicate that the combining of power into any type of corporation is not approved by God. For example, the combining of power at the Tower of Babel resulted in a confusion of languages and a dispersion of mankind. The only combined power approved by God was that of the civil government of a nation, and God gave civil government guidelines and jurisdictional boundaries which civil government has never honored. God divided the world into many nations so that a world government would not have the combined power to totally control the world under one government which would be effectively guided by Satan with no checks to his power. God did not give civil government the authority to create corporations.). God is the only Head or Sovereign over a New Testament church.

Since the (Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 4 L.Ed. 629 (1819)(hereinafter Dartmouth College), which solidified existing principles, the basic principles regarding incorporation of churches have not changed:

  • A corporation is defined as “An artificial person or legal entity created by or under the authority of the laws of the state. An association of persons created by statute as a legal entity. The law treats the corporation itself as a person which can sue and be sued. The corporation is distinct from the individuals who comprise it (shareholders). The corporation survives the death of its investors, as the shares can be transferred. Such entity subsists as a body politic under a special denomination, which is regarded in law as having a personality and existence distinct from that of its several members, and which is, by the same authority, vested with the capacity of continuous succession, irrespective of changes in its membership, either in perpetuity or for a limited term of years, and of acting as a unit or single individual in matters relating to the common purpose of the association, within the scope of the powers and authorities conferred upon such bodies by law. Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 536, 657, 4 L.Ed. 629; U.S. v. Trinidad Coal Co., 137 U.S. 160, 11 S.Ct. 57, 34 L.Ed. 640…. See Corporation: A Human Being with No Soul.
  • “[Corporations are classified as public and private.] A public corporation is one created by the state for political purposes and to act as an agency in the administration of civil government, generally within a particular territory or subdivision of the state, and usually invested, for that purpose, with subordinate and local powers of legislation; such as a county, city, town, or school district. These are also sometimes called ‘political corporations.’ …
    “Private corporations are those founded by and composed of private individuals, for private purposes, as distinguished from governmental purposes, and having no political or governmental franchises or duties.
  • “… [T]he fact that the business or operations of a corporation may directly and very extensively affect the general public (as in the case of a railroad company or a bank or an insurance company) is no reason for calling it a public corporation. If organized by private persons for their own advantage,—or even if organized for the benefit of the public generally, as in the case of a free public hospital or other charitable institution,—it is none the less a private corporation if it does not possess governmental powers or functions. The uses may be in a sense be called ‘public,’ but the corporation is ‘private,’ as much as if the franchises were vested in a single person. Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 4 L.Ed. 629…. [Public corporations] are not voluntary associations [as private corporations are] and … there is no contractual relation between government and the individuals who compose [the public corporation as there is with the private corporation and the individuals who compose it.]” (BLACK’S LAW DICTIONARY 340 (6th ed. 1990), definition of “Corporation.”).

1Incorporation excludes God entirely as regards certain matters controlled by the contracts created by incorporation. God and His principles are not part of or included in any of those contracts. Instead of the agreements being between the covenanting entities and the covenanting entities and God, the agreements created are between the contracting entities (the members of the incorporated church), between each contracting entity and the state (each church member and the state), and between the entity thereby created and the state. Incorporation of a church and state marriage of man and woman create a contract which places an incorporated “church” or the state marriage of man and woman under the contract clause of Article I Section 10 of the United States Constitution: “The charter of a private corporation is a contract and entitled to protection under the provision of the Constitution of the United States prohibiting the several states from passing any law impairing the obligation of contract” (18 AM. JUR. 2D Corporations § 81 (2007)).  The contract clause reads in relevant part: “No State shall … pass any … Law impairing the Obligation of Contracts….”

“A corporate charter frequently is described as a contract of a threefold nature; that is, a contract between the state and the corporation, a contract between the corporation and its stockholders [or members if a private religious corporation], and a contract between the stockholders [or members] inter se. The charter also is spoken of as a contract between the state and the corporators” (Ibid.) The result of this contract is “an artificial person or legal entity created by or under the authority of the laws of the state, an association of persons created by statute as a legal entity” which can sue and be sued. God is not included in the contracts created by incorporation, nor does God desire to be included. That contract is outside His perfect will.

Other contracts are created by the bylaws of the corporation: contracts between the members or stockholders of a corporation, and contracts between the corporation and its members or its stockholders.

The multiple contracts created by the articles of incorporation and the bylaws entangle the incorporated church with earthly satanic concerns. Contract is a humanistic or enlightenment principle which has been used to attack and destroy, among other things, the God ordained institutions of marriage, family, church, and state:

“The idea of government remaining neutral over values coincided with the use of contract law as a means of restructuring society. Contract law accords the individuals to any bargain the right to assert their own goals, values, and priorities. The law enforces the bargain, not the values contained in it. Yet implicitly, contract law enforces individualism over communitarianism by its refusal to impose a communitarian ethic upon contracting parties” (Mark Douglas McGarvie, One Nation Under Law: America’s Early National Struggles to Separate Church and State (DeKalb, Illinois: Northern Illinois University Press, 2005), P. 86).

4The contract clause has been used by civil government to control and destroy the two basic institutions ordained by God—the family and the church—and the two types of marriages—the marriage of a man and a woman and the marriage of Christ and His church. The contract clause applies satanic principles in dealing with those two institutions and those two marriages. How? To answer succinctly, contract law leaves God and His principles out of the equation. Under contract law, two or more equal persons, alone and without God and His principles, supposedly, but not actually, form a contract of marriage as opposed to a biblical covenant in which God is an active party. Under contract law, a marriage is an agreement between two equal people with equal voices. Violation of the contract allows one or both parties to petition the sovereign for a divorce. Today, no violation of terms is needed—the state has provided for “no-fault” divorce. Thus, a spouse can petition the state for a divorce for no reason at all.

Under contract law, the family is treated as a democracy in which all members of a family, including the children, are to be equal with equal rights and equal voices. Innumerable numbers of good parents get caught up in state programs which teach “child abuse prevention.” These programs mix some truth with a lot of error. The overall effect is satanic. For example, “[in] 1987 in Texas, DHS [Department of Human Services] investigated 63,204 reports of suspected child abuse and neglect. Investigators confirmed physical abuse of 14,177 children”  (“Child Abuse Prevention Program” Manual, p. 6, used by the Austin Stress Clinic, Austin, Texas, in the mid-1990s).  The author handled two cases in the mid-1990s in which two Christian mothers were not only forced to take part in state indoctrination programs, but also were charged with criminal injury to a child, a third degree felony, for spanking their children with a switch on the behind. Both cases were successfully resolved, by the grace of God, without the children being taken, but both parents suffered extreme stress at the prospect of possibly losing their children. One case went to criminal trial. God gave the victory. The jury found the accused “not guilty,” but the injustice of her having to go through such an ordeal was tragic.  In neither of those cases did any abuse occur when judged from a biblical perspective. Yet those mothers were forced by the state to go through satanic counseling. Of the approximately 50,000 investigations that resulted in no confirmation of physical abuse in 1987 in Texas, one may safely assume that almost all or all of those parents had to take counseling ordered by the state.

Those forced to take such counseling are taught, among other things:

  • “In order to deal more effectively with the stresses in your life, you will need to have a plan for replacing physical discipline with more positive behaviors…. It hurts to get hit. When someone hits you, you learn that it is OK to hurt other people…. Children who are physically disciplined are more aggressive than other children. Violent criminals in prison have a much higher incidence of physical abuse and cruel punishment as children by their parents than the population in general…. When children see violence, they believe that violence is a way to resolve differences/problems…. CAPP staff believes that any form of violence and especially physical discipline have no place in raising children. They must be eliminated from your life. This may mean a drastic change in the way you think and how you discipline your kids…. Hitting children and causing them pain teaches children to be afraid of parents rather than to respect them…. Spanking may stop misbehavior for a while, but in time it loses its effect as a way to control behavior. Spanking may relieve a parent’s anger, but most parents feel guilty afterward. Some children learn to use that guilt to get all sorts of privileges after a spanking. As you can see, there are many reasons to stop abuse and physical discipline” (Ibid., pp. 3, 6, 8).
  • “Times have definitely changed since we were growing up as children. Most of us accepted our parents’ rules and orders without question. We just did what they told us to do. If we didn’t, we could probably expect a spanking. Why are things different now? Why do our kids challenge us with ‘NO’ and ‘WHY’ so effectively? And why can’t our response simply be ‘because I said so’ or a spanking?
  • “We may need to look at how society has changed since we’ve grown up to get some answers to our questions.
  • “When most of us were growing up, society had an order to how it operated. The president ruled the country, men were the heads of the households, whites and people of color were segregated, and fathers were disciplinarians. People did not question the ‘order’ of things. If they did, they were told to stay in line….
    “While we called it a democratic society, in many ways the majority of people (people of color, women, and children) were ruled by a minority (mostly white men). This is not really a democracy.
  • “[Movements mentioned that changed things.] Children also benefited from these movements. For centuries, children had been considered the property of their parents. They were supposed to respect their elders and follow their orders without question. Parents’ wishes were enforced through physical force. Children were often hurt both physically and emotionally by this….
  • “With the empowerment of other groups came questions about the rights of children. Laws about physical discipline and abuse were made. Children were no longer considered just ‘property’ but members of a democratic family with certain rights.
  • “How does a democratic family work? First and foremost, both parents and children are considered equal. They are considered equal in terms of individual worth and dignity. Both child and parent are entitled to receive love and respect. Thus, each must treat the other with love and respect.
  • “Secondly, in a democratic family, each person has a responsibility to make decisions for him/herself (within appropriate limits) and then to be accountable for the decisions that they make….
  • “Having a democratic family means taking more time to make decisions, encouraging opinions and listening to them, showing appreciation for good things people do, showing respect for personal territory, and showing interest and support for things that are important in people’s lives. It also means sharing power. But the end result is good: people feeling better about themselves and being able to ask for what they want appropriately” (Ibid., “CAPP PHILOSOPHY ON ABUSE AND PHYSICAL DISCIPLINE,” pp. 8-9.).

Any true Christian knowledgeable in biblical principles can readily discern the satanic principles in the above excerpts. Some truth is injected in a lot of false conclusory statements. Issues having nothing to do with discipline of children and the operation of a family are misconstrued, exaggerated, and inappropriately applied. Behind all this is a total lack of understanding of the nature of man and the applicability of the principles of the Sovereign, which, when properly understood and applied, bring positive consequences. Unfortunately, the human instruments who teach these concepts have been duped by a being whose goal is being realized in America. That goal is the removal of God and His Word from society, destruction of God’s crowning creation, man, both temporally and eternally, and destruction of all of God’s institutions: marriage, family, church, and civil government.

Although God has given civil government no jurisdiction over marriage, civil government has assumed jurisdiction with the willing participation of many pastors. When a man and a woman enter a state ordained marriage, or when the members of a church incorporate the church, they enter into a contract under and with the state and come under the jurisdiction of the civil government. Early on, even the first dictionary published in America gave one definition of “CONTRACT” as “The act by which a man and woman are betrothed, each to the other” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828)). Compare that with the covenant marriage of a man and woman under God:

“And [Jesus] answered and said unto them, Have ye not read, that he which made them at the beginning made them male and female, And said, For this cause shall a man leave father and mother, and shall cleave to his wife: and they twain shall be one flesh? Wherefore they are no more twain, but one flesh. What therefore God hath joined together, let not man put asunder” (Mt. 19.4-6).

A civil contract of marriage allegedly includes only a man and a woman; but effectively, God is involved in any marriage, whether man recognizes it or not. Any marriage involves a biblical covenant which includes a man, a woman, and God. All marriages are spiritual unions under God—the problem comes when one forgets or fails to understand this.

God’s rules always apply whether civil government and/or man recognize them or not. Lies, false definitions, and satanic principles do not change truth. “O praise the LORD, all ye nations: praise him, all ye people. For his merciful kindness is great toward us: and the truth of the LORD endureth for ever. Praise ye the LORD” (Ps. 117.1-2). God joins a man and woman whether civil government recognizes this fact or not. Neither man nor civil law can destroy that spiritual union although civil law and the man and woman can ignore or be ignorant of that aspect of marriage and physically divide the union. That is, a wife and/or husband can separate and secure a divorce from civil government, but God recognizes no such divorce as destroying the spiritual union which He created. “But I [Jesus] say unto you, That whosoever shall put away his wife, saving for the cause of fornication, causeth her to commit adultery: and whosoever shall marry her that is divorced committeth adultery” (Mt. 5.32; see also, Mt. 19.9). “And he [Jesus] saith unto them, Whosoever shall put away his wife, and marry another, committeth adultery against her” (Mk. 10.11). “And if a woman shall put away her husband, and be married to another, she committeth adultery” (Mk. 10.12). “Whosoever putteth away his wife, and marrieth another, committeth adultery: and whosoever marrieth her that is put away from her husband committeth adultery” (Lu. 16.18).

9In a civil government marriage ceremony, a pastor or other state recognized official proclaims the bride and groom to be husband and wife by the authority given him by the state and maybe also by the authority of God. How could it be that God gave him authority to conduct a marriage under the authority of the state or the state and God when the principles of each are diametrically opposed? God did not tell man (civil government), “you have authority to institute marriage less than, coequal, or above my authority to join man and woman in marriage.” God told man (civil government) not to put asunder “what God [not civil government or civil government and God] hath joined together.”

In any event, the state, as well as many pastors, have ignored biblical principle and erroneously declared man and woman to be husband and wife by the authority of the state and God. If the contract of marriage is performed by a pastor who acts by the authority of both the state and God, even should the form of the ceremony and vows be somewhat in line with biblical principle, a marriage based upon a blend of Godly and satanic principles has been initiated. The pastor of that ceremony hands the authority over that marriage to the state and places the marriage and subsequent family under the satanic family law principles of the state.

The ultimate fruition of the application of contract law to marriage is being seen in today’s American society even among “Christians” in high divorce rates, high percentages of people who just “shack up,” and in the ultimate assault by Satan—the effort to redefine marriage to include the union of two of the same sex. Civil government is taking the nation toward an American Sodom and Gomorrah. This ultimate result, which is to be followed by the wrath of God, came about because men “hold the truth in unrighteousness” (Ro. 1.18) and was foretold in God’s Word:

”Because that, when they knew God, they glorified him not as God, neither were thankful; but became vain in their imaginations, and their foolish heart was darkened. Professing themselves to be wise, they became fools, And changed the glory of the uncorruptible God into an image made like to corruptible man, and to birds, and fourfooted beasts, and creeping things. Wherefore God also gave them up to uncleanness through the lusts of their own hearts, to dishonour their own bodies between themselves: Who changed the truth of God into a lie, and worshipped and served the creature more than the Creator, who is blessed for ever. Amen.  For this cause God gave them up unto vile affections: for even their women did change the natural use into that which is against nature: And likewise also the men, leaving the natural use of the woman, burned in their lust one toward another; men with men working that which is unseemly, and receiving in themselves that recompence of their error which was meet. And even as they did not like to retain God in their knowledge, God gave them over to a reprobate mind, to do those things which are not convenient;  Being filled with all unrighteousness, fornication, wickedness, covetousness, maliciousness; full of envy, murder, debate, deceit, malignity; whisperers, Backbiters, haters of God, despiteful, proud, boasters, inventors of evil things, disobedient to parents, Without understanding, covenantbreakers, without natural affection, implacable, unmerciful:  Who knowing the judgment of God, that they which commit such things are worthy of death, not only do the same, but have pleasure in them that do them” (Ro. 1.21-32).

Of course, even should civil government define marriage in such a way as to allow the union of two men or two women or any other combination except one man and one woman, such unions are not marriage. God defined marriage in His Word, and that definition cannot be nullified by human law.

Likewise, the contract clause has been used to attack the marriage of Christ and His churches. Like man and woman as husband and wife, Christ and a church, as Husband and wife, are one flesh: “For no man ever yet hated his own flesh; but nourisheth and cherisheth it, even as the Lord the church: For we are members of his body, of his flesh, and of his bone” (Ep. 5.29-30).

Many Christians, in seeking incorporation of a church, feel that by so doing the church and/or its members are gaining additional protection from lawsuits and from civil government. The corporate veil can be pierced, and individuals in a corporation can be sued. (Note: A church can renounce its New Testament church status in ways other than incorporation. For example, a church can apply for an Employee or Taxpayer Identification number, enter into a contract, etc. (See “Spurious rationale for incorporating: limited liability” which is published on this website) Furthermore, the contract of incorporation of the church with the state does not protect the church from all civil governmental interference with matters outside the contract:

“Although a corporate charter is a contract that the Constitution of the United States protects against impairment by subsequent legislation, a legislature can neither bargain away the police power nor in any way withdraw from its successors the power to take appropriate measures to guard the safety, health, and morals of all who may be within their jurisdiction. Thus, the powers or privileges of a private corporation, although not subject to direct impairment, may nevertheless be affected by the operation of certain fundamental governmental powers, such as the police power and power of eminent domain. The legislature may, without impairing the obligations of a contract, by general laws impose new burdens on corporations in addition to those imposed by their charters when such burdens are conducive to the public interest and safety, notwithstanding the power to do so may not have been reserved in the charter. Moreover, the state and those acting under its authority have the right to require a corporation to incur expenses in order properly to exercise its rights and to use its property and franchises with due regard to the public needs. Corporations are subject to legislative control equally with natural persons — that is, they may be controlled in all matters coming within the general range of legislative authority, subject to the limitation of not impairing the obligation of contracts and provided the essential franchise is not taken without compensation” (18 AM. JUR. 2D Corporations § 83 (2007)).

15The corporation is established under a charter from the civil government and conclusively established by filing articles of incorporation:

  • “A charter is an instrument or authority from the sovereign power bestowing rights or privileges; therefore, with regard to corporations, the term is correctly used in its limited sense only with reference to special incorporation by act of the legislature. The creation of a corporate entity is conclusively established by filing of articles of incorporation. Legislation confers corporate power through general or special statutes.
  • “Observation: The laws, whether constitutional or statutory, of the state where a corporation is organized, enter into, and become part of, its articles of incorporation or charter so that the charter of a corporation organized under a general law consists of its articles of incorporation and the laws applicable thereto. Only those statutes that in some way are intended to grant or restrict the powers of a corporation, however, become a part of the corporate charter” (Ibid.,§ 78).
  • “Those who seek and obtain the benefit of a charter of incorporation must take the benefit under the conditions and with the burdens prescribed by the laws, whether in the Constitution, in general laws, or in the charter itself. A corporation accepting a charter consents to be bound by all of its provisions and conditions and cannot complain of the enforcement of any of such provisions and conditions, if, by a fair reading of the language, the enforcement in the particular manner is authorized. A state granting a charter of incorporation may define strictly and limit the uses of the corporate property necessary to the exercise of the powers granted. The state, however, may not enforce any part of a charter that is repugnant to the Federal Constitution” (Ibid., § 79).
  • “Where there is a conflict between a corporate charter and the constitution and statutes under which it is issued, the charter must yield to the constitution and statutes. With respect to matters to which statutes do not apply, the articles of incorporation of a corporation are its fundamental and organic law” (Ibid., § 80).

“The articles of incorporation establish a corporation’s purposes and manner of governance” (18A AM. JUR. 2D Corporations § 171 (2007)).  “The contents of articles or certificates of incorporation are commonly specified by a state’s corporation statutes. Statutory requirements as to the form and content of the articles or certificate must be substantially followed, and the courts have not hesitated to declare an attempted incorporation invalid for failure to do so” (Ibid., § 173).

As sovereign, the state has ultimate authority in interpreting the articles of incorporation:

“Because a corporation’s charter embodies a contract between the state and the corporation, the corporation and its shareholders or members, and a contract among the shareholders or members themselves, the courts employ general principles of contract interpretation when construing articles of incorporation or a certificate of incorporation This means that courts must give effect to the intent of the parties, as evidenced by the language of the certificate and the circumstances surrounding its adoption. The question whether a corporation’s articles are ambiguous is one of law, and when determining the meaning of ambiguous provisions, a court will consider the history and surrounding circumstances to determine the parties’ intent. The articles should be construed in their entirety. If there is a hopeless ambiguity that could mislead a reasonable investor, the language of articles of incorporation will be construed in favor of the reasonable expectations of the investors and against the drafter” (Ibid., § 171).

by lawsThe corporate church must also have bylaws. “The bylaws of a corporation are a contract between the members of a corporation, and between the corporation and its members, while the articles of incorporation constitute a contract between the corporation and the state, between the corporation and its owners or members, and between the owners or members themselves” (Ibid., § 261):

  • “A bylaw is a self-imposed rule, resulting from an agreement or contract between the corporation and its members to conduct the corporate business in a particular way. The bylaws of a corporation are the private ‘statutes’ by which the corporation is regulated and functions. The charter and bylaws are the fundamental documents governing the conduct of corporate affairs; they establish norms of procedure for exercising rights, and they reflect the purposes and intentions of the incorporators.
  • “Until repealed, a bylaw is a continuing rule for the government of the corporation and its officers. Bylaws constitute a binding contract as between the corporation and its members and as between the members themselves…” (Ibid., § 258).

The conflict of these rules regarding bylaws with biblical principles is obvious to the knowledgeable Christian.

A business or other organization is “incorporated either for the benefit of the public (a public corporation) or for private purposes (a private corporation).” An incorporated “church” is a private corporation:

“A corporation is to be deemed a private corporation, though it was created for the administration of a public charity, where the endowments of the corporation have been received from individuals. A nonprofit corporation organized pursuant to a nonprofit corporation statute is a private corporation, where it is neither controlled nor owned by the state nor supported by public funds. A corporation organized by permission of the legislature, supported largely by voluntary contributions, and managed by officers and directors who are not representatives of the state or any political subdivision, is a ‘private corporation.’ … A corporation may have a double aspect according to the nature of the powers granted and exercised. If they were granted and exercised for public purposes exclusively, they belong to the corporate body in its public, political, or municipal character; however, if the grant was for purposes of private advantage and emolument, though the public may derive a common benefit therefrom, the corporation, quod hoc, is to be regarded as a private company’” (18 AM. JUR. 2D Corporations § 30).

A corporation is a State “franchise. “Franchises are rights or privileges conferred by grant of the sovereign; a corporate franchise arises from a contract between the sovereign power and private citizens or the corporation itself” (Ibid.,§ 76). [Emphasis mine.]

Two headed monsterAs can be seen, in God’s eyes the incorporated church is somewhat of a two headed monster:

  • “In determining the threshold question of the applicability of religious corporations law, a court will look to the provisions of the corporation’s certificate of incorporation as well as the actual practices of the organization as revealed in its papers.
  • “A church society, by incorporating, does not lose its existence or become wholly merged in the corporation. The religious corporation and the church, although one may exist within the pale of the other, are in no respect correlative. The objects and interests of the one are moral and spiritual; the other deals with things temporal and material. Each as a body is entirely independent and free from any direct control or interference by the other.
  • Thus, 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. On the other hand, a corporation which is formed for the acquisition and taking care of the property of the church, must be regarded as a legal personality, and is in no sense ecclesiastical in its functions” (66 AM. JUR. 2D Religious Societies § 5 (2007)). [Emphasis mine.]

Of note in the above quote is the inference that a non-incorporated, non-501(c)(3) church who has not in any way submitted to civil government or made herself a legal entity does not subject itself or owe its existence to civil law and its objects and interests are only moral and spiritual. This is in line with biblical principle that a New Testament church is spiritual only and has no temporal attachments.

An incorporated 501(c)(3) church gets part of her powers from God and part from the civil government. She is under two heads. Part of the church, as a legal entity, can sue and be sued as to both earthly and spiritual matters. Part of the church must have elected officers who conduct business meetings, meet statutory requirements, etc. “A church that sees fit to become incorporated under state law is obligated to conduct its business activities in compliance therewith, including governmental regulation of its employment relationships, so long as the employment does not depend on doctrinal matters. Religious corporations are governed by the same rules of law and equity as other corporations” (Ibid., § 4). …

  • “Statutory provisions sometimes authorize the membership of a religious society to incorporate as an ecclesiastical body with the power to make bylaws governing the selection of church officials and prescribing their duties” (Ibid., § 6). …
  • “A church incorporated for the promotion of a defined fundamental religious faith or doctrine cannot by amendment change its religious creed or faith except by the unanimous vote of its members” (Ibid., § 7).

artificial personThe incorporated church, as has been stated, is an artificial person and a separate legal entity. This has many ramifications:

  • “The corporate personality is a fiction but is intended to be acted upon as though it were a fact. A corporation is a separate legal entity, distinct from its individual members or stockholders.
  • “The basic purpose of incorporation is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, own it, or whom it employs…. See Corporation: A Human Being with No Soul.
  • “A corporate owner/employee, who is a natural person, is distinct, therefore, from the corporation itself. An employee and the corporation for which the employee works are different persons, even where the employee is the corporation’s sole owner…. The corporation also remains unchanged and unaffected in its identity by changes in its individual membership.
  • “In no legal sense can the business of a corporation be said to be that of its individual stockholders or officers” (18 AM. JUR. 2D Corporations § 44 (2007)).

14thAmendment“A corporation is a person within the meaning of the due process and equal protection clauses of the Fourteenth Amendment to the United States Constitution and similar provisions of state constitutions and within the meaning of state statutes.” (Johnson v. Goodyear, 127 Cal. 4 (1899), cited in Barbara Ketay, Church in Chains, p. 9). “However, a corporation is not considered as a person under the First Amendment to the United States Constitution (religious liberty clause) or under the Fifth Amendment to the United States Constitution” (Ketay, p. 9):

  • “[T]here is a clear distinction in this particular between an individual and a corporation, and that the latter has no right to refuse to submit its books and papers for an examination at the suit of the State. The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the State or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to criminate him. He owes no such duty to the State, since he receives nothing therefrom, beyond the protection of his life and property. His rights are such as existed by the law of the land long antecedent to the organization of the State, and can only be taken from him by due process of law, and in accordance with the Constitution. Among his rights are a refusal to incriminate himself, and the immunity of himself and his property from arrest or seizure except under a warrant of the law. He owes nothing to the public so long as he does not trespass upon their rights.
  • “Upon the other hand, the corporation is a creature of the State. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the State and the limitations of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserved right in the legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a State, having chartered a corporation to make use of certain franchises, could not in the exercise of its sovereignty inquire how these franchises had been employed, and whether they had been abused, and demand the production of the corporate books and papers for that purpose” (Hale v. Hinkle, 201 U.S. 43, 74-75; 26 S. Ct. 370; 50 L. Ed. 652; 1906 U.S. LEXIS 1815 (1906)).

When a church incorporates or becomes a legal entity, that church contracts with the state gaining certain “protections” but gives up certain constitutional rights. While a corporation must “obey the laws of its creation,” it also has constitutionally protected rights (See Ibid., pp. 74-75). Only the church who is not satisfied with the freedom and provisions afforded the church by God (which, by the way, are implemented by the First Amendment) seeks incorporation. For the incorporated church, God’s provisions are not adequate. Although perhaps the individual church member seeks incorporation for protection by civil government as opposed to protection by God, that member forgets that God is a far more strong and benevolent protector than the state. Furthermore, when a church is not a legal entity, that church cannot be sued. One can sue a legal entity such as a corporation, but how does one sue a church who is “a spiritual house made up of spiritual beings offering up spiritual sacrifices, and not a physical house made by man?” Individuals, including members of a New Testament church, can be sued for tortious actions or tried for criminal acts, but a New Testament church cannot be sued or tried for criminal acts.

The purpose of the corporation is at odds with the God-given purpose of a church. Ultimately, the purpose of a church is to glorify God by submitting herself to her Husband in all things (See Ep. 5.24). The basic purpose of incorporation is to allegedly increase the happiness of man by creating a “distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, own it, or whom it employs.” (18 AM. JUR. 2D Corporations § 44 (2007)).

A corporation and a church have different creators. Church members, under authority of and in conjunction with the state, create the corporation. God supernaturally creates a church: “And the Lord added to the church daily such as should be saved” (Ac. 2.47b).

The organization of a church and a corporation are different. The incorporated “church” has “employees.” Even should the incorporated “church” call their “employees” ministers, the state looks at them as “employees,” and the state is the sovereign of the corporation. A New Testament church cannot have employees and remain a New Testament church. Nowhere in the Bible can one conclude that a church is to pay anyone a salary. To do so makes that church a legal entity. Does God want His churches to have “members,” does He want them to have “employees,” or does He want His churches to have both members and employees?

Whereas a church is to have pastors, teachers, and so forth, state laws which create corporations require the corporation to have officers such as president, treasurer, secretary, and so forth.

4Ownership of a church and a corporation differs. “Members in a nonprofit corporation are the ‘owners’ of the corporation and generally play a role similar to shareholders in for-profit corporations” (18A AM. JUR. 2D Corporations § 609 (2007)). As has been pointed out, Jesus Christ owns a New Testament church. God ordained that the church would be His. Jesus said to Peter, “That thou art Peter, and upon this rock I will build my church; and the gates of hell shall not prevail against it” (Mt. 16.18). [Emphasis mine.] Jesus stated that He would build His church. The incorporated “church” is partly owned, authorized, and built by God and partly owned, authorized, and built by Satan.

The corporation owns the property. “The members of the corporation are not owners of the corporate property; the corporation and its members are distinct parties. The corporation has an existence distinct, separate and apart from its members” (Ketay, citing Baker Kivide Min. Cop. v. Maxfield, 83 Cal. App. 2d 241 (1948) and Eckenbrecher v. Grant, 187 Cal. 7 (1921)).

An incorporated church must deal with all the government red tape that comes with incorporation. The incorporated church must now elect officers, hold business meetings, notify members of those meetings pursuant to statutory requirements, keep records, etc. All these secular activities take tremendous time, energy, and resources which could be used in pursuing the God-given purposes of a church. The incorporated church who does not comply with statutory requirements is being dishonest and could face further problems from her sovereign state.

Notice that Jesus said that “the gates of hell shall not prevail against [my church].” What about the church who is partly under God and partly under Satan? That church has fallen for Satan’s seduction:

seduction“SEDUCTION, n. … 2. Appropriately, the act or crime of persuading a female, by flattery or deception, to surrender her chastity. A woman who is above flattery, is least liable to seduction; but the best safeguard is principle, the love and purity of holiness, the fear of God and reverence for his commandments” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828)).

An incorporated church, having compromised her love for her Husband, will continue to make incremental compromises, and ultimately (perhaps in 1, 5, 10, 50, 100, or 200 years or more) will fall into heresy and apostasy. And from the beginning of that initial compromise, the Lord, even though longsuffering in His love and mercy, is grieving because of His wife’s compromise.

A corporation cannot be the bride of Christ, the wife of Christ. The incorporated part of an incorporated church is not the bride of Christ, the wife of Christ, but rather an extramarital illicit relationship existing alongside the marriage.

With the above information it should already be completely obvious to any born again believer who loves the Lord and who has been saved any length of time at all that a church should never incorporate. Scripture contains no principle consistent with church incorporation or incorporation in general. In fact, everything about incorporation is anti-biblical. If one who loves the Lord and comes into this understanding is in a church who is already incorporated, he will do all he can to shed the corporate 501(c)(3) status of that church.

Incorporation of churches in the colonies and the new nation


Jerald Finney
Copyright © December 10, 2012


Note. This is a modified version of Section VI, Chapter 3 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application.


   “The Constitution did not separate church and state [on the state level], but it did endorse a conception of society that made separation inevitable. The protection of private rights from public action required the delineation of private and public activities. Once law separated public and private realms, churches could not [according to the way the law developed] continue their historic roles of public service. [States that relied on the political process to effectuate separation of church and state, an essentially state matter, encountered tremendous difficulty in doing so.] Politics could not determine the form that educational and welfare institutions would take in the early republic because no political consensus existed. The law could—and when state and federal courts turned to consider this issue, their decisions were informed by the same legal doctrine. Ultimately the Supreme Court did impose a model of privatization on all of the states, but its effect was more to redirect political debate than to resolve political tension” (Mark Douglas McGarvie, One Nation Under Law: America’s Early National Struggles to Separate Church and State (DeKalb, Illinois: Northern Illinois University Press, 2005), p. 13).


Incorporation of churches became an issue for the Baptists in the colonies which carried over to the states in the new nation. In the 1700s, various denominations, including Baptists, in the colony of Rhode Island “took advantage of the absence of religious establishment by incorporating to address a wide range of church goals” (Ibid., p. 98).

“Pennsylvania’s laws on religious corporations demonstrate the changing attitudes toward churches and the transformation in the tenets underlying law from the colonial era to the early republic…. In the early republic, churches were redefined, under law, as private organizations serving private and not public goals” (Ibid., pp. 98-99)  In the colonial era Pennsylvania and New York had a longer history of incorporating churches than did the other colonies. The New York legislature passed a law allowing all Protestant sects to incorporate in the 1760s. The New York Constitution of 1777 provided for “free exercise and enjoyment of religious profession and worship, without discrimination or preference” (Ibid., pp. 89, 109-110).

“[T]he developing laws of private property, enforced through contracts, were given early expression to redefine the roles of churches in American society” in a 1784 New York case involving Trinity Church who had received land in a letter from Queen Anne in 1714. The case held that “contracts made with the Crown or its agent were valid, even when made during war when the king’s authority was denied by the colonists in the midst of revolution.” “After the judicial recognition of contract rights as superior to legislative enactment, the legislature had little choice but to limit its disestablishment initiatives to comply with the prevailing contract-law doctrine.” As a result, new law was passed allowing all sects to incorporate and hold property—“the law created a new system of general incorporation for all religious bodies to follow.” All churches in the state incorporated under the new law (Ibid., pp. 112-113).

At the same time that laws providing for incorporation of churches were being made, the churches were being redefined as private entities, and care of the poor and needy was passing from the church to the state. Prior to disestablishment, taxes collected by the state were transferred to churches for salaries of pastors, building, and charities. With disestablishment, charity went with the money, that is, with the state which could collect taxes, and not with the church. Rather than perceiving churches as helping society address its concerns, churches in the 1790s were recognized as impediments to social progress as public institutions might rationally conceive of it (See, e.g., Ibid., pp. 118-119).

In South Carolina, “[d]isestablishment once more followed and conformed to the legal separation of public and private spheres.” The 1790 constitution of South Carolina guaranteed religious liberty and transformed the church into a private institution “when its power as a public institution became too threatening” (Ibid., p. 132).  After 1790, poor relief, record keeping, and education to a lesser degree passed from church responsibility to government or private citizen responsibility (Ibid., p. 148).

In Massachusetts, Isaac Backus and others were against incorporation of churches, but many Baptist churches did not heed their counsel. The issue arose because of the adoption of Article Three to the constitution of Massachusetts in 1780. Isaac Backus and other Baptists vehemently opposed its adoption. Article Three required that compulsory religious taxes be laid in each parish, as they had always been for the “support the public worship of God,” and for the “support and maintenance of public Protestant teachers of piety, religion and morality.” However, new was the requirement that “these taxes were to be laid upon all sects or for all sects.” “Any Protestant minister, of whatever sect, was guaranteed compulsory tax support and the minister of any sect could, if he received the majority of votes of a parish, become legally established” (William G. McLoughlin, Isaac Backus and the American Piestic Tradition (Boston: Little, Brown and Company, 1967), p. 147).

After adoption of Article Three, certain Baptists refused to pay the religious tax. One, Elijah Balkcom, was jailed and paid the tax under duress. He then sued the accessors for taxing him illegally and contrary to his constitutional right to freedom of conscience. Although the Baptist position prevailed in that case, another case two years later, Cutter v. Frost, reversed the Balkcom decision. The Superior Court in the Cutter case reconstructed Article Three against the intent of the legislators and said that dissenters had to file a certificate in order to have their taxes paid to their own church and that “only religious societies incorporated by law were under any circumstances entitled to legal recognition.” “To be incorporated, each dissenting congregation would have to petition the legislature to obtain a charter.” Hence the Superior Court closed the door to the liberty which Backus had proclaimed could not be shut after the Balkcom case. The Cutter decision “denied any way for the Baptists to avoid supporting the parish churches except by petitioning the legislature for incorporation.” Petitioning the government for incorporation “was an even more flagrant infringement of conscience than giving in certificates; it acknowledged the power of the State over the Church—the power to incorporate some and not others according to its own standards” (Ibid., pp. 158-163).

Another alternative, which was opposed by Backus, was proposed and tried—a taxpayer could file a certificate, pay the tax and, should the parish treasurer fail to pay the taxes to his own pastor, sue to have his taxes returned on the basis that the tax denied his constitutional right to freedom of conscience. This method was costly and time consuming and had to be done case by case. However, it was used with some degree of success.

Because of Cutter,many Baptist churches chose to incorporate. Hezekiah Smith led the movement of Baptist churches to incorporate in spite of opposition of Isaac Backus and the Warren Association. Many Baptists supported incorporation to comply with the Cutter case so that the state would return taxes paid by Baptists to their parishes, and to make possible contracts between the members of a church and its pastor, which assured a decent salary. Of course, Backus took the biblical position, seeing the relationship between pastor and other church members as spiritual. He believed that incorporation “acknowledged the right of the state to decide which churches could and could not be chartered,” and “gave all persons in the congregation [whether saved or not, thereby ‘allowing the unconverted members to outvote the converted’] the right to vote on building or repairing a meetinghouse as well as paying the minister’s salary” thereby bringing the same conflicts encountered by Congregational parishes. Other reasons for arguing for incorporation was to allow churches to hold property or endowment funds in the name of the church. Backus “pointed out that the law gave the deacons, or any other suitably appointed persons, the power to ‘receive and hold estates or donations which are given for religious purposes, and to manage the same at the direction and for the good of the church or society.’” Some Baptists incorporated, against Backus’ advice, to avoid distraint or imprisonment. The Religious Liberty Act of 1811 reversed the Cutter Case and applied Article Three to all churches whether incorporated or not (Ibid., pp. 220-223).

After the ratification of the Constitution, the United States Supreme Court, headed by Chief Justice John Marshall, relied on the contract clause of Article I Section 10 to delineate public and private actions. “[Most c]hurches adapted to the new legal environment after 1790 by reforming themselves as private voluntary associations assuming a corporate form” (McGarvie, p. 115). The primary case in the Marshall Court decisions is the Dartmouth College case in which the Court used the contract clause to prevent New Hampshire’s legislature from breaking its contract of incorporation and restructuring the organization of a private Christian school (See Ibid., pp. 12, 152-189). Prior to Dartmouth College, “state legislatures consistently repudiated school and university charters in order to redesign educational institutions to serve political ends” (Ibid., p. 165).

Britain chartered the institution in Dartmouth College as The Trustees of Dartmouth College in 1769. Under the charter, the Trustees of Dartmouth College was an independent corporation, not requiring any further “grant, license, or conformation” (17 U.S. (4 Wheat) at 522). The college was supported by both private and state funds. The college fell under the control of orthodox conservatives who wished to emphasize the God in people’s lives and to modify the curricula appropriately. Restrictions on students were increased in 1809, and “students objecting to increased restrictions rioted, becoming drunk, burning outhouses, vandalizing more orthodox students’ rooms, firing guns into the night air, and spreading garbage over the campus environs of their suspected enemies” (McGarvie, p. 167). A public and political debate ensued pitting republican enlightenment ideals against conservative religious beliefs. The establishment of religion was at the time also being hotly debated. “Republican interests focused on the trustees of the college as dangerous ideologues inhibiting the state’s progress” (Ibid., p. 169). A republican governor and republican majority were elected in the 1816 New Hampshire election. One of the first acts of the new government was to restructure Dartmouth College. Two more followed quickly. The acts amended the charter to allow the state government to restructure the charter, rename the corporation to Trustees of Dartmouth University and the name of the school, and increased the number of trustees by nine, from twelve to twenty-one, and named the governor as the source of all new trustees and of future replacements. “Even more significant was that the act created a board of overseers, appointed by the governor to govern the university, to undertake most of the responsibilities formerly held by the trustees. The board was authorized to approve or negate any action of the trustees to appoint and remove the president and officers of the university, to set their salaries, to establish professorships, to create new buildings, and to approve all faculty appointments” (Ibid., p. 171 citing Dartmouth College, pp. 540-544).

The legislature also expanded religious freedom at Dartmouth.

The trustees fought the new laws. The president of Dartmouth, Reverend Francis Brown, outlined the philosophical divide confronting the Court, New Hampshire, and the country:

“That the labours of the philosopher were so impotent, and the preaching of the apostle attended with such energy is not strange. The mind of Plato, after all his attainments, was involved in spiritual darkness. Paul, on the other hand, was irradiated with a light from heaven, strong and clear; and the same divine spirit, who at first imparted it to his own mind, accompanied it as it was conveyed from him to his fellow man…. If instead of placing Paul in contrast with Plato alone, I had supposed all the philosophers of Greece and Rome arrayed on one side against this single apostle, the general result would have been the same” (Ibid., p. 172, citing Brown, “Sermon,” pp. 19-20).

The case went all the way to the Supreme Court which denied the state the right to unilaterally reconstruct the corporation. The main importance of the case is not in the protection of contract rights, or to decide whether a governmental creation was entitled to less protection from the government than other contracts. Those issues had been resolved in prior cases (Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810); Terret v. Taylor, 13 U.S. 43 (1815)). The main importance of the case is in the reasoning of the Court which “expressed the Court’s perception of distinct realms of public and private action, and the role of the courts in the protection of private action from public action” (McGarvie, p. 175). According to Marshall, public institutions are not defined by their purposes, but as being part of the “civil government.” He reasoned that trustees and professors have no authority in or power over civil government, that they are not public officers and have no public duties (Dartmouth College, pp. 601-602, 635, 636). Thus, certain corporations are public and others private:

“The Dartmouth College case of 1819 was the crucial national pronouncement that repositioned the churches as private entities distinct from institutions of public governance. The decision expressed a new model of civic organization conceived with the Constitution. However, the legal model considered form rather than substance, imposing a private-public distinction and designating separate forums in which the two worldviews would hold sway. In this resolution, law perpetuated the contest between the two worldviews that form the intellectual basis of American culture” (McGarvie, p. 16).
“Arising out of the disestablishment controversy in New Hampshire, this decision sounded the death knell for New England establishment and confirmed the supremacy of liberal contract-law doctrine in all of the United States. Focusing on the contract clause of the Constitution, the Supreme Court recognized distinct private and public institutions and protected the former from interference by the latter. The old question of religious or church involvement in serving the public good, particularly in public education, was at the heart of the Dartmouth case” (Ibid., p. 152).

The case had other ramifications. Marshall wrote: “Charitable, or public spirited individuals, desirous of making permanent appropriations for charitable or other useful purposes, find it impossible to effect their design securely, and certainly, without an incorporation act” (Dartmouth College, p. 637). Thus, “unincorporated charitable institutions are too vague to receive bequests of decedents, as their intentions cannot be given definite assurance of fulfillment without a corporate charter and an organization that establishes parameters for the future use of funds” (McGarvie, p. 178). The same year, Marshall found that a court of equity could not establish “a vague legacy, the object of which is indefinite” even though the intentions of a testator to leave much of his estate to the Philadelphia Baptist Association were obvious, because “a court could not create a legal entity in order to enable it to receive a bequest consistent with a testator’s intent…. Without incorporation, under which the trustees were legally committed to serve the enunciated purposes, the funds left to an association had no assurance of being used for any specific end” (Ibid., p. 179 commenting upon Chief Justice John Marshall’s opinion in Trustees of the Philadelphia Baptist Association v. Hart’s Executors, 17 U.S. (3 Wheat) 1 (1819).).

  • Also, “After the Dartmouth College decision, government could not rely upon private philanthropic associations to address public perceptions of societal needs. The public-private distinction required states to define their priorities more carefully. No longer could states delegate to private concerns the responsibility for educating young people, caring for the poor, or creating roadways, because states could no longer exercise control over how these private concerns fulfilled their duties. To continue to rely on private concerns after 1819 risked creating educational, welfare, or infrastructure systems significantly at odds with legislative perceptions of the pubic interest.…
  • “In the process, civil society was redefined, separating governmental institutions from private charitable corporations. Religiously affiliated private associations pursuing their own goals remained viable on the institutional periphery of society. Marshall’s language in the Dartmouth College case expressed a major change in attitude from an earlier era: ‘These eleemosynary institutions do not fill the place which would otherwise be occupied by government, but that which would otherwise remain vacant’” (Ibid., p. 178).

Thus, the public and private spheres were divided with private spheres free to pursue their own visions for civil society, and the electorate would determine the public course of action. Protection was provided through the enforcement of contracts, an enlightenment device. The religion of secular humanism, the “religion of the republic,” “reduced Christian doctrine to its lowest common denominator, essentially a code of moral behavior expressed in the golden rule, and positioned God as a benevolent but uninvolved creator of natural laws” (Ibid., p. 188).

Since the Constitution did not recognize God in His exalted position of Supreme Sovereign of the nation and since it created a law modeled after biblical principles, including the biblical principle of separation of church and state, but leavened by some enlightenment principles, the direction of the nation in the long run could only be a much faster downward slide than if the founding documents had been formulated totally upon solid biblical principle under God.

Churches which incorporated under enlightenment principles were no longer truly free since the state created them, was their sovereign as to the earthly matters required by incorporation, and they were bound to comply with the terms of contracts which conflicted with biblical principles.

Federal government control of churches through IRS Code Sections 501(c)(3) and 508 tax exemption


Jerald Finney
Copyright © December 10, 2012
Revised April 26, 2014


Note. This is a modified version of Section VI, Chapter 4 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application; Chapter 4 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities


Click here for audio recording of this teaching.

The 501(c)(3) Song

A 501c3 church agrees to abide by the rules that come with the status. See article below for full explanation of those rules. A 501c3 church also has many regulations which it is required to honor. See Publication 4221: Compliance Guide for Tax Exempt Organizations (“Federal tax law provides tax benefits to nonprofit organizations recognized as exempt from federal income tax under section 501(a) of the Internal Revenue Code (the Code). The Code requires that tax-exempt organizations comply with federal tax law to maintain tax-exempt status and avoid penalties….”).

Click here to go to: ANSWER TO QUESTION REGARDING A LAWYERS FALSE STATEMENTS CONCERNING CHURCH CORPORATE 501(C)(3) STATUS

Requirements_501c3

Uncle Sam Wants God's Churches
Uncle Sam Wants God’s Churches

In the twentieth century, the federal government added more cheese to the trap—26 U.S.C. or Internal Revenue Code (“IRC”) § 501(c)(3) (“501(c)(3)” or “501c3”) tax exemption. The Internal Revenue Service (“IRS”) exerts a certain amount of control over an incorporated 501(c)(3) “church.” Scripture makes clear that God wants no one else—especially the unregenerate—controlling, defining, and restricting His bride from totally following His precepts. IRC terms set limits on and control the activities of the corporate 501(c)(3) religious organization. Definition of terms used in the IRC by IRS personnel who do not have the expertise to define biblical terms further results in the operation of a corporate 501(c)(3) organization in ways inconsistent with biblical principles.

501(c)(3) invites churches to seek a tax exemption from civil government, even though the First Amendment already has erected a “high and impregnable wall” of separation between church and state which forbids civil government from making any law, including any taxing law, respecting a New Testament church. A New Testament church, which is a non-legal entity, is also a First Amendment church. 501(a),(c)(3),(h) reads in relevant part:

Ҥ 501. Exemption from tax on corporations, certain trusts, etc.:

“(a) Exemption from taxation. An organization described in subsection (c) … shall be exempt from taxation under this subtitle [26 USCS §§ 1 et seq.] unless such exemption is denied under section 502 or 503 [26 USCS § 502 or 503]….

“(c)(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office….

“(h) Expenditures by public charities to influence legislation. (1) General rule. In the case of an organization to which this subsection applies, exemption from taxation under subsection (a) shall be denied because a substantial part of the activities of such organization consists of carrying on propaganda, or otherwise attempting, to influence legislation…” (26 U.S.C. § 501(c)(3) (2007) in relevant part).

1Notice, in the above law, that churches are not mentioned in 501(c)(3). It does mention, among other things, “[c]orporations … organized and operated exclusively for religious … purposes.” Even the federal government thereby recognizes that the basic character of a church who seeks and obtains 501(c)(3) status has changed and that church has become a “religious organization.” That happens when a church incorporates under state law. When a church incorporates, it becomes a corporation organized exclusively for religious purposes.

The state controls, defines, and instructs a corporate 501(c)(3) religious organization to a large degree. Control and definition go hand in hand. The federal government, not God, defines “religious purposes” as to an incorporated church. What if an incorporated 501(c)(3) religious organization considers an activity to be God-ordained and spiritual, but the civil government disagrees? The civil government with authority over that issue controls.

Under the IRS interpretation of 501(c)(3), to qualify for tax exempt status under 501(c)(3) religious organizations must meet the following requirements, i.e. abide by the following rules:

LBJ led the charge for Rule No. 4 in IRS Code Section 501(c)(3)
LBJ led the charge for Rule No. 4 in IRS Code Section 501(c)(3)

“1. must be organized and operated exclusively for religious, educational, scientific, or other charitable purposes, “2. net earnings must not inure to the benefit of any private individual or shareholder, “3. no substantial part of its activity may be attempting to influence legislation, “4. the organization may not intervene in political activity,

Rule No. 4
Rule No. 4

“5. the organization’s purposes and activities may not be illegal or violate fundamental public policy” (IRS Publication 1828 (2007), pp. 3, 5. This and all IRS publications referred to may be accessed at irs.gov. IRS details on proscription #3 are on pp. 5-6 of IRS Pub. 1828. Just mentioning a candidate may violate proscription #4. Detailed guidelines with consequences of violation of proscription #4 are on pp. 7-11 of Pub. 1828. As to proscription #5, public policy is determined by the courts.).

Notice that the last requirement—“may not violate fundamental public policy”—is not from law; that is, it is not listed as a requirement in § 501(c)(3). This requirement was made law by the Supreme Court of the United States in Bob Jones University, 461 U.S. 574, 578, 579, 580, 581, 582-583, 586-588, 588, 591 fn. 10, 595-596, 602 fn 28, 603, 604, fn. 29 at 604 (1983):

  • “On January 12, 1970, a three-judge District Court for the District of Columbia issued a preliminary injunction prohibiting the IRS from according tax-exempt status to private schools in Mississippi that discriminated as to admissions on the basis of race…. Thereafter, in July 1970, the IRS concluded that it could ‘no longer legally justify allowing tax-exempt status [under § 501(c)(3)] to private schools which practice racial discrimination.’ IRS News Release, July 7, 1970, reprinted in App. in No. 81-3, p. A235. At the same time, the IRS announced that it could not ‘treat gifts to such schools as charitable deductions for income tax purposes [under § 170].’ Ibid. By letter dated November 30, 1970, the IRS formally notified private schools, including those involved in this litigation, of this change in policy, ‘applicable to all private schools in the United States at all levels of education.’ …
  • The IRS implemented Rule No. 5, and the highest authority for the 501c3 religious organization upheld the IRS rule.
    The IRS implemented Rule No. 5, and the highest authority for the 501c3 religious organization upheld the IRS rule.

    “The court permanently enjoined the Commissioner of Internal Revenue from approving tax-exempt status for any school in Mississippi that did not publicly maintain a policy of nondiscrimination….

  • “Bob Jones University [was] a nonprofit corporation located in Greenville, S. C. Its purpose is ‘to conduct an institution of learning …, giving special emphasis to the Christian religion and the ethics revealed in the Holy Scriptures.’ Certificate of Incorporation, Bob Jones University, Inc. [Bob Jones University had a policy that] Students who date outside of their own race will be expelled…. After failing to obtain an assurance of tax exemption through administrative means, the University instituted an action in 1971 seeking to enjoin the IRS from revoking the school’s tax-exempt status.
  • “The United States District Court for the District of South Carolina held that revocation of the University’s tax-exempt status exceeded the delegated powers of the IRS, was improper under the IRS rulings and procedures, and violated the University’s rights under the Religion Clauses of the First Amendment…. The District Court found, on the basis of a full evidentiary record, that the challenged practices of petitioner Bob Jones University were based on a genuine belief that the Bible forbids interracial dating and marriage.
  • “The Court of Appeals for the Fourth Circuit, in a divided opinion, reversed…. The Court of Appeals concluded that § 501(c)(3) must be read against the background of charitable trust law. To be eligible for an exemption under that section, an institution must be ‘charitable’ in the common-law sense, and therefore must not be contrary to public policy. In the court’s  view, Bob Jones University did not meet this requirement, since its ‘racial policies violated the clearly defined public policy, rooted in our Constitution, condemning racial discrimination and, more specifically, the government policy against subsidizing racial discrimination in education, public or private.’ … The court held that the IRS acted within its statutory authority in revoking the University’s tax-exempt status. Finally, the Court of Appeals rejected petitioner’s arguments that the revocation of the tax exemption violated the Free Exercise and Establishment Clauses of the First Amendment.
  • “[Included in the case was Goldsboro Christian Schools, a nonprofit corporation located in Goldsboro, N. C., a private Christian school which prohibited interracial dating based upon sincerely held religious beliefs.]
  • “[The Supreme Court reasoned in adding the ‘public policy’ requirement to the [IRC]:]
  • ‘The general words used in the clause …, taken by themselves, and literally construed, without regard to the object in view, would seem to sanction the claim of the plaintiff. But this mode of expounding a statute has never been adopted by any enlightened tribunal — because it is evident that in many cases it would defeat the object which the Legislature intended to accomplish. And it is well settled that, in interpreting a statute, the court will not look merely to a particular clause in which general words may be used, but will take in connection with it the whole statute… and the objects and policy of the law….’ … (emphasis added by the Court).
  • ‘Section 501(c)(3) therefore must be analyzed and construed within the framework of the Internal Revenue Code and against the background of the congressional purposes. Such an examination reveals unmistakable evidence that, underlying all relevant parts of the Code, is the intent that entitlement to tax exemption depends on meeting certain common-law standards of charity — namely, that an institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy.
  • ‘This ‘charitable’ concept appears explicitly in § 170 of the Code. That section contains a list of organizations virtually identical to that contained in § 501(c)(3). It is apparent that Congress intended that list to have the same meaning in both sections. In § 170, Congress used the list of organizations in defining the term ‘charitable contributions.’ On its face, therefore, § 170 reveals that Congress’ intention was to provide tax benefits to organizations serving charitable purposes. The form of § 170 simply makes plain what common sense and history tell us: in enacting both § 170 and § 501(c)(3), Congress sought to provide tax benefits to charitable organizations, to encourage the development of private institutions that serve a useful public purpose or supplement or take the place of public institutions of the same kind.
  • ‘The predecessor of § 170 originally was enacted in 1917, as part of the War Revenue Act of 1917, ch. 63, § 1201(2), 40 Stat. 330, whereas the predecessor of § 501(c)(3) dates back to the income tax law of 1894, Act of Aug. 27, 1894, ch. 349, 28 Stat. 509, infra. There are minor differences between the lists of organizations in the two sections, see generally Liles & Blum, Development of the Federal Tax Treatment of Charities, 39 Law & Contemp. Prob. 6, 24-25 (No. 4, 1975) (hereinafter Liles & Blum). Nevertheless, the two sections are closely related; both seek to achieve the same basic goal of encouraging the development of certain organizations through the grant of tax benefits. The language of the two sections is in most respects identical, and the Commissioner and the courts consistently have applied many of the same standards in interpreting those sections. See 5 J. Mertens, Law of Federal Income Taxation § 31.12 (1980); 6 id., §§ 34.01-34.13 (1975); B. Bittker & L. Stone, Federal Income Taxation 220-222 (5th ed. 1980). To the extent that § 170 ‘aids in ascertaining the meaning’ of § 501(c)(3), therefore, it is ‘entitled to great weigh.’ … [the Court analyses ‘charitable trusts’]….
  • “Act of Aug. 27, 1894, ch. 349, § 32, 28 Stat. 556-557. The income tax system contained in the 1894 Act was declared unconstitutional, Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601 (1895), for reasons unrelated to the charitable exemption provision. The terms of that exemption were in substance included in the corporate income tax contained in the Payne-Aldrich Tariff Act of 1909, ch. 6, § 38, 36 Stat. 112. A similar exemption has been included in every income tax Act since the adoption of the Sixteenth Amendment, beginning with the Revenue Act of 1913, ch. 16, § II(G), 38 Stat. 172. See generally Reiling, Federal Taxation: What Is a Charitable Organization?, 44 A. B. A. J. 525 (1958); Liles & Blum….
  • ‘The exemption from taxation of money or property devoted to charitable and other purposes is based upon the theory that the Government is compensated for the loss of revenue by its relief from financial burdens which would otherwise have to be met by appropriations from other public funds, and by the benefits resulting from the promotion of the general welfare.” H. R. Rep. No. 1860, 75th Cong., 3d Sess., 19 (1938).
  • ‘A corollary to the public benefit principle is the requirement, long recognized in the law of trusts, that the purpose of a charitable trust may not be illegal or violate established public policy. In 1861, this Court stated that a public charitable use must be ‘consistent with local laws and public policy,’ Perin v. Carey, 24 How., at 501. Modern commentators and courts have echoed that view. See, e. g., Restatement (Second) of Trusts § 377, Comment c (1959); 4 Scott § 377, and cases cited therein; Bogert § 378, at 191-192….
  • ‘[The Court then explained why racial discrimination now violates clearly defined public policy.]
  • “[The Court concluded:]
  • ‘Racially discriminatory educational institutions cannot be viewed as conferring a public benefit within the ‘charitable’ concept discussed earlier, or within the congressional intent underlying § 170 and § 501(c)(3)…. ‘This Court has long held the Free Exercise Clause of the First Amendment to be an absolute prohibition against governmental regulation of religious beliefs, Wisconsin v. Yoder, 406 U.S. 205, 219 (1972); Sherbert v. Verner, 374 U.S. 398, 402 (1963); Cantwell v. Connecticut, 310 U.S. 296, 303 (1940). As interpreted by this Court, moreover, the Free Exercise Clause provides substantial protection for lawful conduct grounded in religious belief, see Wisconsin v. Yoder, supra, at 220; Thomas v. Review Board of Indiana Employment Security Div., 450 U.S. 707 (1981); Sherbert v. Verner, supra, at 402-403. However, ‘[not] all burdens on religion are unconstitutional…. The state may justify a limitation on religious liberty by showing that it is essential to accomplish an overriding governmental interest.’
  • ‘On occasion this Court has found certain governmental interests so compelling as to allow even regulations prohibiting religiously based conduct. The governmental interest at stake here is compelling.
  • “[The Court noted:] We deal here only with religious schools — not with churches or other purely religious institutions; here, the governmental interest is in denying public support to racial discrimination in education.
  • [The Court also stated:] “The IRS policy at issue here is founded on a ‘neutral, secular basis,’ Gillette v. United States, 401 U.S. 437, 452 (1971), and does not violate the Establishment Clause.”

Bob Jones Univ4Although Bob Jones University was limited to religious schools in that a church was not being attacked in that specific case, the same rationale that supported the Court’s conclusions can also be applied to 501(c)(3) religious organizations, although more hurdles will have to be jumped. It is common knowledge that the IRS regularly attacks such organizations for infractions of requirements of IRS regulation. The outcome of such a case against a church hinges upon the liberal-conservative makeup to the Court. Liberal dominated courts have no problem clearing whatever logical, legal, and/or spiritual hurdles they encounter.

God wants members of His body, the church, to decide what is spiritual and what is not. If His body messes up, He will take care of it. The IRS requirements require instruction, definition, and control. The IRS determines, subject to costly and time consuming court challenge, whether a restriction has been breached by a 501(c)(3) religious organization. These restrictions subject a religious organization to suit in the courts for violating a federal government law.

Especially notice the last IRS requirement. Fundamental public policy is above biblical principle if the two conflict. Certain public policies can, do, and will conflict with biblical principles. It is the responsibility of the church, not the state, to determine biblical principle as to the doctrines of the church. A nineteenth century Supreme Court wisely observed:

public-policy“The question, what is the public policy of a state, and what is contrary to it, if inquired into beyond these limits, will be found to be one of great vagueness and uncertainty, and to involve discussions which scarcely come within the range of judicial duty and functions, and upon which men may and will complexionally differ; above all, when that topic is connected with religious polity, in a country composed of such a variety of religious sects as our country, it is impossible not to feel that it would be attended with almost insuperable difficulties, and involve differences of opinion almost endless in their variety. We disclaim any right to enter upon such examinations, beyond what the state constitutions, and laws, and decisions necessarily bring before us” (Vidal v. Gerard’s Executors, 43 U.S. 127, 198; 11 L. Ed. 205; 1844 U.S. LEXIS 323; 2 HOW 127 (1844)).

Internal Revenue Code § 508
Internal Revenue Code § 508

New Testament churches under God are non-taxable. 501(c)(3) and IRC § 508 religious organizations are tax exempt. IRC § 508 (the codification of Public Law 91-172 ratified in 1969) provides in relevant part:

“§ 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. [Emphasis mine.] “(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 (2007)). [Emphasis mine.]

Note. A church applies for 501(c)(3) recognition by filling out and filing IRS Form 1023.

§ 508(a),(c) says churches are excepted from obtaining § 501(c)(3) tax exempt status. § 508 churches are an exception to the civil government requirement that certain organizations file for 501(c)(3) tax exempt status.

The beginning of a multi-page document to be filled out by a church who cares not that they dishonors the Lord.
The beginning of a multi-page document to be filled out by a church who cares not that they dishonors the Lord.
A law of man which enacts some biblical principles.
A law of man which enacts some biblical principles.

However, a church should rely on the First Amendment to the United States Constitution, not on § 508 status for three reasons. First, the First Amendment is a statement of the biblical principle of separation of church and state. This principle is fully explained in Sections I-III and the history of how the blood of millions of Martyrs led to the adoption of the First Amendment is explained in Section IV of  God Betrayed (PDF OF God Betrayed online version of God Betrayed, Order Information for God Betrayed and other books by Jerald Finney). 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 only on the biblical principle.

Second, to rely on § 508 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 is a law made by Congress which regards an establishment of religion. § 508 does not state that the First Amendment forbids Congress from making any law in violation of the First Amendment and, therefore, a church is non-taxable. § 508 states that Congress is declaring an exemption for churches. Hence, an adversary in a court proceeding can argue that a church has submitted herself to Internal Revenue Code § 501(c)(3) regulation and ignored her First Amendment status by relying on a law instead of the First Amendment. The Internal Revenue Service Publication 1828 states, that “churches which meet the requirements of § 501(c)(3) are automatically tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.” However, the New Testament (First Amendment) church will not be in court anyway for several reasons: the church is not a legal entity; is not a business; has no income; has no employees or staff; claims no § 508 status; and, no matter what the particular civil government does, honors the biblical principle of separation of church and state which is reflected in the First Amendment in America.

IRS Publication 1828, page 3
IRS Publication 1828, page 3

Church_BusinessThird, 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, cafes, etc.). Church members 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. Even a business which makes no profit pays no taxes. A church which does have net income should be taxed since she is operating as a business and not as a New Testament church.

If a church does not apply for § 501(c)(3) tax exempt status or claim § 508 tax exempt status, and if it is organized as a New Testament church, according to the First Amendment which agrees with the biblical principle of separation of church and state, the non-taxable status of that church must be honored. No matter what the civil government claims, that church cannot be taxed anyway because they have no income.

If a church successfully applies for § 501(c)(3) or claims § 508 exempt status, the government is granted some jurisdiction over the church since the civil government now declares and grants an exemption.

oru_tax_exempt_letter_sample“EXEMPT, a. Free from any service, charge, burden, tax, duty, evil or requisition, to which others are subject; not subject; not liable to; as, to be exempt from military duty, or from a poll tax; to be exempt from pain or fear. Peers in G. Britain are exempt from serving on inquests.

“2. Free by privilege; as exempt from the jurisdiction of a lord or of a court. “3. Free; clear; not included. “4. Cut off from. [Not used.]                                                                                   Shak.” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828)).

“exempt 2: free or released from some liability or requirement to which others are subject” (WEBSTER’S COLLEGIATE DICTIONARY 406 (10th ed. 1995)).

“PRIV’ALEGE, n.

“1.A particular and peculiar benefit or advantage enjoyed by a person, company or society, beyond the common advantages of other citizens. A privilege may be a particular right granted by law or held by custom, or it may be an exemption from some burden to which others are subject.“2. Any peculiar benefit or advantage, right or immunity, not common to others of the human race. Thus we speak of national privileges, and civil and religious privileges secured to us by our constitutions of government…. “3. Advantage, favor, benefit” (Ibid.).

8In spite of the fact that biblically sound churches are non-taxable, many, if not most, churches line up to incorporate and to become 501(c)(3) religious organizations. Why do churches apply? The IRS knows the answer:

“IRS concurrence that a religious organization is indeed a church is the best protection for a donor that his or her contribution to the church is tax-deductible and will not be challenged in an audit.  This knowledge makes a church’s fundraising efforts much easier” (Peter Kershaw, Hushmoney (Branson, Missouri: Heal Our Land Ministries), p. 30, citing Michael Chitwood, Protect Your Contributions (referring to statement of IRS on p. 3 of IRS Publication 1828)).

God had reasons for denying jurisdiction to the state over spiritual matters and restricting state authority to earthly matters. One reason has to do with qualification for determining the meanings of words. The interpretation of laws and regulations requires the defining of words. Employees of civil government are not qualified to determine the meanings of spiritual terms; but, by dealing with spiritual matters, such people are called upon to determine the meanings of spiritual terms. They must determine the meaning of “religion,” “religious,” “church,” and many other words. Since these employees are operating outside their realm of expertise, the outcome of their decisions on these matters will conflict with the biblical meanings of those words. In defining words, therefore, civil government officials intrude upon the jurisdiction of the church—the church is subjected to the state.

For example, what does the word “religion” mean? The word “religion” is used only five times, in the Bible, and only once in a good sense:

“Which knew me from the beginning, if they would testify, that after the most straitest sect of our religion I lived a Pharisee” (Ac. 26.5).  [Bold emphasis mine]. “For ye have heard of my conversation in time past in the Jews’ religion, how that beyond measure I persecuted the church of God, and wasted it: And profited in the Jews’ religion above many my equals in mine own nation, being more exceedingly zealous of the traditions of my fathers” (Ga. 1.13, 14).  [Bold emphasis mine]. “If any man among you seem to be religious, and bridleth not his tongue, but deceiveth his own heart, this man’s religion is vain. Pure religion and undefiled before God and the Father is this, To visit the fatherless and widows in their affliction, and to keep himself unspotted from the world” (Ja. 1.26-27).  [Bold emphasis mine].

definitionThus, from a biblical perspective, religion in the good sense may be defined as:

“2. Religion, as distinct from theology, is godliness or real piety in practice, consisting in the performance of all known duties to God and our fellow men, in obedience to divine command, or from love to God and his law. James i. “3. Religion, as distinct from virtue, or morality, consists in the performance of the duties we owe directly to God, from a principle of obedience to his will. Hence we often speak of religion and virtue, as different branches of one system, or the duties of the first and second tables of the law. “Let us with caution indulge the supposition, that morality can be maintained without religion. Washington” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828), definition of “RELIGION”).

Since the Bible also teaches that there is only one true God, there can only be one religion in the good and true sense. This means that all other religions are bad and false. All other “gods” are actually no gods at all:

  • “As concerning therefore the eating of those things that are offered in sacrifice unto idols, we know that an idol is nothing in the world, and that there is none other God but one. For though there be that are called gods, whether in heaven or in earth, (as there be gods many, and lords many,) But to us there is but one God, the Father, of whom are all things, and we in him; and one Lord Jesus Christ, by whom are all things, and we by him” (1 Co. 8.4-6).
  • “What say I then? that the idol is any thing, or that which is offered in sacrifice to idols is any thing? But I say, that the things which the Gentiles sacrifice, they sacrifice to devils, and not to God: and I would not that ye should have fellowship with devils. Ye cannot drink the cup of the Lord, and the cup of devils: ye cannot be partakers of the Lord’s table, and of the table of devils” (1 Co. 10.19-21).
The world does not understand God and the one true religion.
The world does not understand God and the one true religion.

Since there is only one true God, there is only one religion with power from God. Before one can know that one true God, one must know Jesus Christ, God the Son: “Jesus saith unto him, I am the way, the truth, and the life: no man cometh unto the Father, but by me. If ye had known me, ye should have known my Father also: and from henceforth ye know him, and have seen him” (Jn. 14.6-7).

The Bible, as pointed out above, recognized the Jewish religion. Members of the Jewish religion (and any other religion) who do not recognize the Lord Jesus Christ as sovereign God are false religions and have no piety or power from God. “And Jesus came and spake unto them, saying, All power is given unto me in heaven and in earth” (Mt. 28.18).  Unconverted Jews deny that Jesus Christ is God the Son. The Jewish religion, like all other religions except true biblical religion, is therefore a false religion. The IRS and the federal government to a great extent, however, have concluded that all religions are equal and have created a pluralistic code and a pluralistic nation.

Civil government officials are required by § 501(c)(3) to define “church.” By providing that churches can become legal entities by incorporating and obtaining 501(c)(3) status, the civil government assured that the IRS and the courts would have to define “church” because, first, a lot of churches would seek to incorporate and get government declared tax exempt status, thereby voluntarily taking themselves out from under First Amendment or New Testament status; and second, many religious organizations would claim to be churches so as to obtain the benefits offered by civil government. As one court noted,

“We hasten to emphasize that by its use of the term ‘church,’ Congress must have intended a more narrow classification than that embodied by a term such as ‘religious organization.’ Despite the lack of guidance from Congress, and in the absence of a more explicit regulatory definition of the term ‘church,’ we will continue our efforts to give a distinct meaning to this statutory classification” (Foundation of Human Understanding v. Commissioner of Internal Revenue, 88 T.C. 1341, 1361; 1987 U.S. Tax Ct. LEXIS 75; 88 T.C. No. 75 (1987)).

IRS Publication 1828
IRS Publication 1828

In attempting to define “church,” the IRS has “given certain characteristics [14 criteria] which are generally attributed to churches” (IRS Publication 1828 (2007), p. 23).  The court has recognized that 14-part test in determining whether a religious organization was a church. The 14 criteria are:

“(1) a distinct legal existence; “(2) a recognized creed and form of worship; “(3) a definite and distinct ecclesiastical government; “(4) a formal code of doctrine and discipline; “(5) a distinct religious history; “(6) a membership not associated with any other church or denomination; “(7) an organization of ordained ministers; “(8) ordained ministers selected after completing prescribed studies; “(9) a literature of its own; “(10) established places of worship; “(11) regular congregations; “(12) regular religious services; “(13) Sunday schools for religious instruction of the young; “(14) schools for the preparation of its ministers.” (American Guidance Foundation, Inc. v. United States, 490 F. Supp. 304 (D.D.C. 1980)).

“In addition to the 14 criteria enumerated above, the IRS will consider ‘[a]ny other facts and circumstances which may bear upon the organization’s claim for church status.’ Internal Revenue Manual 7(10)69, Exempt Organizations Examination Guidelines Handbook 321.3(3) (Apr. 5, 1982)” (88 T.C. at 1358).

The most glaring inaccuracy in the IRS criteria used to decide whether something is a church is the omission of God’s principles from the characteristics. When the natural man defines a church, he leaves God out; or, should he include God, he must have an incorrect conception and definition of God, since he does not know God. That is the most apparent problem with the IRS conception of a church. The natural man, as exemplified by the IRS characteristics of a church, overlooks the fact that Jesus is the one who builds and is the chief cornerstone of the church. If Jesus, and Jesus alone, is not the builder, there can be no church. Paul wrote, speaking to the church:

“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 growth unto an holy temple in the Lord: In whom ye also are builded together for an habitation of God through the Spirit” (Ep. 2.19-22).

The results of the attempts of the courts and IRS to define “church” are twofold: First, some of those “religious organizations” which are not “churches,” but have sought to be recognized by the civil government as “churches,” have been declared to be “churches” by the civil government; and second, New Testament churches which have sought and obtained incorporation and/or “tax exemption” have become legal entities and lost their status as New Testament churches solely under God.

The state and federal provisions and actions derived and resulting from those provisions which allow incorporation and declaration of tax exempt status of churches and religious organizations demonstrate:

(1)  the wisdom embodied in the First Amendment which recognized that the civil government is not qualified to “make [any] law regarding an establishment of religion, or [to prevent] the free exercise thereof.”

(2)  the undesirable consequences of deviation from the biblical principles that the church is a spiritual entity, the only spiritual institution ordained by God; the state is an earthly entity ordained by God to operate only within its God-given earthly jurisdiction; and that neither the church nor state should be over the other, but God should be over both.

(3)  that the federal government (and the states since the incorporation of the First Amendment by the Fourteenth Amendment) violates the First Amendment when civil government provides for incorporation and tax-exempt status for churches or any other religious organization.

(4)  most importantly, that most churches have abdicated their responsibility to honor their husband, the Lord Jesus Christ.

15Just one illustration of what can happen when the civil government determines if an organization is a church, when IRS officials determine what constitutes a church within the meaning of IRC § 170(b)(1)(A)(i), follows. The threshold question in determining whether an organization is a church described in § 170(b)(1)(A)(i) is whether the organization qualifies as a religious organization described in § 501(c)(3). Using the 14-part IRS test to determine whether a religious organization was a church, IRS officials held that an organization with the following purpose as stated in its articles of incorporation and bylaws was a church: “[T]o establish an ecumenical church to help people learn to pay attention, wake up, and discover what both Christ and Buddha referred to as one’s true self” (Internal Revenue Service Private Letter Ruling 8833001, 1988 PRL LEXIS 1594). The ruling stated:

“The organization was established to develop an ecumenical form of religious practice, place greater significance on the modes of religious expression that would unify western and eastern modes of religious practice, place greater significance on the mystical or interior experience of religious truth than that of most western church denominations, and be more spiritually satisfying to members than other existing church organizations” (Ibid.).

In other words, the IRS determined that an organization whose purpose was directly contrary to the principles for a church laid down by the Lord in His Word was a church.

The lost and most believers have no clue as to the true meaning of “New Testament (First Amendment) church,” and America is not a nation under God. The civil governments in the United States, following Satan’s principles, have constructed a code that undermines incorporated 501(c)(3) and 508 religious organizations. Yet most American “Christians” are fearful and more concerned with pleasing civil government than they are in pleasing the Lord, more concerned with allowing their members to claim a tax deduction than with pleasing their Husband, the Lord Jesus Christ. The Savior grieves.

The incorporation-501(c)(3) control scheme


Jerald Finney
Copyright © December 10, 2012


Note. This is a modified version of Section VI, Chapter 5 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application; Chapter 5 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?

The 501(c)(3) Song


From IRS Publication 1828. Click the image to go to the publication.
From IRS Publication 1828. Click the image to go to the publication.

Not only does the civil government know what it is doing when encouraging churches to incorporate and seek 501(C)(3) status; it also blatantly belittles the fact that the IRC provisions exempting churches from taxation and providing for certain controls over corporate 501(c)(3) “churches” are contrary to the First Amendment. The federal government flaunts the lack of knowledge and understanding of the average Christian as to both spiritual and earthly matters. The IRS states in  Publication 1828:

Congress has enacted special tax laws applicable to churches, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment of the Constitution of the United States.” [Emphasis mine.]

A comparison of the above statement with the words of the religion clause of the First Amendment reveals the fact that the IRS flaunts the fact that Congress has enacted laws “respecting the establishment of religion and preventing the free exercise thereof. ” The First Amendment religion clause says:

The Religion Clause of the First Amendment
The Religion Clause of the First Amendment

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…” (U.S. CONST. amend. I). [Emphasis mine.]

Parts of the IRC violate the First Amendment Religion Clause because those parts constitute a law respecting an establishment of religion which invites churches to give up their protection from civil government control and their free exercise of religion. The purposes and effects of that law is the subject of this chapter. The relevant IRC sections constitute an unconstitutional exemption-control scheme that allows the federal government to not only control and define “church,” but also to teach satanic principles to a church.

1Ti.3.1-5Churches which incorporate are legal entities. Churches which incorporate and get 501(c)(3) status are legal entities. Such churches have “a form of godliness, but den[y] the power thereof” (See 2 Ti. 3.5).  They are ignorant and unconcerned regarding the biblical issues of the sovereignty of God, state, church, and separation of church and state. That is because “they will not endure sound doctrine; but after their own lusts shall they heap to themselves teachers, having itching ears; And they shall turn away their ears from the truth, and shall be turned unto fables” (2 Ti. 4.3-4).

Usually a church who is an existing or prospective corporate 501(c)(3) religious organization relies upon “Christian” lawyers who scratch her itching ears. Such a church does not mind or gives little or no thought to the fact that she is breaking the heart of her spiritual Husband, Jesus Christ. Christian lawyers are among the most “educated” of Christians as to secular matters. Many advise churches to incorporate and take a 501(c)(3) status. The problem with those lawyers is that their secular humanistic education has far exceeded their biblical education in the issues of church, state, and separation of church and state. Some examples of advice given by “Christian” lawyers and other Christians concerning church incorporation and 501(c)(3) tax exemption follow:

  • Incorporate and get 501(c)(3) status. As long as the preacher preaches “the gospel,” the church can organize any way it wants to organize (Untold numbers of preachers, deacons, “Christians“ and the vast majority of “Christian” lawyers and law firms).
  • Incorporate [and get 501(c)(3) status]. It is the “path of least resistance” (Clergy & Professional Tax Conference, (1997) Michael Chitwood, p. 28, cited in Peter Kershaw, In Caesar’s Grip (Branson, Missouri: Heal Our Land Ministries, 2000), p. 72).
  • Incorporate [and get 501(c)(3) status]. Incorporation is not the same as accepting a license. “License” means permission by competent authority to do an act which, without such permission, would be illegal. Incorporation is just a way to hold property (Christian Law Association and Attorney David Gibbs. Horrible logic and a lie about what a corporation really is. Both licensing and incorporating along with 501(c)(3) status violate biblical principle. Just because one is wrong doesn’t make the other right.).
Jerald Finney
Jerald Finney

On the other hand, a few Christian lawyers give the following  legally and biblically sound advice to churches:

Do not incorporate and get 501(c)(3) status. There is no excuse for incorporating or operating as any other type of entity that violates biblical principles regarding separation of church and state. The Lord is grieved when His wife, the church, places herself, even partially, under another’s jurisdiction (Christian attorney Attorney Jerald C. Finney).

The authority of those attorneys who encourage churches to incorporate and get the 501(c)(3) exemption is either a false theology, human reasoning based upon a humanist philosophy contrary to principles in the Word of God, and/or a combination thereof. The outcome of their efforts has been not only one nation under man’s law (not under God), but also one church under man’s law (not totally under God). It is impossible to back up their position with a correct interpretation of Scripture.

SeparationOfChurchAndState4Many of those lawyers and firms that encourage churches to subjugate themselves to the state are there to “help churches, pastors, and members” if they get into trouble. They have seminars all the time in which they go over the constantly changing case law so that churches can continue to modify doctrine, behavior, and speech to comply with man’s ever changing laws, rules, and definitions. They will protect you. Corporate 501(c)(3) religious organizations will need these state lawyers because God will not be there to help no matter how much they pray and no matter the proclamations of such a church and her lawyers that God is blessing their “ministries.” Those lawyers proclaim victories (among mainly obvious defeats) which, in God’s eyes, are no victories at all. Satan is happy to see this continue because he would much prefer that churches voluntarily submit to him. The ultimate results which have been visibly transpiring for many years is the gradual devastating erosion of the law, fewer people being saved due to the demise of New Testament churches and Christianity, moral awfulness, and political anarchy in America.

In return, all that “Christian” lawyers who advise incorporation and 501(c)(3) status for churches need is for thousands of churches and individual church members to send regular contributions to support their law firms and pay their salaries while they hob-nob with high ranking civil government officials including Senators, Representatives, and even Presidents. This would be fine if not for the fact that they are not in line with biblical principles. If they were in line with the Bible, although powerful people would have nothing or very little to do with them, many churches might return to God, and God might begin to move and bring positive changes to the churches of this nation. Instead, most corporate 501(c)(3) churches remain in, at best, a lukewarm state.

“And unto the angel of the church of the Laodiceans write; These things saith the Amen, the faithful and true witness, the beginning of the creation of God;  I know thy works, that thou art neither cold nor hot: I would thou wert cold or hot. So then because thou art lukewarm, and neither cold nor hot, I will spue thee out of my mouth. Because thou sayest, I am rich, and increased with goods, and have need of nothing; and knowest not that thou art wretched, and miserable, and poor, and blind, and naked: I counsel thee to buy of me gold tried in the fire, that thou mayest be rich; and white raiment, that thou mayest be clothed, and that the shame of thy nakedness do not appear; and anoint thine eyes with eyesalve, that thou mayest see. As many as I love, I rebuke and chasten: be zealous therefore, and repent” (Re. 3.14-19).

SupremeCourtBecause some “Christian” lawyers have relied upon man’s reasoning—their own humanistic philosophies and beliefs as well as the humanistic reasoning found in man-made laws and court cases—America has seen a steady erosion in establishment clause jurisprudence, as well as in true biblical preaching and teaching in churches in all areas of theology, but especially in regards to biblical principles regarding the sovereignty of God, church, civil government, and separation of church and state. The word “Christian,” as a noun from a biblical perspective means: “a believer in Christ who is characterized by real piety.” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828) definition of “CHRISTIAN”) Piety has been defined as follows: “1. Piety in principle, is a compound of veneration or reverence of the Supreme Being and love of his character, or veneration accompanied with love; and piety in practice, is the exercise of these affections in obedience to his will and devotion to his service. Piety is the only proper and adequate relief of decaying man.” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828) definition of “PIETY.”).

Even though the state still recognizes that a church is different from other religious organizations, it does not know what a church is:

  • The term church is found, but not specifically defined, in the Internal Revenue Code (IRC). The term is not used by all faiths[.]” (IRS Publication 1828 (2007), p. 2).
  • “Churches and religious organizations may be legally organized in a variety of ways under state law…” (Ibid.).
  • “Unlike churches, religious organizations that wish to be tax exempt generally must apply to the IRS for tax-exempt status unless their gross receipts do not normally exceed $5,000 annually” (Ibid., p. 3; see also, IRC (26 U.S.C.) § 508).
Click the above image to learn more about Richard Garnett
Click the above image to learn more about Richard Garnett

Nonetheless, the state wants to control churches. Some legal scholars know what the civil government is up to with the incorporation-exemption-control scheme. For example, Richard Garnett, assistant professor at Notre Dame Law School, in a well-documented law review article wrote:

  • “The imposition of a tax is, after all, an assertion of power and an ‘application of force’ (Richard W. Garnett, A Quiet Faith? Taxes, Politics, and the Privatization of Religion, 42 B.C. L. Rev. 771, 772 (2001), citing Stephen L. Carter, The Free Exercise Thereof, 38 Wm. & Mary L. Rev. 1627, 1639 (1997)(“It is the application of force, not the happenstance that one is able to apply it with legitimate authority, that generates the power that destroys the specialness of religion.”)). The same is true of the decision not to tax, or to exempt from taxation. A power is no less real that is exercised selectively or indulged with restraint. The decision to exempt certain associations, persons, activities, or things from taxation presupposes and communicates the ability to do otherwise; definitional lines drawn to mark the boundaries of such exemptions implicitly assert the power to draw them differently…. My claim here is that the decision to exempt religious associations from federal taxation may reasonably be regarded as an assertion of power—the power, perhaps, to ‘destroy’—over these communities, their activities, and their expression….
  • “In other words, maybe the power to tax churches, to exempt them from taxation, and to attach conditions to such exemptions really does as Chief Justice Marshall quipped, ‘involve the power to destroy’ religion. Neither heavy-handed repression nor even overt hostility toward faith is required, but merely the subtly didactic power of the law. Government need only express and enforce its own view of the nature of religion—i.e., that it is a private matter—and of its proper place—i.e., in the private sphere, not in politics—and religious believers and associations may yield to the temptation to embrace, and to incorporate, this view themselves….
  • “It is an exemption-and-restriction scheme in which the government extends an invitation to ‘religious organizations’ to receive a tax exemption in return for allowing the government to interpret and categorize the expression and activities of the church. “There is the danger that, having made their own the government’s view of religion’s place, now-humbled and no-longer-prophetic religious associations will retreat with their witness to the ‘private’ sphere where—they now agree—they belong, leaving persons to face the state alone in the hollowed-out remains of the public square….
  • “Still it strikes me that the Internal Revenue Code Section 501(c)(3)’s exemption-and-restriction scheme is noteworthy in the extent to which it invites government to label as ‘propaganda’ or ‘campaign[ing]’ what are, for religious believers and communities, expressions of their faith and responses to their calling. It is far from clear that this is an appropriate task for the liberal state….
  • “My concern … is that the premises of the conditional exemption scheme, the labeling it invites, and the monitoring of distinctions it creates will tame religion by saying what it is and identifying what it is not, tempt religion to revise its conception of itself and of its mission, and convince religious consciousness to internalize the state’s own judgment that faith simply does not belong in politics….
  • “[The tax exemption] is simply the government’s way of paying churches not to talk about certain things, enforce certain beliefs, or engage in certain actions—in other words, it’s the government’s way of privatizing the church….
  • “By determining for its own purposes the meaning of religious communities’ statements and activities, and by enforcing the distinctions it draws, government subtly reshapes religious consciousness itself. In other words, by telling religion what it may say, really is saying, or will be deemed to have said, and by telling faith where it belongs, government molds religion’s own sense of what it is….
  • “[Certain pronouncements] led my colleague, Professor Bradley, to suggest in another context that ‘[t]he Court is now clearly committed to articulating and enforcing a normative scheme of ‘private religion.’ Indeed, he argues powerfully that the Court’s post-Everson v. Board of Education cases ‘are most profitably understood as judicial attempts to move religion into the realm of subjective preference by eliminating religious consciousness.’ … [T]he Court turned to privatization ‘as the ‘final solution’ to the problem of religious faction.’ Its ambition—not merely the unintended effect of its decisions—is not only to confine the potentially subversive messages of religion to a ‘nonpublic ghetto,’ but also to revise and privatize the messages themselves. Having acquiesced to judicial declarations that it is a private matter, and accepted that its authority is entirely subjective, religious consciousness is unable to resist the conclusion that its claims to public truth are ‘implausible nonsense,’ and therefore cannot help but concede the field of public life and morality to government….
  • “[T]his privatization of religion is not simply its institutional disestablishment or an entirely appropriate respect on government’s part for individual freedom of conscience and autonomy of religion institutions. Nor is the claim only that the exemption privatizes religion by deterring political activism and silencing political advocacy by religious believers and communities. It is, instead, that the exemption scheme and its administration subtly re-form religion’s conception of itself. Government evaluates and characterizes what churches say and do, and decides both what it will recognize as religious and what it will label as political….
  • “[P]rivatization of the church is its remaking by government and its transformation from a comprehensive and demanding account of the world to a therapeutic ‘cacoon wrapped around the individual.’ It is a state-sponsored change in religious believers’ own notions of what their faith means and what it requires…. The government tells faith communities that religion is a private matter, and eventually, they come to believe it.
  • “And finally, the retreat of religious associations to the private sphere suggests an ill-founded confidence that government will not follow. But it will. The privatization of religion is a one-way ‘ratchet that stems the flow of religious current into the public sphere, but does not slow the incursion of political norms into the private realm.’” (Ibid., pp. 772, 774-777, 779, 796-800 (citations omitted)).

How is the 501(c)(3) tax exemption-control scheme implemented? Simply by invitation. In the exemption and restriction scheme, the government extends an invitation to incorporated “religious organizations” to receive a tax exemption in return for allowing the government to interpret and categorize their expression and activities. In effect, this is, as to churches, an invitation which tests (1) the biblical knowledge of churches and church members, especially pastors (as to God’s biblical instructions in the area of church and state); and (2) their love for the Lord. Satan wants God’s children to voluntarily betray God.  He probably gets much more enjoyment from this than he would by forcible means. Certainly he knows that he is furthering his cause much more than he would by force and persecution which are always accompanied by many more people being saved, and an increased love for the Lord by His children who glorify God much more when being persecuted.

From IRS Publication 1828
From IRS Publication 1828

The IRS doesn’t hide the fact that the exemption-control scheme is implemented by invitation. The IRS openly proclaims:

“Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because such recognition assures church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits…. Unlike churches, religious organizations that wish to be tax exempt generally must apply to the IRS for tax-exempt status unless their gross receipts do not normally exceed $5,000 annually” (IRS Publication 1828 (2007), p. 3).

Would Christians not believe that churches are not required to obtain 501(c)(3) exemption should their pastor teach them the truth of the matter from the Bible? Sadly, most pastors believe the lie that churches must incorporate and obtain a 501(c)(3) status. Most “Christians” rely on their American education rather than God’s Word.  They put their trust in the government, and not in God.

But just imagine how the Lord feels about those few churches who keep His Word and do not deny His name. To the church in Philadelphia, God wrote:

“I know thy works: behold, I have set before thee an open door, and no man can shut it: for thou hast a little strength, and hast kept my word, and hast not denied my name…. Because thou hast kept the word of my patience, I also will keep thee from the hour of temptation, which shall come upon all the world, to try them that dwell upon the earth. Behold, I come quickly: hold that fast which thou hast, that no man take thy crown. Him that overcometh will I make a pillar in the temple of my God, and he shall go no more out: and I will write upon him the name of my God, and the name of the city of my God, which is new Jerusalem, which cometh down out of heaven from my God: and I will write upon him my new name” (Re. 3.8, 10-12). [Bold emphasis mine.]

A church is hypocritical if she incorporates and seeks 501(c)(3) status thereby becoming a religious organization which has entered into agreements with the state and federal governments, and then either complains or refuses to comply with the court’s decision after civil government intervenes in her affairs and the church fights the intervention through the court system and loses. After all, that church has already agreed to the sovereignty of the civil government when she signed her corporate contract and obtained 501(c)(3) status.

Spurious rationale for church Incorporation: limited liability/Incorporation Increases liability of church members


Jerald Finney
Copyright © December 10, 2012
Revised April 15, 2014


 This is a modified version of Section VI, Chapter 6 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application;  Chapter 6 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?


Contents:

I. Preface
II. Introduction
III. Protection from liability for the debts of the corporation
IV. Protection against torts and criminal acts
V. Protection for liability due to contract violations
VI. Conclusion
VII. Links to article on Internal Revenue Code laws as well as direct links to those laws

I. Preface

The author is thankful that the church he is a member of a church which is under Christ and Christ alone. Charity Baptist Tabernacle of Amarillo, Texas is a spiritual entity, not a legal entity such as a non-profit corporation with Internal Revenue Code Section 501(c)(3) status. His pastor, Benjamin Hickam, and the other members of Charity Baptist Tabernacle hold the relationship of Christ and His church on a high level, just as they have honored their earthly marriage relationships. They refuse to compromise that relationship.

To totally understand all the issues and sub-issues involved with church incorporation, one must not only have extensive knowledge of Biblical principles, but he must also have an understanding of history and law. You see, the issue of the relationship between church and state is very important to God and His Word completely explains His desired relationship. Historically, true Christians understood the importance of this relationship, and they stood up for their relationship even though they suffered greatly for their stand on this issue—they were imprisoned, drowned, beheaded, burned at the stake, hung, tortured, etc. because they loved their Savior and were willing to do all that He asked them to do.

According to the Word of God and the application of the principles concerning church, government, and separation of church and state, church incorporation displeases God. The author has done exhaustive studies of those principles and their application to incorporation and 501(c)(3) tax exemption of churches. The results of those studies are available for free on this website.

II. Introduction

Today, the most common reasons given by churches for incorporating and seeking 501(c)(3) status are (1) to obey every ordinance of man (2) limited liability; (3) to allow a church to hold property; (4) convenience—it is easier to get a tax deduction for tithes and offerings given to an incorporated 501(c)(3) religious organization than for tithes and offerings given to a New Testament church; (5) one’s convictions; and (6) winning souls is  more important than loving God; if a church is incorporated, don’t cause problems. Just continue winning souls because winning souls is more important than anything else, including loving God.

This article will deal with the second false reason, limited liability. Other articles cover the other five reasons:  

  1. Render Unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses When a pastor is asked why his church is incorporated, he will often quickly answer: “Because of Romans 13 [Romans 13:1-2 “Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained of God. Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation.” Or “We are to obey every ordinance of man.” He may also rely on some other verses. All these verses are examined in this online booklet which is also in online PDF form on this website. Not only that, no law requires a church to get incorporated or apply for 501(c)(3) status or claim 508 status. Instead, the highest law in America protects the right of churches to choose to remain free from corporate and 501(c)(3) or 508 status. See, e.g., First Amendment Protection of New Testament Churches/Federal Laws Protecting State Churches (Religious Organizations) 
  2. Limited liability (corporate status actually increases the liability of church members) (Section VI, Chapter  of God Betrayed; Chapter 6 of Separation of Church and State).
  3. Spurious rationale for incorporating: to hold property (Section VI, Chapter 7 of God Betrayed; Chapter 7 of Separation of Church and State).
  4. Spurious rationale for church corporate-501(c)(3) status: tax exemption and tax deductions for contributions OR Tax reasons given for church corporate 501(c)(3) status: a biblical and legal analysis (Section VI, Chapter 8 of God Betrayed; Chapter 8 of Separation of Church and State).
  5. Spurious rationale for church corporate-501(c)(3) status: one’s convictions (Not included in God Betrayed or Separation of Church and State).
  6. Spurious rationale for church corporate-501(c)(3) status: winning souls is more important than loving God/The Most Important Thing: Loving God and/or Winning Souls.

Many incorrectly argue that a church should incorporate to protect personal assets from liability (1) for the debts of the corporation, (2) for the torts and criminal acts of the corporation, and (3) for breach of contract by the corporation. Each of these arguments will be considered in light of biblical principle. A careful consideration of the facts will reveal that not only do churches violate principles in the Word  of God and grieve our Lord when they incorporate, they also increase the exposure of their churches and church members to liability.

Remember that although a New Testament church in America may still utilize property (real and personal) in conformity to Biblical principles, she is not a legal entity who can sue and be sued. A New Testament church owns no property and operates strictly according to principles in the New Testament. The New Testament church, unlike the incorporated state church, retains her First Amendment protections as well as other protections under the constitutions and statutes of the state. The incorporated church no longer has the full protection of the First Amendment, since she now is a legal person created under the laws of her new and additional sovereign. Corporate churches, unlike New Testament churches, can even be charged with certain crimes. When a church incorporates, additional exposure is taken on—the state can, at times, charge not only individuals, but also the corporation, with crimes. The purpose of the Biblical Law Center is to help churches organize solely under  the principles of God as laid out in His Word.

The author includes citations from various legal sources. Although many will not understand the meaning of those citations, the reader more familiar with the legal system will be able to check the veracity of the supported statements. Rest assured that legal assertions made herein are backed up by the law.

III. Protection from liability for the debts of the corporation

One may argue first that incorporating a church protects his personal assets from liability for the debts of the corporation. “One of the major attributes of the corporate form of organization is that it insulates shareholders from personal liability for the debts of the corporation…. As a general rule, and in the absence of a charter, constitutional, or statutory provision to the contrary, stockholders are not liable as such for any of the obligations of a corporation. Because a corporation is an entity, separate and distinct from its officers and stockholders, its debts are not the individual indebtedness of its stockholders” (18A AM. JUR. 2D Corporations § 724).

However, limited liability is not absolute:

  • “The general rule that shareholders are not liable for corporate obligations or conduct is subject to numerous exceptions. Shareholders may be held individually liable to prevent or redress fraud, to achieve equity, or to prevent the avoidance of a legal obligation or duty.
  • “If the corporation is a mere instrumentality or alter ego of the shareholder, the corporate entity will be disregarded, and the individuals owning the stock and the corporation treated as identical, with the result that such individuals will be personally liable for the acts and obligations of the purported corporation. The limitation of liability to the corporate assets must give way to imposition of personal liability if the actions of those in control of the corporation denigrate the purpose of limited liability, which is to encourage investment of risk capital. The fact that a corporation is undercapitalized is not sufficient in itself to establish personal liability of the shareholders.
  • “Corporate creditors may reach unpaid stock subscriptions, and if a corporation is liquidated, the shareholders are liable if, otherwise, they would be unjustly enriched by retaining assets of the corporation free from the debts of the corporation” (Ibid., § 728).

Courts look at the “independent operations” to see whether to set aside the corporate form and go to individuals within the corporation for liability. “Independent operations prong of test for determining if corporate form may be disregarded looks at such things as (1) whether corporation is operated as separate entity, (2) commingling of funds and other assets, (3) failure to maintain adequate records or minutes, (4) nature of corporation’s ownership and control, (5) absence of corporate assets and undercapitalization, (6) use of corporation as mere shell, instrumentality, or conduit of individual or another corporation, (7) disregard of legal formalities and failure to maintain arms–length relationship among related entities, and (8) diversion of corporation’s funds or assets to noncorporate uses” (InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003) cited in 46 A.L.R.3d 428).…

“Piercing the corporate veil is tool that courts use to prevent shareholders, who are not normally liable for corporate debts or liabilities, from hiding behind corporate shield when corporation is under their direct control; in such cases, court will disregard corporation’s identity and hold shareholder liable for corporation’s debt only where corporation has been used to commit fraud, violate a legal duty, or perpetrate a dishonest or unjust act in contravention of rights of another” (Huffman v. Poore, 6 Neb. App. 43, 569 N.W.2d 549 (1997) cited in 46 A.L.R.3d 428).

Also, most lenders require sureties to  the loan. The assets of those sureties are at risk in the event of default. When a church takes a loan, every member should consider themselves as guarantors, since a church is defined by God as a body made up of all the members.

Not only is limited liability for corporations (including non-profit corporations such as churches who choose to become religious organizations under state laws of incorporation) not absolute under the laws of their state sovereign, God holds churches to a high standard. What does the Bible say about debt and repayment of debts? First, neither a Christian nor a church should go into debt. “Owe no man anything, but to love one another: for he that loveth another hath fulfilled the law. For this, Thou shalt not commit adultery, Thou shalt not kill, Thou shalt not steal, Thou shalt not bear false witness, Thou shalt not covet; and if there be any other commandment, it is briefly comprehended in this saying, namely, Thou shalt love thy neighbour as thyself. Love worketh no ill to his neighbour: therefore love is the fulfilling of the law” (Ro. 13.8-10).

The Bible does not say “owe no man any thing unless you have to borrow money to build bigger church buildings, gyms, bingo halls, sports fields and facilities, cafeterias, fellowship halls, and/or any other type structures for the church.” Notice that the commandment not to covet is also included. Most importantly, notice the importance placed on love. Will a Christian who loves his neighbor seek to protect himself from debts he owes to others; debts which the Word of God instructed him not to enter into?

“He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much. If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches? And if ye have not been faithful in that which is another man’s, who shall give you that which is your own? 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” (Lu. 16.10-13). “Mammon” means: “Riches, wealth; or the god of riches. Ye cannot serve God and mammon. Matt. vi” (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828), definition of “MAMMON”)

Thus, churches which go into debt for buildings or anything else distort themselves and become servants of the lender and money, not servants of God. “The rich ruleth over the poor, and the borrower is servant to the lender” (Pr. 22.7). Pastors of churches who are serving mammon will find that they fear to preach everything God has laid on their hearts because they might offend some, especially rich Pharisees, who might either leave the church and/or cause problems within the church. Failure to preach the whole gospel is displeasing to the Lord.

Christians and churches are to seek godliness, not worldly riches:

“Perverse disputings of men of corrupt minds, and destitute of the truth, supposing that gain is godliness: from such withdraw thyself.  But godliness with contentment is great gain. For we brought nothing into this world, and it is certain we can carry nothing out. And having food and raiment let us be therewith content. But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.  But thou, O man of God, flee these things; and follow after righteousness, godliness, faith, love, patience, meekness. Fight the good fight of faith, lay hold on eternal life, whereunto thou art also called, and hast professed a good profession before many witnesses. I give thee charge in the sight of God, who quickeneth all things, and before Christ Jesus, who before Pontius Pilate witnessed a good confession; That thou keep this commandment without spot, unrebukeable, until the appearing of our Lord Jesus Christ: Which in his times he shall shew, who is the blessed and only Potentate, the King of kings, and Lord of lords; Who only hath immortality, dwelling in the light which no man can approach unto; whom no man hath seen, nor can see: to whom be honour and power everlasting. Amen. Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy; That they do good, that they be rich in good works, ready to distribute, willing to communicate;  Laying up in store for themselves a good foundation against the time to come, that they may lay hold on eternal life” (I Ti. 6.5-19).

The above verses speak to the saved person who is the temple of God, and, along with other believers, constitute a church body. Nowhere in the New Testament can one find a single verse condoning a church seeking riches and real or personal property. Rather, Christians are to be content with what they have. They are not to go into debt. If they will do the jobs God has given them, lusting after real property and other worldly things will vanish from their hearts and minds. “Let your conversation be without covetousness; and be content with such things as ye have: for he hath said, I will never leave thee, nor forsake thee. So that we may boldly say, The Lord is my helper, and I will not fear what man shall do unto me” (He. 13.5-6).

And as long as a church maintains her New Testament status and remains under Christ alone, she can own nothing since she is a spiritual entity. As will be shown, a church can utilize property in ways which conform to biblical principles.

The apostles, and true Christians in their church body down through the ages, have been careful not to seek worldly riches; and they preached the whole counsel of God no matter who was offended. Nothing was ever mentioned in the Word of God about the early church seeking real or personal property. Churches assembled on property, but churches did not own property. The goals of churches and individual Christians were spiritual, not earthly. Individual Christians, at times, even went further than required by biblical principles. “And all that believed were together, and had all things common; And sold their possessions and goods, and parted them to all men, as every man had need. And they, continuing daily with one accord in the temple, and breaking bread from house to house, did eat their meat with gladness and singleness of heart, Praising God, and having favour with all the people. And the Lord added to the church daily such as should be saved” (Ac. 2.44-47).

Thus, a New Testament church should not go into debt and should occupy property in a manner consistent with biblical principles. If a church does go into debt, God desires that she pay that debt back. Since the members made the debt, they are responsible for honoring God and man and paying the debt as agreed.

IV. Protection against torts and criminal acts

As to torts and criminal acts, anyone—no matter the kind of church he is a member of—is liable for his own tort or crime or for any tort or crime in which he participated or encouraged. In other words, should a member of either type church be directly connected to criminal or tortuous acts, that member is not insulated.

  • “Stockholders are not ordinarily liable for the tortious acts of a corporation unless they participate in or aid the commission of such acts. An individual’s liability for the tortious conduct of corporation depends upon that individual’s acts, and not upon any theory of vicarious liability based upon the individual’s status as an owner. For example, a stockholder is individually liable for constructive fraud committed by a corporation only if he or she had knowledge of and instigated the fraud.
  • “Caution: The rule shielding shareholders from liability for a corporation’s torts do not shield shareholders from personal liability in tort for their own misfeasance or nonfeasance, including liability for negligence; a shareholder may be liable if he or she is the central figure in a corporation’s tortious conduct. For example, a shareholder may be held personally liable for negligent acts in managing and supervising the employees of corporation, if those acts are a contributing factor in causing an injury” (18A AM. JUR. 2DCorporations § 726 (2007)).

A New Testament church cannot be and is not liable for the tort or crime of a member or members since she is not a legal entity. People in a New Testament church may commit and be held accountable for torts or crimes, but the church herself cannot commit a tort or crime. If only one or more in a New Testament church commit a crime or tort, the entire church cannot be charged or sued unless everyone in the church was involved. A Christian is not exempt from being falsely accused of a tort and/or a crime; and a Christian can walk in the flesh and commit or participate in a tort and/or a crime if he so chooses.

“It has been held that shareholders [or members] are not liable for a corporation’s violations of state or local statutes, ordinances, or regulations in the absence of proof of active participation in the management of the corporation or the wrongs. However, it has also been held that the purpose behind incorporating is not to protect those who control a corporation from answering for its criminal actions” (Ibid., § 727). Furthermore, not only individuals within a corporate church, but also the corporation itself is subject to state penal laws criminalizing certain acts of corporations, including non-profits:

“The view taken in the early cases that a corporation is not indictable for a criminal offense has long been abandoned, and it is now almost universally recognized that a corporation is not per se exempt from criminal prosecution. Courts and legislative bodies tend to impose the same standards of criminal responsibility upon corporations as upon natural persons…. a corporation cannot be sent to jail; the discharge of its liabilities, whether criminal or civil, can be effected only by the payment of money. Thus, it has been held in a number of cases that where an offense is one which can be committed by a corporation, and where the penalty provided is a fine, the corporation is liable to criminal prosecution…. The proposition that a corporation is amenable to criminal prosecution for offenses punishable by fine is also supported by cases holding that a corporation may be prosecuted for offenses punishable by fine and imprisonment … or by fine or imprisonment, or both…. It is also implicitly supported by myriads of cases in which corporations have been fined.” (80 A.L.R.3d 1220).

A New Testament church has safeguards, in addition to her supernatural and legal protections: she will not be involved with all the worldly matters with which an incorporated “church” and its members are involved and which give the incorporated church and its members and officers opportunities and temptations for wrongdoing. The member of a church who loves the Lord and has his eyes on spiritual, as opposed to material, matters will be more likely to love his neighbor and to behave in a pious manner. The member of any church should understand that not only the state, but also—and primarily—God, desires him to be liable for and make restitution for damages to another caused by his tort or crime or for any tort or crime with which he knowingly, intentionally, recklessly, or with negligence participates.

V. Protection for liability due to contract violations

A person is not ordinarily liable on contracts entered into by a corporation in which he or she owns stock. However, if a stockholder makes a contract as an individual, he or she is liable (18A AM. JUR. 2D Corporations, § 725).

“A shareholder may expressly guarantee a corporate obligation. A shareholder’s contract unconditionally guaranteeing payment of the corporation’s debts is not abrogated by negligence of the creditor that results in the debt not being discharged in bankruptcy. Whether a shareholder has guaranteed the credit of the corporation so as to become personally liable on its obligations in a particular case is a question of fact for the jury” (Ibid., § 730).

A New Testament church, being a spiritual entity, will not and cannot enter into any type of contract. Contract is an enlightenment principle which is antithetical to biblical principle. The author explains this principle in his writings and audio teachings (Go to, e.g., the following links: “Separation of Church and State Law Blog” (click the following link, “Union of Church and State in America, and scroll down and click on the audio teaching “6. Incorporation of Churches;” or click the following link, “Radio Broadcast,” and scroll down and click on the audio teaching segments under Section VI, Chapter 2, “Incorporation of Churches.” You will also find the teaching on this principle in Section VI, Chapter 2 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application and Chapter 3 of Separation of Church and State: God’s Churches: Spiritual or Legal Entities for which ordering information is available by clicking the following link: “Order Information for Books by Jerald Finney.”).

Should a church violate God’s principles by incorporating and entering into contracts, the Lord expects that church to honor those contracts at all costs (See Section III above).

VI. Conclusion

In conclusion, churches who incorporate dishonor the Lord and His principles concerning His desired relationship between church and state. Christians are responsible to God to study His Word and make the practical application of His Word to real life. The relationship between Christ and His churches is very important to Him.

“Husbands, love your wives, even as Christ also loved the church, and gave himself for it; That he might sanctify and cleanse it with the washing of water by the word, That he might present it to himself a glorious church, not having spot, or wrinkle, or any such thing; but that it should be holy and without blemish” (Ep. 5.25-27).

That relationship has been so important to Christians since the beginning of the Church that they have been willing to die rather than to dishonor it by becoming members of the established Catholic and Protestant churches or other state-church combinations. How important is that relationship to you and your church?

VII. Links to Internal Revenue Code Laws

You can read portions of the following Internal Revenue Code laws which pertain to churches and pastors by going to the following site: “Laws Protecting New Testament Churches in the United States: Read Them for Yourself”; or you may read an entire law online by clicking the following links:

  1.  § 501(c)(3). Exemption from tax on corporations, certain trusts, etc.
  2. § 508. Special rules with respect to section 501(c)(3) organizations
  3. § 7611. Restrictions on church tax inquiries and examinations
  4. § 1402. [Dealing with taxes on income of pastors]
  5. § 107. Rental value of parsonages
  6. § 102. Gifts and inheritances (Tithes and offerings are gifts and, therefore, according to the Internal Revenue Code § 102, not income)
  7. § 2503. Taxable gifts
  8. § 170. Charitable, etc., contributions and gifts

END

 

Spurious rationale for incorporating: to hold property


Jerald Finney
Copyright © December 10, 2012
Revised April 22, 2014


Note. This is a modified version of Section VI, Chapter 7 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application;  Chapter 7 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?


Contents:

I. Introduction
II. How a church can remain a spiritual entity under the authority of God (Scripture) only, not under the legal system in any way
III. Distinctions between a church corporation holding property and a pastor/trustee holding property for the benefit of the Lord
A. First distinction
B. Second distinction
C. Third distinction
D. Fourth distinction
E. Fifth distinction
F. Sixth distinction
G. Seventh distinction
IV. Other benefits of pastor/trustee holding property for the benefit of the Lord
V. The use of biblical terms within the legal system
VI. Conclusion: For the Glory of God

Note: You may go to the colored titles in this article by left clicking the links. Click “Reasons given for church incorporation,” “Non-theological reasons given for church incorporation,” or “Theological reasons given for church incorporation” to go to links to all of articles on spurious reasons given for incorporating churches. Those links are also in the left column of this blog.

I. Introduction

8Today, the most common reasons given by churches for incorporating and seeking 501(c)(3) status are (1) to obey every ordinance of man (2) limited liability; (3) to allow a church to hold property; (4) convenience—it is easier to get a tax deduction for tithes and offerings given to an incorporated 501(c)(3) religious organization than for tithes and offerings given to a New Testament church; (5) one’s convictions; and (6) winning souls is  more important than loving God; if a church is incorporated, don’t cause problems. Just continue winning souls because winning soul is more important than anything else, including loving God. .

This article will deal with the third false reason, to hold property. Other articles cover the other five reasons:  

  1. Render Unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses When a pastor is asked why his church is incorporated, he will often quickly answer: “Because of Romans 13 [Romans 13:1-2 “Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained of God. Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation.” Or “We are to obey every ordinance of man.” He may also rely on some other verses. All these verses are examined in this online booklet which is also in online PDF form on this website. Not only that, no law requires a church to get incorporated or apply for 501(c)(3) status or claim 508 status. Instead, the highest law in America protects the right of churches to choose to remain free from corporate and 501(c)(3) or 508 status. See, e.g., First Amendment Protection of New Testament Churches/Federal Laws Protecting State Churches (Religious Organizations) 
  2. Limited liability (corporate status actually increases the liability of church members) (Section VI, Chapter  of God Betrayed; Chapter 6 of Separation of Church and State).
  3. Spurious rationale for incorporating: to hold property (Section VI, Chapter 7 of God Betrayed; Chapter 7 of Separation of Church and State).
  4. Spurious rationale for church corporate-501(c)(3) status: tax exemption and tax deductions for contributions OR Tax reasons given for church corporate 501(c)(3) status: a biblical and legal analysis (Section VI, Chapter 8 of God Betrayed; Chapter 8 of Separation of Church and State)(This article covers reasons 3 and 4 above).
  5. Spurious rationale for church corporate-501(c)(3) status: one’s convictions (Not included in God Betrayed or Separation of Church and State)
  6. Spurious rationale for church corporate-501(c)(3) status: winning souls is more important than loving God/The Most Important Thing: Loving God and/or Winning Souls

Many incorrectly argue that a church should incorporate to protect personal assets from liability (1) for the debts of the corporation, (2) for the torts and criminal acts of the corporation, and (3) for breach of contract by the corporation. Each of these arguments will be considered in light of biblical principle. A careful consideration of the facts will reveal that not only do churches violate principles in the Word  of God and grieve ou

To properly understand the relationship between church and state, one must understand the ultimate relationship between the spiritual and the earthly, between a church and the property upon which that church assembles. I have thoroughly explained the spiritual-earthly distinction in God Betrayed/Separation of Church and State: The Biblical Principles and the American Application which is available free in online form (this article is a modified version of Section VI, Chapter 7 of God Betrayed and also Chapter 7 of Separation of Church and State: God’s Churches: Spiritual or Legal Entities?), in PDF form, and on the “Audio Teaching: Separation of Church and State” page of this website and on the “Radio Broadcast” page of“Church and State Law.”Ordering information for those who wish a hard copy may be found on the “Order Information for Books by Jerald Finney Page.

Mt.16.18_1Christ foretold, but did not explain the church (Mt. 16.18). The revelation of this mystery was committed to Paul. In his writings we find the doctrine, position, walk, and destiny of the church (1917 Scofield Reference Edition, n. 1 to Ep. 4.11, p. 1253). Other New Testament writers only touch on church matters. The New Testament makes clear that the church is a spiritual body which cannot own property. However, since a church is a spiritual organism and body made up of saved human beings, she must occupy earthly space. A group of human beings, although saved and spiritual, cannot meet in outer space. Thus, a spiritual body must meet together in an earthly space, upon earthly property. God has given no other alternative. “Not forsaking the assembling of ourselves together, as the manner of some is; but exhorting one another: and so much the more, as ye see the day approaching” (He. 10.25).

There is no teaching in the New Testament that condones a church becoming an earthly or legal entity. In fact, a church which becomes a legal or earthly entity violates biblical principles. Only a legal or entity can own property. A spiritual entity cannot own property. Thus, no church in the New Testament owned or held property since thoses churches were spiritual entities only. Churches in the New Testament assembled on property which the churches did not own.

idols3The love of property, not property in and of itself, has contributed mightily to the decline in the number of New Testament churches in America and the advance of heresy and apostasy. Churches have jumped to unbiblical conclusions as to how to possess property upon which to meet. Two considerations are important. First, as shown in Section II ofGod Betrayed and in corresponding audio teachings, from nowhere in the Bible can one infer that a building or property is a church. Nowhere in the New Testament is there any indication that a church owned property. This is because a church, under God, is a spiritual body. By owning property, a church violates biblical principle, becomes a legal entity, entangles herself with earthly matters, and ceases to be a New Testament church. A spiritual body cannot own property.

Nowhere does the Bible mention that the first churches owned property or that the Lord told churches to own property. In fact, the Great Commission says, “Go ye therefore, and teach all nations, baptizing them in the name of the Father, and of the Son, and of the Holy Ghost” (Mt. 28.19). Christ did not bring people into the temple or synagogue. Evangelism occurs outside the meeting place. Christians meet together for the preaching of the Word of God, for worshipping the Lord, for baptisms and for the Lord’s Supper. There they are uplifted and prepared to go into the World to evangelize. The church who is doing what God desires is in the world where she is a light to those who are lost, not under a bushel where her light is hidden. New churches must go out into the world where they can be a light, so they meet in storefronts or other rented spaces. Maybe some churches grow because they go into the world.

Jesus told church members that they would “be witnesses unto [Him] both in Jerusalem, and in all Judaea, and in Samaria, and unto the uttermost part of the earth” (Ac. 1.8). He said nothing about them getting big buildings or property. None of the conversions in the New Testament occurred in a church building, nor were the lost or new converts ever invited to a church building. Rather, “the Lord added to the church daily such as should be saved” (Ac. 2.47). “[T]here was a great persecution of the church who was at Jerusalem; and they were all scattered abroad throughout the regions of Judaea, and Samaria, except the apostles…. Therefore they that were scattered abroad went every where preaching the word” (Ac. 8.1, 4). Everywhere Christians went, they preached the Word publicly. Never was any concern for property, real or personal, expressed. This is because a church is spiritual, not earthly. Most “churches” today are consumed with their property. They will do anything to get property in the name of the church, and they will do anything to keep it. Church owned buildings are idols to them.

ChurchSecond, the Bible and reality reveal that a church, a spiritual entity, since the spiritual part of the Christian is still housed in an earthly body, must occupy an earthly space and, therefore, property when meeting. Originally churches many times met in a church member’s house. Thus, a church must be concerned with at least one temporal, earthly, secular matter—it has to decide upon what property it will meet and how it will gain the right to possess and assemble on that property. A church must make some type provision for property in order to be able to assemble together and exist.

All property is connected with civil government through a title. Someone must hold legal title to the property upon which a church meets. Since the church must possess property to exist, she should endeavor to possess property in a manner consistent with biblical principle. Again, a church cannot own property, since she is a spiritual entity.

Churches who ignore biblical principles can always rationalize incorporation and 501(c)(3) status. However, incorporation is not an option for a church who wishes to please our Lord and remain a New Testament church. In the colonies and early republic, as pointed out inGod Betrayed and other audio and written teachings by this authorBaptist churches ignored Scripture and sought incorporation for several reasons. For a time, one reason for betraying and displeasing God and incorporating in Massachusetts was to comply with the decision in the Cutter v. Frost case in 1785, and thus be sure that religious taxes paid by Baptists would be returned to their ministers by parish or town treasurers. That reason disappeared with the passage of the “Religious Liberty Act” of 1811, which reversed the Cutter Case by interpreting Article Three as applying to all churches, incorporated and unincorporated. For some Baptists a more compelling reason was to enable a congregation to make binding contracts between its members and its pastor, thereby guaranteeing regular payment of a decent salary. Those Baptists obviously cared little for the teaching of Scripture concerning contract and the manner in which a church was to provide for her pastor. In addition, incorporation gave all persons in the congregation the right to vote on building or repairing a meetinghouse as well as paying the minister’s salary and other matters both spiritual and earthly. Some Baptists argued that incorporation was necessary to hold property or endowment funds in the name of the church. The obsession with property, among other things, has caused churches to jump to unbiblical conclusions and join hands with the state.

II. How a church can remain a spiritual entity under the authority of God (Scripture) only, not under the legal system in any way

If the laws of men allow a church to utilize property openly, the church should do so only in a way that complies with biblical principle. Two biblically acceptable options for a church are the leasing of property by the pastor/trustee under a Declaration of Trust, or, if possible, using someone’s property at no cost. These options would be especially attractive should the pastor/trustee lease from someone who loves God and His church and makes a lease available at a nominal cost or at no cost. Some American churches are utilizing one of these methods.

DeclarationAnother means some churches are pleasing the Lord in the manner in which they meet on property is as follows. A pastor/trustee can hold property for Lord Jesus Christ as beneficiary. A church can execute a Declaration of Trust which proclaims to the world that the church is placing property under the care of a pastor/trustee who will hold the legal, earthly title to the property for the benefit of the true and equitable owner of the property, the Lord Jesus Christ. The Declaration of Trust and necessary associated documents are in line with both biblical principle and American law.

“Declaration” means: “Publication, manifestation; as the declaration of the greatness of Mordecai. Esth. X.; A public annunciation; proclamation; as the Declaration of Independence, July 4, 1776”( MERRIAM WEBSTER’S AMERICAN DICTIONARY OR THE ENGLISH LANGUAGE (1828) definition of “DECLARATION). Declaration of Trust is defined as follows:

AmJur“The act by which the person who holds the legal title to property or an estate acknowledges and declares that he holds the same in trust to the use of another person or for certain specified purposes. The name is also used to designate the deed or other writing embodying such a declaration” (BLACK’S LAW DICTIONARY 408 (6th ed. 1990) under definition of “Declaration.” This definition is consistent with the definitions in more authoritative legal references such as AMERICAN JURURISPRUDENCE 2D and CORPUS JURIS SECUNDUM).

This type of Declaration of Trust does not create a charitable trust or other trust which is a legal entity—this type of trust is only a means of holding property. This is important because the IRS recognizes that charitable trusts are creatures of the state, legally organized under state law, along with unincorporated associations, nonprofit corporations, and corporations sole (IRS Publication 1828 (2007), p. 2).

CJS“It has been said that trusts are generally divided into two main classes: private trusts and charitable trusts. A ‘charitable trust’ is one in which the beneficiary is a governmental entity or in which the purpose of the trust is to implement public welfare or convenience. The primary differences between a charitable trust and other private trusts are that a charitable trust may be perpetual, the denominated recipients of the trust income may be indefinite, and the intended beneficiary is the community itself. It has also been said that the fundamental distinction between private trusts and charitable trusts is that in a private trust, property is devoted to the use of specified persons who are designated as the beneficiaries of the trust, while a charitable trust has as a beneficiary a definite class and indefinite beneficiaries within a definite class, and has a purpose which is beneficial to the community” (76 AM. JUR. 2D Trusts § 4 (2007)).

This manner of holding property, that is by a pastor/trustee for the benefit of the Lord Jesus Christ, is according to biblical principle and is entirely distinct from the man invented anti-scriptural practice of holding property through incorporation. This manner of holding property does not affect the organization of the church at all and does not place the church under the state in any way.

Click here to download the first page of an actual church Declaration of Trust

III. Distinctions between a church corporation holding property and a pastor/trustee holding property for the benefit of the Lord

A. First distinction

1Incorporation can be distinguished from the holding of property by a pastor/trustee for the benefit of the Lord Jesus Christ in many ways which emphasize that incorporation is unbiblical and the concept of holding property in trust is found throughout Scripture.

First, under church incorporation, the church becomes a legal entity and holds property. I have done a much more detailed analysis of incorporation with cited authority in Section VI of God Betrayed  as well as in other articles and audio teachings on this “Separation of Church and State” blog. I will not go into as much detail on the nature of incorporation in this article. Should you desire more legal citations for the assertions about incorporation, go to Section VI, especially Chapters 1-3, of God Betrayed and/or—to a lesser extent—the corresponding audio teachings which are available on this “Separation of Church and State Law” blog. Under the trust method, the pastor/trustee, not the church, holds the property for the benefit of the Lord Jesus Christ—a church holds no property when this method is used. This is totally in line with biblical principles as well as American law as is shown below.

B. Second distinction

Second, unlike a corporation which comes into existence with the consent or grant of the state, holding property in trust in this manner does not create a legal entity. The right to act as a corporation is a special privilege conferred by the sovereign power of the state or nation. On the other hand, God left property in trust to mankind to maintain it for His benefit. God Himself initiated the concept of holding property in trust. For a pastor/trustee to hold property in trust for the Lord Jesus Christ is biblical.

courtThe basic purpose of incorporation—to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, own it, or whom it employs—is at odds with the purpose of a church who is to glorify God by submitting herself to her Husband in all things. When a pastor/trustee holds property for the true beneficiary of all property, the Lord Jesus Christ (“For by him were all things created, that are in heaven, and that are in earth, visible and invisible, whether they be thrones, or dominions, or principalities, or powers: all things were created by him, and for him[.]” (Col. 1.16) by executing a proper Declaration of Trust and other necessary documents, a church is not placed under the state because no legal entity is thereby created. When a pastor/trustee holds property for the benefit of the Lord Jesus Christ, God is glorified in that the property is held by the pastor, not the church, in trust for the Lord Jesus, the equitable owner.

Secular law interprets “trust” in a manner consistent with biblical principle:

“A trust is not a legal entity. A trust is not an entity distinct from its trustees and capable of legal action on its own behalf, but merely a fiduciary relationship with respect to property. A trust is not a legal ‘person’ which can own property or enter into contracts, rather, a trust is a relationship having certain characteristics” (76 AM. JUR. 2D Trusts § 3 (2007).

This concept of trust is not overruled by Black’s Law Dictionary which defines “Entity” as follows:

Blacks“A real being; existence. An organization or being that possesses separate existence for tax purposes. Examples would be corporations, partnerships, estates, and trusts…. ‘Entity’ includes corporation and foreign corporation, not-for-profit corporation, business trust, estate, partnership, trust….” BLACK’S LAW DICTIONARY 532 (6th ed. 1990). Black’s Law Dictionary defines numerous kinds of trusts. For example, a business trust is organized for the business purpose of making money.

However, that definition definitely does not apply to the type trust relationship created by a Declaration of Trust by which a pastor/trustee holds property for the beneficiary, the Lord Jesus Christ. “Legal existence” means “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)). The trust contemplated by the author of this book, and as recognized by the law generally, only contemplates holding property by a pastor/trustee for the true beneficiary. No legal entity is thereby created. Black’s Law Dictionary is not the authoritative law. Sometimes it is wrong, or sometimes, as in regards to trust, it is partially wrong, or when taken in context of all it has to say on a subject, has combined some truth with error as to legal conclusions. Here, Black’s is internally inconsistent and clearly overruled by more authoritative legal sources which are cited in this article.

There is a caveat which, if biblical guidelines are followed, is inconsequential to a trust relationship in which a pastor/trustee holds property for the benefit of the Lord Jesus Christ. Modern civil law is beginning to treat a trust somewhat like a legal entity, but only so far as the relationship between the trustee(s) and the beneficiary or beneficiaries is concerned. An outside party still cannot sue a trust. No one can sue a church which is not a legal entity.

“Observation: The Restatement states that increasingly modern common-law and statutory concepts and terminology tacitly recognize the trust as a legal ‘entity,’ consisting of the trust estate and the associated fiduciary relation between the trustee and the beneficiaries. This is increasingly and appropriately reflected both in language (referring, for example, to the duties or liability of a trustee to ‘the trust’) and in doctrine, especially in distinguishing between the trustee personally or as an individual and the trustee in a fiduciary or representative capacity” (Ibid.).

This caveat should be of little or no consequence to church operation because the church does not own the property and cannot sue or be sued. The pastor, as pastor/trustee, has obligated himself under God to lay down his life for the sheep within the church he pastors, something a licentious pastor may not wish to do and something which a licentious, worldly Christian member of a church may not want him to do.

Even should a pastor or other member of a New Testament violate biblical law which is not criminal, the Bible teaches: “Dare any of you, having a matter against another, go to law before the unjust, and not before the saints? Do ye not know that the saints shall judge the world? and if the world shall be judged by you, are ye unworthy to judge the smallest matters? Know ye not that we shall judge angels? how much more things that pertain to this life? If then ye have judgments of things pertaining to this life, set them to judge who are least esteemed in the church. I speak to your shame. Is it so, that there is not a wise man among you? no, not one that shall be able to judge between his brethren? But brother goeth to law with brother, and that before the unbelievers. Now therefore there is utterly a fault among you, because ye go to law one with another. Why do ye not rather take wrong? why do ye not rather suffer yourselves to be defrauded? Nay, ye do wrong, and defraud, and that your brethren” (I Co. 6.1-8).

No matter the status of a church—New Testament church or corporate 501(c)(3)—state courts may possibly attempt to assume illegal jurisdiction initiated by a disgruntled member against a pastor or others in the church as regards temporal matters (just as almost all state courts will assume jurisdiction in a divorce petition initiated by a husband or wife married solely under God without state authority and without a state marriage license). This applies no matter how property utilized by a church is held. However, a court will find it impossible to achieve jurisdiction over a New Testament churc which is a spiritual entity. Appropriate courts may assume jurisdiction over a pastor/trustee who abuses a fiduciary duty.

C. Third distinction

Third, the state is sovereign over a corporation which is an invention of man and a legal entity. A trust relationship whereby a pastor/trustee holds property for the benefit of the Lord Jesus Christ under a Declaration of Trust, implements a principle God laid down in the Garden of Eden and which is seen throughout the Bible, and, as civil law agrees, does not create a legal entity over which the civil government has control. No principle in the Bible supports incorporation; rather, biblical principle is contrary to church incorporation and probably to any type incorporation.

D. Fourth distinction

Fourth, under a corporation, man does not hold property in trust for God. The corporation, a creature of the state, owns property. Under a properly drafted Declaration of Trust in conjunction with other properly worded documents, legal title to property is vested in a pastor/trustee for the benefit of the Lord Jesus. The church owns nothing, and cannot own anything as long as she remains a spiritual entity.

Ps.24.1Who owns all things? The sovereign God owns it all—not only the land, but also everyone and everything. That ownership is implicit in the fact that He created it all. “In the beginning God created the heaven and the earth” (Ge. 1.1). Then God created light and divided the light from darkness. Then He created the firmament and divided the waters which were under the firmament from those which were above the firmament. Then He created grass, herb yielding seed, and fruit trees yielding seed. Then He made the sun and moon, then living creatures whom he told to be fruitful and multiply. Then He created male and female in His image (Ge. 1).

He clearly stated His ownership of all in His Word:

  • God said, “Now therefore, if ye will obey my voice indeed, and keep my covenant, then ye shall be a peculiar treasure unto me above all people: for all the earth is mine” (Ex. 19.5).
  • God said, “The land shall not be sold for ever: for the land is mine; for ye are strangers and sojourners with me” (Le. 25.23).
  • “But who am I, and what is my people, that we should be able to offer so willingly after this sort? for all things come of thee [God], and of thine own have we given thee” (I Chr. 29.14).
    “The earth is the LORD’S, and the fulness thereof; the world, and they that dwell therein” (Ps. 24.1).
  • God said, “For every beast of the forest is mine, and the cattle upon a thousand hills” (Ps. 50.10).
  • “The heavens are thine [God’s], the earth also is thine: as for the world and the fulness thereof, thou hast founded them” (Ps. 89.11).
  • “The silver is mine, and the gold is mine, saith the LORD of hosts” (Hag. 2.8).

Thus, God owns all people and all things. When a church assembles together, God owns the land upon which they meet. The land is temporarily loaned to man for God’s benefit, but God owns it. Although man has the temporal legal title to the land, God has equitable title. God is the equitable owner. An equitable owner is “[o]ne who is recognized in equity as owner of the property, because real and beneficial use and title belong to him, even though bare legal title is invested in another” (BLACK’S LAW DICTIONARY 539 (6th ed. 1990)). “In a trust relationship, as distinguished from a ‘contract,’ there is always a divided ownership of property, to which the trustee usually has legal title and cestui [que trust] an equitable title” (BLACK’S LAW DICTIONARY 539 (6th ed. 1990)).

Mankind holds all property in trust for God. “Trust,” as a noun, has been defined as follows:

“1. Confidence; a reliance or resting of the mind on the integrity, veracity, justice, friendship or other sound principle of another person. He that putteth his trust in the Lord shall be saved. Prov. xxix.
“2. He or that which is the ground of confidence. O Lord God, thou art my trust from my youth. Ps. lxxi.
“3. Charge received in confidence. Reward them well, if they observe their trust.  Denham.
“4. That which is committed to one’s care. Never violate a sacred trust.
“5. Confident opinion of any event. His trust was with th’ Eternal to be deem’d Equal in strength.  Milton.
“6. Credit given without examination; as, to take opinions on trust.
“7. Credit on promise of payment, actual or implied; as, to take or purchase goods on trust.
“8. Something committed to a person’s care for use or management, and for which an account must be rendered.  Every man’s talents and advantages are a trustcommitted to him by his Maker, and for the use or employment of which he is accountable. [Bold emphasis mine.]
“9. Confidence; special reliance on supposed honesty.
“10. State of him to whom something is entrusted. I serve him truly, that will put me intrust. Shak.
“11. Care; management. 1 Tim. vi.
“12. In law, an estate, devised or granted in confidence that the devisee or grantee shall convey it, or dispose of the profits, at the will of another; an estate held for the use of another. Blackstone” (MERRIAM WEBSTER’S AMERICAN DICTIONARY OR THE ENGLISH LANGUAGE (1828), definition of “TRUST”).

A more modern dictionary defines “trust” as a noun as follows, in relevant part:

“… 3. a : a property interest held by one person for the benefit of another. … 5. a (2) : something committed or entrusted to one to be used or cared for in the interest of another….—in trust: the care or possession of a trustee” (WEBSTER’S COLLEGIATE DICTIONARY, 1269 (10th ed. 1995)).

76 American Jurisprudence 2d Trusts § 1 (2007) defines trust as follows:

  • “The fundamental nature of a trust is the division of title, with the trustee being the holder of legal title and the beneficiary that of equitable title. By definition, the creation of a trust must involve a conveyance of property.
  • “A ‘trust’ exists where the legal title to property is held by one or more persons, under an equitable obligation to convey, apply, or deal with such property for the benefit of other persons. A trust has been defined as a fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it. The Restatement definition is similar, providing that a trust, when not qualified by the word ‘resulting’ or ‘constructive,’ is a fiduciary relationship with respect to property, arising from a manifestation of intention to create that relationship and subjecting the person who holds title to the property to duties to deal with it for the benefit of charity or for one or more persons, at least one of whom is not the sole trustee.
  • “Caution: A trust consists not only of property, but also of the trust instrument, the trust’s beneficiaries and trustees, and the trust administrator [if any]” (WEBSTER’S COLLEGIATE DICTIONARY, 1269 (10th ed. 1995)).

AdamAndEvenBeforeFAllThe principle of “trust” runs throughout the Bible. God entrusted mankind with all property, real and personal. He owned all things—even the body, soul and spirit of man—but left all things, including the land, to man to be used for Him. God trusted man with all His earthly creation and left it to him in trust, as trustee or steward. “Trustee” means, in relevant part:

1 a : one to whom something is entrusted…. 2 a : a natural or legal person to whom property is legally committed to be administered for the benefit of a beneficiary (as a person or a charitable organization)…” (WEBSTER’S COLLEGIATE DICTIONARY 1269 (10th ed. 1995), definition of “trustee.”).

Adam and Eve were trustees of the earth and all that was in it. In what some call the Edenic Covenant, God gave responsibilities to mankind.

“The man and woman in Eden were responsible: (1) To replenish the earth with a new order—man; (2) to subdue the earth to human uses; (3) to have dominion over the animal creation; (4) to eat herbs and fruits; (5) to till and keep the garden; (6) to abstain from eating of the tree of knowledge of good and evil; (7) the penalty—death” (Ge. 1.28-31. This was pointed out on page 13 of God Betrayed).

Although entrusted with all things, God gave mankind free will as to whether to carry out their responsibilities as trustees. The principle that nations—Gentile nations and Israel—and individuals were left in trust of land and all things for the benefit of God runs throughout the Old Testament. This principle of trust continues to this day.

The Lord spoke of this concept of trust in at least two parables as recorded in the books of Matthew and Luke (Mt. 25.14-30; Lu. 19.12-27).  He spoke of an earthly master leaving certain amounts of his goods or money with his servants, according to their abilities. Actually, the more important parallel spiritual meaning was to the Lord and His servants. The master had an absolute right to his own goods, but he distributed to his servants to be used for the benefit of the master, the servants to be awarded according to their profitable use of the property entrusted to them. Some used the money productively and upon the master’s return presented him with a profit. The property belonged to the master, and the servants were to use it for the master’s benefit, not for their own benefit. Of course, they would be rewarded if they used the property wisely for the benefit of the master. One servant in each example returned only the original amount left in trust with them. The master instructed that the goods which he had left with the unprofitable servants be taken from them, and they were left with nothing. The profitable servants were rewarded by the master. In the story found in Matthew, the Master said, “[C]ast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth” (Mt. 25.30). Men, as servants of the Master are likewise left in trust of all things for His benefit and will be rewarded or punished according to their use of His goods.

1Tim.6.20Timothy was a pastor, and a pastor has a special position of trust unlike other members of the body. Timothy was a trustee of a spiritual heritage: “O Timothy, keep that which is committed to thy trust, avoiding profane and vain babblings, and oppositions of science falsely so called” (1 Ti. 6.20)[Emphasis mine]. The Bible proclaims that pastors rule over the body. “Remember them which have the rule over you, who have spoken unto you the Word of God: whose faith follow, considering the end of their conversation” (He. 13.7). “Obey them that have the rule over you, and submit yourselves: for they watch for your souls, as they that must give account, that they may do it with joy, and not with grief: for that is unprofitable for you” (He. 13.17). “Salute all them that have the rule over you, and all the saints…” (He. 13.24).

Biblically, a pastor must meet much more stringent God-given requirements than other members of the body:

  • “This is a true saying, If a man desire the office of a bishop [pastor [En1], he desireth a good work. A bishop then must be blameless, the husband of one wife, vigilant, sober, of good behaviour, given to hospitality, apt to teach; Not given to wine, no striker, not greedy of filthy lucre; but patient, not a brawler, not covetous;  One that ruleth well his own house, having his children in subjection with all gravity; (For if a man know not how to rule his own house, how shall he take care of the church of God?) Not a novice, lest being lifted up with pride he fall into the condemnation of the devil.  Moreover he must have a good report of them which are without; lest he fall into reproach and the snare of the devil” (I Ti. 3.1-7).
  • “For a bishop must be blameless, as the steward of God; not selfwilled, not soon angry, not given to wine, no striker, not given to filthy lucre” (Tit. 1.7).
  • These requirements are strict because the bishop is entrusted by God to “take care of the church of God” (I Ti. 3.5). He is a “steward of God.”
  • The pastor is an overseer of the church: “Take heed therefore unto yourselves, and to all the flock, over the which the Holy Ghost hath made you overseers, to feed the church of God, which he hath purchased with his own blood” (Ac. 20.28). “Overseers” here refers to pastors. [En2]
  • “The elders [pastors [En3] which are among you I exhort, who am also an elder, and a witness of the sufferings of Christ, and also a partaker of the glory that shall be revealed: Feed the flock of God which is among you, taking the oversight thereof, not by constraint, but willingly; not for filthy lucre, but of a ready mind; Neither as being lords over God’sheritage, but being ensamples to the flock.  And when the chief Shepherd shall appear, ye shall receive a crown of glory that fadeth not away” (I Pe. 5.1-5).

The pastor then is obviously responsible to act as ruler, trustee, steward, overseer of the church. Therefore, the Declaration of Trust must, to be biblical, name the pastor as trustee acting in trust for the beneficiary, the Lord Jesus Christ.

This does not mean that all men are not trustees. God has appointed every human being who has ever lived as trustee over himself, all that God has given him, his spiritual heritage, and his spiritual destiny. The earth was still God’s, but man was told to care for and possess His earth. Mankind was “trustee” of the earth. The pastor is trustee of the church.

stewardshipA declaration of the relationship between property held by a person for the benefit of Christ better serves its purpose if the terms “trust” and “trustee” as opposed to “stewardship” and “steward” be used.  “Steward” means in relevant part:

“1. A man employed in great families to manage the domestic concerns, superintend the other servants, collect the rents or income, keep the accounts, &c. See Gen. xv. 2—xliii….
“5. In Scripture and theology, a minister of Christ, whose duty is to dispense the provisions of the gospel,  to preach  its doctrines and administer its ordinances. It is required instewards, that a man be found faithful. 1 Cor. iv” (MERRIAM WEBSTER’S AMERICAN DICTIONARY OR THE ENGLISH LANGUAGE (1828), definition of “STEWARD”).

The first meaning of “steward” is reflected in several passages of the Bible: Ge. 15.2, 43.19, 44.1, 44.4; I K. 16.9; Mt. 20.8; Lu. 8.3, 12.42, 16.1-8 (parable of the unjust steward). The last meaning is reflected in I Co. 4.1, 2 and Tit. 1.7. “Stewardship” simply means “The office of a steward” (Ibid., definition of “STEWARDSHIP”). The terms “stewardship” and “trust,” are distinct. The term “trust” better describes the desired relationship between the Lord and the person who holds all he has for His benefit. Likewise, the meaning of the terms “steward” and “trustee,” are distinct. “Trustee” better describes the position of a person who is to hold property or anything else for the benefit of the Lord. Compare the definitions of “trust” and “stewardship” and “trustee” and “steward.”

Luke 16.1-8 is the parable of the unjust steward. Following that parable, Jesus said,

“He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much. If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches? And if ye have not been faithful in that which is another man’s, who shall give you that which is your own? 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” (Lu. 16.10-13). [Bold emphasis mine.]

E. Fifth distinction

contractFifth, incorporation creates several contracts. The primary contract created by incorporation of a church is a contract between church and state which places an incorporated “church” under the contract clause of Article I Section 10 of the United States Constitution as already shown. The articles of incorporation constitute a contract between the corporation and the state, between the corporation and its members (owners), and between the members (owners) themselves. Furthermore, the corporate church must also have bylaws which creates contracts between the members (owners) of the corporation, and between the corporation and its members (owners). All these contracts come under Article I, Section 10 of the United States Constitution. A Declaration of Trust, as described in this chapter, creates no agreement or contract at all with or between anyone. Under such a Declaration, a trustee merely holds legal title to property for the benefit of the beneficiary, the Lord Jesus Christ. “Contract,” is an enlightenment principle. According to enlightenment thinking, man—who is basically good according to this manner of thinking—through his reason can solve all problems. “Trust” is a biblical principle. According to the Bible, God is the Sovereign and only the application of His principles will bring positive consequences.

The members of the church, under the contracts of an incorporated “church,” not only control the church property, they also control the spiritual direction of the church. Corporate trustees become the de facto rulers and overseers of the church. Members are beginning to realize and understand and exercise the power given them in the contracts entered into between themselves and the sovereign state, between themselves and the corporation, and between themselves. Dr. Greg Dixon explains:

contract2“Fundamental Baptists have operated through a strong pastor/leader who has been able to control his board, but as David Gibbs, Jr. told me [Dr. Dixon] 20 years ago, ‘We have a new breed of trustees now who are educated and understand their fiduciary responsibility.’ Even after the Baptists gained liberty through the First Amendment, they held property by the Protestant method through lay trustees. In reality they had a church board contrary to biblical and Baptist polity which lasts till this day. These trustees are now firing preachers for cause. One old preacher in Ohio testified at a fellowship meeting and said that the trustees fired him on Saturday night and changed the locks, and he couldn’t even get in on Sunday a.m. Another preacher in Colorado said that they fired him on Sunday p.m. and told him not to come back on Sunday night.  They have power to call the police.  They can violate the constitution and by laws, how can the preacher sue?

“Catholic clergy understand the effect of lay control of a ‘church.’ The Catholic laymen came to America without priests to begin with and started ‘churches’ including buying ‘church’ property and holding the property through the Protestant system with lay trustees. When the priests came they tried to take the property over through the corporation sole method as in Europe where the Bishop of the Diocese holds the property in his own name.  The lay trustees didn’t want to give up their power, but finally did; and the Catholic polity of corporation sole prevails to this day.” [En4]

F. Sixth distinction

A corporation goes to the law books and court, not to the Bible and God when problems arise.
A corporation goes to the law books and court, not to the Bible and God when problems arise.

Sixth, a corporation is established under a charter from the civil government and conclusively established by filing articles of incorporation with a state agency, the contents of which are commonly specified by a state’s corporation statutes. Statutory requirements as to the form and content of the articles or certificate must be substantially followed. No such requirements exist for the drafting or filing of a Declaration or Trust. A Declaration of Trust can be drafted in any logical manner which contains the elements of the trust and need not be filed to establish the trust relationship. A Declaration of Trust in no way either subjugates a church to the state or creates any contract of any kind between anyone.

G. Seventh distinction

Two headed monsterSeventh, whereas incorporation of a church creates a monstrosity, a pastor/trustee holding property for the benefit of the Lord Jesus Christ implements biblical principle. An incorporated church gets part of its powers from God and part from the civil government. It is under two heads. It operates partly under Satan and partly under God. A church who sees fit to become incorporated under state law is obligated to conduct its business activities in compliance therewith, including governmental regulation of its employment relationships, so long as the employment does not depend on doctrinal matters.

A church who meets on property held by a pastor/trustee for the benefit of the Lord Jesus Christ and does not connect herself to the state in any other way is totally under God. No “business” practices or requirements in the operation of the church are initiated. By utilizing property held in trust by a pastor/trustee for the benefit of the Lord Jesus Christ, no entanglement of church and state results, no elections, board of directors, no officers, no employees, no business meetings, etc. are required since the civil government has absolutely no control over the secular or spiritual affairs of that church.

IV. Other benefits of holding property by a pastor/trustee

idols
An idol
An idol
An idol

Holding property in the recommended manner has additional benefits. Not only does holding property in this manner comport with biblical principles, holding the property in this manner lessens the chances that the property, and especially the buildings, will become idols. “Their idols are … the work of men’s hands.  … They that make them are like unto them; so is every one that trusteth in them” (Ps. 115.4-8). Finally, holding property in this way does not require that the church be structured as a business. A church who loves the Lord and desires to please the Lord will leave no stone unturned in her quest to structure herself as a New Testament church.

V. The use of biblical terms within the legal system

Thus, God instituted the concept of trust in the beginning, in the Garden of Eden. It is a biblical concept which is utilized in America today. Just because the law uses the concept and uses some of the same terms, does not mean that Christians can no longer use the concept and the term(s). For example, if adoption of biblical terms by the state means that thereafter use of those terms are prohibited by Christians, then Christians can no longer use the term “justification.” A Christian who objects to the use of the terms “trust,” “trustee,” and “beneficiary” should never again use the term “justification” since that is a term utilized by the state.

Simply put, justification means “a reason to be found not guilty even though you are guilty.” Biblically, all men are guilty before God. The only reason for a finding of “not guilty” before God will be salvation through the blood of Christ. Temporally, the criminal law provides justifications which allow guilty men to be found “not guilty.” The Texas Penal Code provides: “It is a defense to the prosecution that the conduct in question is justified under this chapter” (Texas Penal Code § 9.02 (2007)). Self-defense is a justification for murder. Texas criminal law further provides for self-defense: “… [A] person is justified in using force against another when and to the degree he reasonably believes the force is immediately necessary to protect himself against the other’s use or attempted use of unlawful force” (Ibid., § 9.31 (2007)). “Justification” in Texas law is a reason for your crime that provides a defense. If the issue of a defense is raised by the evidence, “a reasonable doubt on the issue requires that the defendant be acquitted” (Ibid., § 2.03(d) (2007)).

The Supreme Court of Texas recently addressed the use of certain secular terms by Tyndale Theological Seminary and Bible Institute, a ministry of HEB Ministries, Inc., a church in Fort Worth, Texas.[En5] In that case,

  • “a law in the State of Texas required a private post-secondary school to meet prescribed standards before it may call itself a “seminary” or use words like “degree”, “associate”, “bachelor”, “master”, and “doctor” — or their equivalents — to recognize attainment in religious education and training. Violation of the law was a Class A misdemeanor and was also punishable by a civil penalty of $1,000 per day. The issue was whether this requirement impermissibly intrudes upon religious freedom protected by the United States and Texas Constitutions.
  • “HEB ministries was fined $173,000 for violating the law. The Texas Supreme Court ruled in favor of HEB ministries.
  • “HEB contended that “the State cannot deny the use of such higher education terminology to religious schools that do not meet its standards.”

The court stated, among other important pronouncements, that

“[T]he government cannot set standards for religious education or training.” … “Neutrality is what is required. The State must confine itself to secular objectives, and neither advance nor impede religious activity.” … [S]etting standards for a religious education is a religious exercise for which the State lacks not only authority but competence.” … “By restricting the terminology a religious institution can use, the State signals its approval or disapproval of the institution’s operation and curriculum as vividly as if it hung the state seal on the institution’s front door.”[En6]

VI. Conclusion: For the Glory of God

2More and more churches in America are organizing according to biblical principles. Some have have operated as New Testament churches for many years. Others are learning that they have been misled by unknowing pastors, other “Christians” ignorant of the biblical doctrine of the church, and unscrupulous lawyers and “Christian” legal associations who make a good income by promoting incorporation and 501(c)(3) status for churches. More each day are coming to understand that that those devices are wicked and displease our Lord.

The pastor/trustee who holds property for the benefit of the Lord, since he holds that property in sacred trust for the Lord, is not to utilize the property as a profit-making venture in any way. The purpose of holding the property is to glorify God by allowing the church to assemble together to worship and glorify God,  since the worship of an incorporated church is not totally pure and since a church commits a great wickedness by incorporating. An incorporated church can, at best, be within the permissive—not the perfect—will of God. This does not mean that the pastor/trustee cannot sell the property at an appreciated price. All proceeds from a sale of such property, no matter the sales price, should be used for the glory of God. Since the pastor must meet the highest of biblical standards, he is least likely, of all church members, to deal carelessly or in a sinful manner in carrying out his responsibilities to God. Should a saved pastor betray his fiduciary duties to his Lord, (1) he faces far greater consequences from his Highest Authority than from any lower authority; and (2) the New Testament church, having placed their hope in eternal, not temporal matters, has not been affected at all, since that church is a spiritual, as opposed to legal, entity.

 Endnotes:

1. “Having completed the treatise of doctrine and of the manner of handling of it, as well also of public prayer, he now in the third place comes to the persons themselves, speaking first of pastors….” Geneva Bible Commentary available on SWORDSEARCHER software. Go to http://www.swordsearcher.com for information on SWORDSEARCHER software.
“As [the term ‘bishop’] is never used in the Scriptures with reference to prelates, itshould be used with reference to the pastors, or other officers of the church; and to be a pastor or overseer of the flock of Christ, should be regarded as being a scriptural bishop.”Albert Barnes Notes on the Bible available on SWORDSEARCHER software.

2.Overseers. In Acts 20:17, they are called elders; here, overseers, which is, in the original, the same as the word rendered sometimes bishops.” Abbott New Testament Commentary available on SWORDSEARCHER software. “Made you overseers – Εθετο επισκοπους , Appointed you bishops; for so we translate the original word in most places where it occurs: but overseers, or inspectors, is much more proper, from επι , over, and σκεπτομαι , I look. The persons who examine into the spiritual state of the flock of God, and take care to lead them in and out, and to find them pasture, are termed episcopoi, or superintendents. The office of a bishop is from God; a true pastor only can fulfill this office: it is an office of most awful responsibility; few there are who can fill it; and, of those who occupy this high and awful place, perhaps we may say there are fewer still who discharge the duties of it. There are, however, through the good providence of God, Christian bishops, who, while they are honored by the calling, do credit to the sacred function. And the annals of our Church can boast of at least as many of this class of men, who have served their God and their generation, as of any other order, in the proportion which this order bears to others in the Church of Christ. That bishop and presbyter, or elder, were at this time of the same order, and that the word was indifferently used of both, see Acts 20.17 (note).” Adam Clarke’s Commentary on the Bibleavailable on SWORDSEARCHER software.

3. “In this place the term πρεσβυτεροι, elders or presbyters is the name of an office. They were as pastors or shepherds of the flock of God, the Christian people among whom they lived.” Adam Clarke’s Commentary on the Bible available on SWORDSEARCHER software. “That Peter means the officers, not the aged persons, is shown by I Pe. 5.2.” The People’s New Testament Commentary available on SWORDSEARCHER software.

4. Dr. Greg Dixon is pastor emeritus of Indianapolis Baptist Temple. The information concerning the Catholic “church” is from John Cogley, Catholic America (Garden City, NY: Image Books, A Division of Doubleday & Co., Inc., 1960), pp. 200-203.

5. HEB Ministries, Inc. v. Texas Higher Education Coordinating Board, 235 S.W.3d 627 (Tex. 2007).

6. Ibid.

Spurious Rationale for church corporate-501(c)(3) status: tax exemption and tax deduction for contributions OR Tax Reasons Given for Church Corporate/501(c)(3) Status: A Biblical and Legal Analysis


Jerald Finney
Copyright © December 10, 2012


Note. This is a modified version of Section VI, Chapter 8 of God Betrayed: Separation of Church and State/The Biblical Principles and the American Application;  Chapter 8 of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?


Contents:

Preface
I. Introduction
II. Tax reasons for which churches seek 501(c)(3) tax exemption
III. The deductibility of gifts to New Testament churches
IV. Another reason some churches seek 501(c)(3) status: the convenience offered state 501(c)(3) church members
V. Conclusion
Note

Preface

This is a teaching and helps ministry motivated by love: love for our Lord first, and love for others second. I can find no more important subject than the love relationship between Christ and His children and Christ and His churches. Since I am convinced that this is a God-called ministry, I conduct this ministry at my own expense. I do not wish to dishonor my Lord by seeking worldly gain or riches through this ministry or by teaching heresy. Since I am not paid, nor do I seek to be paid for my work in this ministry, I will be convinced only by solid biblical reasoning. In other words, no one can buy me since my Lord, and my Lord only, has paid it all. My highest allegiance is to Him.

If you can disprove what I am teaching, you have an obligation—to God first, and to your brother in Christ second—to correct me. I will not accept conclusory statements backed up by nothing. I will only accept Holy Spirit guided insights based upon biblical principles and the application of legal and historical facts to those principles. If you prove me wrong, I have an obligation to repent, ask your forgiveness, and correct my teachings. If what I am saying is true, you have an obligation to God to conform your actions to God’s principles, including, if need be, repenting and reorganizing your church according to the principles of God.

I. Introduction

Today, the most common reasons given by churches for incorporating and seeking 501(c)(3) status are (1) to obey every ordinance of man (2) limited liability; (3) to allow a church to hold property; (4) tax reasons and convenience—it is easier to get a tax deduction for tithes and offerings given to an incorporated 501(c)(3) religious organization than for tithes and offerings given to a New Testament church; (5) one’s convictions; and (6) winning souls is  more important than loving God; if a church is incorporated, don’t cause problems. Just continue winning souls because winning souls is more important than anything else, including loving God.

This article will deal with the fourth false reason, tax reasons. Other articles cover the other five reasons:  

  1. Render Unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses When a pastor is asked why his church is incorporated, he will often quickly answer: “Because of Romans 13 [Romans 13:1-2 “Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained of God. Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation.” Or “We are to obey every ordinance of man.” He may also rely on some other verses. All these verses are examined in this online booklet which is also in online PDF form on this website. Not only that, no law requires a church to get incorporated or apply for 501(c)(3) status or claim 508 status. Instead, the highest law in America protects the right of churches to choose to remain free from corporate and 501(c)(3) or 508 status. See, e.g., First Amendment Protection of New Testament Churches/Federal Laws Protecting State Churches (Religious Organizations) 
  2. Limited liability (corporate status actually increases the liability of church members) (Section VI, Chapter  of God Betrayed; Chapter 6 of Separation of Church and State).
  3. Spurious rationale for incorporating: to hold property (Section VI, Chapter 7 of God Betrayed; Chapter 7 of Separation of Church and State)
  4. Spurious rationale for church corporate-501(c)(3) status: tax exemption and tax deductions for contributions OR Tax reasons given for church corporate 501(c)(3) status: a biblical and legal analysis (Section VI, Chapter 8 of God Betrayed; Chapter 8 of Separation of Church and State).
  5. Spurious rationale for church corporate-501(c)(3) status: one’s convictions (Not included in God Betrayed or Separation of Church and State)
  6. Spurious rationale for church corporate-501(c)(3) status: winning souls is more important than loving God/The Most Important Thing: Loving God and/or Winning Souls

This article will deal with the third and fourth reasons listed above: civil government recognition of tax exempt status assures church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits (For example, contributors to a church that has been recognized as tax exempt would know that their contributions generally are tax-deductible); and convenience. “Church Incorporation Increases Liability of Church Members” looks at the first reason, limited liability. “Analysis of another reason given for church corporate status” addresses the second reason, to hold property.” In addition, audio teaching on these issues are available on this website (see the categories at left); and Jerald Finney has written on these issues in (See God Betrayed/Separation of Church and State: The Biblical Principles and the American Application and/or Separation of Church and State/God’s Churches: Spiritual or Legal Entities? and other books by Jerald Finney for a thorough analysis of these matters. Click the following link to preview God Betrayed: Link to preview of God Betrayed.  These books and many other resources are available on the “Books” page of  the “Church and State Law” website.)

The author judges, as instructed by Scripture, all spiritual matters which he examines by the Word of God (1 Co. 2). After all, “All scripture is given by inspiration of God, and is profitable for doctrine, for reproof, for correction, for instruction in righteousness: That the man of God may be perfect, throughly furnished unto all good works” (2 Ti. 3.16-17; see also, e.g. 2 Pe. 1.19-21). The Bible is therefore written by the Holy Spirit, and the Holy Spirit guides the born again believer who meditates upon God’s Word in conjunction with reality, historical fact, and law concerning a given subject into truth concerning the matter which he is examining (See, e.g., Jn. 16.13; 1 Jn. 4.6; 2 Ti. 2.15-26). Only when a believer, a family, a church, and a nation do this will they escape the “snare of the devil who are taken captive by him at his will” (2 Ti. 2.15-26). Sadly, many individuals (including pastors), families, and churches who profess to be Bible believers have been deceived as to biblical principle, historical fact, and law concerning the preeminent issue of separation of church and state. Many churches who proclaim that they preach the Word of God have been mislead about historical fact, law, and biblical principle concerning this issue.

God chose every Christian to be a soldier (2 Ti. 2.4). He wants us to “endure hardness as a good soldier of Jesus Christ” (2 Ti. 2.3). God told us, “No man that warreth entangleth himself with the affairs of this life; that he may please him who hath chosen him to be a soldier” (2 Ti. 4). We are further told to walk in the Spirit, not in the flesh (Ga. 5). Our weapons are to be spiritual only (Ep. 6.10-18). Only when we fight with the spiritual armor as specified by God may we “be able to stand against the wiles of the devil” (Ep. 6.11). This is because “we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of darkness of this world, against spiritual wichedness in highplaces” (Ep. 6.12).

And yet most Christians, including pastors, and churches walk in the flesh in at least one way. They combine the church with the state by incorporating and getting Internal Revenue Code (“IRC”) § 501(c)(3) (“501(c)(3)”) status for earthly or fleshly reasons.

The author has fully examined the biblical principles as well as the application of those principles to the law of church incorporation and 501(c)(3) status in audio teachings, books, and articles. To fully understand these matters requires study, something which most “Christians” are unwilling to do. Some are willfully ignorant in that they just do not want to face truth. Others may be lazy, and some just don’t have the time. Pastors, evangelists, and missionaries have no good excuse. They are looked up to by other Christians for biblical guidance and leadership. They hold a high position of trust under our Lord.

II. Tax reasons for which churches seek 501(c)(3) tax exemption

As the author has shown in his articles, audio teachings, and books, according to IRC § 508, churches are an exception to the 501(c)(3) filing requirement (See, e.g., “Laws Protecting New Testament Churches in the United States: Read Them for Yourself;” “An Abridged History of the First Amendment,” etc.). Churches which do not file for exempt status under 501(c)(3) are non-taxable. Other types of religious organizations are not so: “Unlike churches, religious organizations that wish to be tax exempt generally must apply to the IRS for tax-exempt status unless their gross receipts do not normally exceed $5,000 annually” (IRS Publication 1828 (2009), p. 3): this link may be slow to download. Internal Revenue Service publications are not the law, just a comment on the law.).

New Testament churches under God are non-taxable. 501(c)(3) religious organizations under civil government are tax exempt. IRC § 508 (the codification of Public Law 91-172 ratified in 1969) provides in relevant part:

Ҥ 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. [Emphasis mine.]
“(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 (2007)) [Emphasis mine.]
Note. A church applies for 501(c)(3) recognition by filling out and filing IRS Form 1023.

§ 508(a),(c) says churches are excepted from obtaining § 501(c)(3) tax exempt status. In other words, churches are non-taxable; and, therefore, churches are an exception to the civil government requirement that certain organizations file for 501(c)(3) tax exempt status. Thus, even the federal government recognizes that a New Testament church is non-taxable.

If a church does not apply for exempt status, and if it is organized as a New Testament church, according to both God’s law (the hightest law) as laid out in the Bible and the First Amendment which agrees with the biblical principle of separation of church and state, the church is non-taxable. A church is better advised to claim First Amendment protection as opposed to  § 508(a),(c) status. If so, a church should not give acknowledgements for tithes and offerings. In a New Testament church, tithes and offerings are given by church members to God, not to the church. In effect, the church does the giving and the recipient is God. This does not mean the church member may not claim deductions for his tithes and offerings. contact attorney Jerald Finney for more on this matter.

If a church successfully applies for exempt status (and maybe if the church claims exempt status under § 508(a),(c)), the government is granted some jurisdiction over the church since the civil government now declares and grants an exemption.

Why then do churches seek 501(c)(3) tax exemption? The IRS gives the answer which pastors and Christians already know: “Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because such recognition assures church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits. For example, contributors to a church that has been recognized as tax exempt would know that their contributions generally are tax-deductible” (IRS Publication 1828 (2009), p. 3).

Many Christians who do not love the Lord and who have not studied this matter are fearful and want the assurance of civil government that their tithes and offerings will be tax-deductible. They do not realize that the First Amendment already gives them the assurance that their tithes and offerings will be tax-deductible (one day they may have to fight this issue out in court, but, as of now, the author knows of no non-501(c)(3) church member who has not been allowed the deduction after showing the IRS that the deduction claimed is for tithes and offerings to a church). What is one’s motive for giving: the glory of God or a tax deduction from the civil government?

As will be shown below, many church members also want the convenience given the state church (a church which is a legal entity such as a corporation, corporation sole, charitable trust, unincorporated association, and maybe also a 501(c)(3) religious organization) by the IRS in making their tax deductions for tithes and offerings . Many give tithes and/or offerings because they get a deduction. Some use earthly or fleshly reasoning, displease our Lord, and excuse themselves by saying that they can give more if they get the deduction, as if God could not and would not make up the difference. God does not want our money, He wants our love. If we love Him and our neighbor, all that we have will be His, and our only regret will be that we do not give more, regardless of earthly rules (See “The Most Important Thing: Loving God and/or Winning Souls” for a biblical study of the love relationship between Christ and His churches).

III. The deductibility of gifts to New Testament churches 

Will the IRS disallow a tax deduction for gifts to a New Testament church (a church which is not a legal entity such as an incorporation, unincorporated association, charitable trust, or corporation sole and which does not have 501(c)(3) status)? The IRS Code provides:

“§ 170.  Charitable, etc., contributions and gifts….
“(a) Allowance of deduction.
“(1) General rule. There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary. [Emphasis mine.] …
“(c) Charitable contribution defined. For purposes of this section, the term ‘charitable contribution’ means a contribution or gift to or for the use of— …
“(2) A corporation, trust, or community chest, fund, or foundation–
“(A) created or organized in the United States or in any possession thereof, or under the law of the United States, any State, the District of Columbia, or any possession of the United States;
“(B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals;’
“(C) no part of the net earnings of which inures to the benefit of any private shareholder or individual; and
“(D) which is not disqualified for tax exemption under section 501(c)(3) [26 USCS § 501(c)(3)] by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office” (26 U.S.C. § 170).

The author has found only one case, Morey v. Riddell, 205 F. Supp. 918 (S.D. Cal. 1962), which addresses the issue of deductions for members of a New Testament church. That case held that § 170 applies to what appears from the record to have been, at least for the most part, a New Testament church. The government argued that contributions did not qualify as deductions. The Court held for the church on all points. The government’s arguments and the court’s holdings in Morey follow:

   “(1) The government argued that the church was not in fact an ‘organized association as contemplated by the statute (no distinctive identifying name, no written charter, constitution, bylaws, or operational guide other than the Holy Bible; it had no permanent headquarters, it did not maintain comprehensive records, and its funds were not held in a bank account designated as a church account.)
Held. The members of the church regard themselves simply as members of the body of Christ (as following the teachings of Christ in the NT). They have no denominational name, no written organizational guide supplementary to the NT because they believe to do so would be to add an arbitrary gloss to biblical precepts, thus obscuring the word of God. Yet, in adherence to this philosophy, they have bound themselves together in an organized association. Many of them have worshipped together for years in furtherance of the purposes of the church.  They hold regular public meetings in homes and rented quarters for Bible study, worship and evangelism. They assemble together in ‘camp meetings’. As an association, they sponsor radio broadcasts and print and distribute Bible literature.  They recognize specific individuals as ministers and as church officers, from whom they accept guidance.  Through the years their ministers have regularly performed marriage ceremonies accepted as valid by civil authorities.  Thus, while the church lacks some of the common indicia of organization, it plainly is an organized association of persons dedicated to religious purposes.
(2) The government argued that the church was not organized in the U.S. as required by statute.
Held. The basis for this contention is certain testimony that the church had its beginnings in Jerusalem in 33 A.D. It is perfectly obvious that what was meant by this testimony was that the Christian Church in the all-inclusive sense began in Jerusalem in 33 A.D. There is no doubt that the association constituting the church for whose use the contributions were made was organized in the United States.
(3) the government argued that the church does not qualify as a beneficiary for deductible contributions because no showing has been made that in the event of its dissolution its assets would by operation of law be distributed solely for religious purposes.
Held. This suggestion is prompted by [certain sections of the Income Tax Regulations and the C.F.R. that establish] that upon dissolution its assets must be distributable solely for an exempt purpose, either by terms of its articles of by operation of law. This regulation has no governing force in respect to the determination of the deductibility of plaintiffs’ contributions for two reasons. It had not yet been promulgated at the time the contributions were made and tax returns filed…. The regulation … is obviously intended as a safeguard against the possibility that funds accumulated by an organization by reason of its tax-exempt status might, in the event of its dissolution, be used for purposes other that those to which it was dedicated…. [See case for important part of the analysis.] It is evident that the contributions made by plaintiffs have long since been spent in furtherance of the religious purposes of the church, and that there is no possibility of their application to other uses.
(4) The government argued that the contributions were made by checks payable to the order of four of the church’s ministers.
Held. The government cites several cases in which bequests inured to the benefit of the order. These cases are factually distinguishable because in each case the Court found that the testator intended to make the bequest to the named individual. In the present case, it is clear from the evidence that plaintiffs did not intend to make contributions to ministers, individually, but placed the funds in their hands, as agents, for the use of the church.
 “(5) The government argued that the plaintiff’s contributions were not deductible because they inured to the benefit of individuals (the church’s ministers).
Held. The individuals benefited were the church’s recognized ministers, who employed a portion of the contributions given for the use of the church to pay their living expenses.  Such use of the contributions does not constitute a departure from the statutory requirement that no part of the net profits of the organization shall inure to the benefit of any individual, for the sums expended to meet the living expenses of the ministers were no part of the net profits of the church. They were monies expended to meet legitimate expenses of the church in implementing its religious purposes. These expenses were of the same character as the salaries paid by any religious or charitable organization to its staff. The evidence was clear that the ministers devoted the major portion of their time to work of the church and that the amount of church funds used to pay their modest living expenses was small in comparison to the extent of their services.”

The IRS agrees that contributions to a non-incorporated, non-501(c)(3) church are deductible: “You can deduct contributions only if you make them to a qualified organization. To become a qualified organization, most organizations, other than churches and governments, as described below, must apply to the IRS…. You can ask any organization whether it is a qualified organization, and most will be able to tell you. Or you can check IRS Publication 78 which lists most qualified organizations. You may find Publication 78 in your local library’s reference section. Or you can find it on the internet athttp://www.irs.gov. You can also call the IRS to find out if an organization is qualified. Call  1-877-829-5500…” (IRS Publication 526 (2009)). [Bold emphasis mine.]

IRS Publication 778 also reflects the provisions of IRC § 508IRS Publication 778 states: “Publication 78 is based on information received in applications seeking recognition of exemption under Internal Revenue Code section 501(c)(3). Churches, their integrated auxiliaries, conventions or associations of churches, and public charities whose annual gross receipts are normally not more than $5,000 may be treated as tax-exempt without filing an application. Also, many churches are included in group exemptions (see below)  Thus, they may not be listed in Publication 78.”

 IRS Publication 526 and IRS Publication 778 comply with the law, IRC § 508, which is quoted in relevant part above.

IV. Another reason some churches seek 501(c)(3) status:
the convenience offered state 501(c)(3) church members

However, the above does not tell the whole story. Another reason some churches seek 501(c)(3) status is that IRS regulations make it more difficult for members to receive tax deductions for tithes and offerings to a New Testament church than to an incorporated 501(c)(3) religious organization. Those regulations are unconstitutional in that they prefer members of corporate-501(c)(3) churches over First Amendment churches (churches who choose to retain their First Amendment and New Testament status). In other words, those regulations encourage carnal and uninformed believers to join churches organized under secular, as opposed to biblical, law.

“A donor cannot claim a tax deduction for any single contribution of $250 or more unless the donor obtains a contemporaneous, written acknowledgment of the contribution from the recipient church or religious organization. A church or religious organization that does not acknowledge a contribution incurs no penalty; but without a written acknowledgment, the donor cannot claim a tax deduction” (IRS Publication 1828 (2009), p. 24).

To receive a deduction, one must have records to prove his contributions. For cash contributions (includes cash, check, electronic funds transfer, debit card, credit card, or payroll deduction) less than $250, he must keep one of the following:

“1. A cancelled check, or a legible and readable account statement that shows:
“a. If payment was by check—the check number, amount, date posted, and to whom paid,
“b. if payment was by electronic funds transfer—the amount, date posted, and to whom paid, or
“c. if payment was charged to a credit card—the amount, transaction date, and to whom paid.
“2. A receipt (or a letter or other written communication) from the charitable organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
“3. The payroll deduction records described next. … (IRS Publication 526 (2009)). See pp. 18-19 for rules for payroll deductions, contributions of $250.00 or more, and for noncash contributions.).

For contributions of more than $250, one must keep one of the following:

“You can claim a deduction for a contribution of $250 or more only if you have an acknowledgement of your contribution from the qualified organization or certain payroll deduction records.
“If you claim more than one contribution of $250 or more, you must have either a separate acknowledgement for each or one acknowledgement that shows your total contributions and the date of each contribution and shows your total contributions.” (Ibid.).

“Acknowledgement. The acknowledgement must meet these tests:

“1. It must be written.
“2. It must include:
“a. The amount of cash you contributed.
“b. Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain taken items and membership benefits), and
“c. A description and good faith estimate of the value of any goods or services described in (b) other than intangible religious benefits, and
“d. A statement that the only benefit you received was an intangible religious benefit, if that was the case. The acknowledgment does not need to describe or estimate the value of an intangible religious benefit. An intangible religious benefit is a benefit that generally is not sold in commercial transactions outside a donative (gift) context. An example is admission to a religious ceremony.
“3. You must get it on or before the earlier of:
“a. The date you file your return for the year you make the contribution, or
“b. The due date, including extensions, for filing the return.”

 “If the acknowledgment does not show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. If the acknowledgment does show the date of the contribution and meets the other tests just described, you do not need any other records” (Ibid.).

“Payroll deductions. If you make a contribution by payroll deduction, you do not need an acknowledgement from the qualified organization. But if your employer deducted $250 or more from a single paycheck, you must keep:

“1. A pay stub, Form W-2, or other document furnished by your employer that date and amount of the contribution, and
“2. A pledge card or other document prepared by or for the qualified organization that shows the name of the organization.

“If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More, next.” (Ibid.).

Also, according to the IRS, a church may assist the IRS and issue written statements for gifts of $250 or more given the church, which will be honored by the IRS if such receipts contain the following information:

“the name of the church or religious organization; date of contribution; amount of any cash contribution, and description (but not the value) of non-cash contributions; statement that no goods or services were provided by the church religious organization in return for the contribution; statement that goods or services that a church or religious organization provided in return for the contribution consisted entirely of intangible religious benefits, or description and good faith estimate of the value of goods or services other than intangible religious benefits that the church or religious organization provided in return for the contribution.
“The church or religious organization may either provide separate acknowledgments for each single contribution of $250 or more or one acknowledgment to substantiate several single contributions of $250 or more. Separate contributions are not aggregated for purposes of measuring the $250 threshold” (IRS Publication 1828 (2009), p. 24).

A pastor/trustee of a New Testament church holds property for the benefit of the Lord Jesus Christ (See “Analysis of another reason given for church corporate status: to hold property”). Thus, the pastor of a New Testament church, not the church herself, may keep records if he so desires. However, since all monies given are used for legitimate purposes, there are no profits. As to membership records, only those who have been born again are members of a church and only God knows who has been saved and adds to the church. The Bible contains no example of our Lord or the church keeping financial records. Judas stole from the money bag he carried” (See John 12.6). No apostle made an issue of it. Christ knew about it, but did not rebuke him in any way or turn Judas in to the civil authority. No instructions for a church to keep financial records can be found in the New Testament.

IRS regulations require that: “All tax-exempt organizations, including churches and religious organizations (regardless of whether tax-exempt status has been officially recognized by the IRS), are required to maintain books of accounting and other records necessary to justify their claim for exemption in the event of an audit” (IRS Publication 1828 (2009), p. 21).

A New Testament church is not an earthly entity or organization. Therefore, she has no earthly matter to keep records of. Keeping records would require a church to behave somewhat like a business and keep records of tithes and offerings, thereby destroying her status as a spiritual entity. Again, the pastor/trustee of a New Testament church may keep such records if he so desires. A pastor/trustee is not the church. He is just holding property and/or funds in trust for the benefit of the Lord Jesus Christ, an awesome responsibility under the Lord.

In addition, “charitable contribution” under IRC § 170 quoted supra, means “a contribution or gift to or for the use of … a corporation, trust, or community chest, fund, or foundation … organized and operated exclusively for religious [or] charitable … purposes … which is not disqualified for tax exemption under section 501(c)(3) [26 USCS § 501(c)(3)] by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” A New Testament church is not any of the organizations named in IRC § 170 and cannot accept limitations on her spiritual responsibilities. Remember, a New Testament church retains all her protections under the First Amendment to the United States Constitution, as well as under the state constitution and statutes of the state wherein she meets.

The author believes that a New Testament church cannot have employees. First, he believes that to do so is unbiblical. Secondly, to do so subjects the church to Federal Insurance Contributions Act (FICA) taxes which consist of Social Security and Medicare taxes. (Ibid., p. 18).

“Whether a church or religious organization must withhold and pay employment tax depends upon whether the church’s workers are employees. Determination of worker status is important. Several facts determine whether a worker is an employee. For an in-depth explanation and examples of the common law employer-employee relationship, see “IRS Publication 15-A, Employer’s Supplemental Tax Guide.  Those IRS definitions do not apply to members of a New Testament church involved in ministry because those members do not receive wages. The IRS states:

“Wages paid to employees of churches or religious organizations are subject to FICA taxes unless one of the following exceptions applies: (1) wages are paid for services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry, or by a member of a religious order in the exercise of duties required by such order, (2) the church or religious organization pays the employee wages of less than $108.28 in a calendar year, or (3) a church that is opposed to the payment of social security and Medicare taxes for religious reasons [files Form 8274]…. If such an election is made, affected employees must pay Self-Employment Contributions Act (SECA) tax… (IRS Publication 1828 (2009) p. 18).”

Other IRS rules apply to taxes on compensation of ministers. A New Testament church cannot pay wages or any type of compensation to her pastor or anyone else. According to the Bible, members of such a church can give gifts to take care of a pastor, but those gifts are not wages and are not required by contract or any other earthly rule.

Unlike exempt organizations or businesses, civil law provides that a church is not required to withhold income tax from the compensation that it pays to its duly ordained, commissioned, or licensed ministers for performing services in the exercise of their ministry” (Ibid., p. 18-19). In fact, a New Testament church cannot “compensate” anyone since she is a spiritual entity, and therefore can hold no property of any kind, nor can she hold money. Members as individuals can give tithes and offerings to be used for biblically approved uses. Such gifts are can be held by a pastor/trustee who holds property and money for the benefit of the Lord Jesus Christ and disperses money given for biblically acceptable ministries and uses.

Furthermore, anyone can give a gift or gifts to anyone else. According to the Internal Revenue Code § 102, gifts up to a certain amount are not income and therefore, not taxable. In 1998, gifts of up to $10,000 were not taxable, and that limit has increased each year since according to the formula laid out in Internal Revenue Code § 2503.

V. Conclusion

The Bible lays out the guidelines for churches. No matter what civil law says, a church and her members should adhere to those guidelines, even if inconvenienced, penalized, and/or persecuted. American law is more favorable to true New Testament churches than are the laws of almost all other nations, but the law has become somewhat convoluted, especially regarding deductions for the tithes and offerings of New Testament church members. The conveniences which the federal government offers churches through the 501(c)(3) exemption-definition-control scheme actually violates the First Amendment (See “The Internal Revenue Code § 501(c)(3) Exemption-Definition-Control Scheme” for more information on 501((3)). The First Amendment to the United States Constitution declares that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof….”

The complications, inconveniences, and penalties caused members of New Testament churches have come about because the great majority of churches and pastors have not honored the Lord in their understanding of and application of the biblical doctrine of the church. They have not determined, as did the Apostle Paul, to present their church as a chaste virgin to Christ (See II Co. 11.2). In other words, most churches do not love the Lord as He loves His churches (See,  “The Most Important Thing: Loving God and/or Winning Souls“). Most incorporate (or become unincorporated associations or corporations sole) and get 501(c)(3) status. As to this matter at least, they walk in the flesh, not in the Spirit. As the author chronicles in Section VI of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application and in other articles and audio teachings, after the adoption of the First Amendment, many “Bible believing” churches who had fought long and hard for religious liberty ignored the sound biblical advice of men like Isaac Backus and began to run to the state to incorporate. In the twentieth century churches sought 501(c)(3) status when it became available. They violated biblical principles, displeased the Lord, and gave up much of their First Amendment rights and protection.

“Nearly 30 years ago, an eminent minister insisted before Congress that: [T]he first amendment … should not permit the state to tell the church when it is being ‘religious’ and when it is not. The church must be permitted to define its own goals in society in terms of the imperatives of its religious faith. Is the Christian church somehow not being religious when it works on behalf of healing the sick, or for the rights of minorities, or as peacemaker on the international scene? No, the church itself must define the perimeters of its outreach on public policy questions” (Richard W. Garnett, A Quiet Faith? Taxes, Politics, and the Privatization of Religion. 42 B.C. L. Rev. 771, 772, 2001, citing Legislative Activity By Certain Types of Exempt Organizations: Hearings Before the House Ways and Means Committee, 92d Cong., 2d Sess. 99, 305 (1972) quoted in Edward McGlynn Gaffney, Jr., On Not Rendering to Caesar: The Unconstitutionality of Tax Regulation of Activities of Religious Organizations Relating to Politics, 40 DePaul L. Rev. 1, 20 (1990)).

A New Testament church is protected by God forever, and temporally by the First Amendment. On the other hand, a state incorporated church enters into a contract with the state, the sovereign of the corporation. By so doing, the incorporated church assumes a second personality—that of an artificial person, a legal entity, capable of suing and being sued (See “Separation of Church and State: Christians Who Call Evil Good and Good Evil” for more information on the meaning of church incorporation.). Incorporation provides for civil governmental regulation in many areas, and it does not protect the church from all governmental interference with matters outside the contract. When a church seeks and acquires 501(c)(3) status, she thereby has agreed to certain restrictions and that she will abide by public policy (See “The Internal Revenue Code § 501(c)(3) Exemption-Definition-Control Scheme” for more information on 501(c)(3) tax exemption.). She also submits herself to anti-biblical teaching from civil government through the IRS. Most egregious of all, she, like Israel who asked for a king, has committed a great wickedness against God by putting herself, at least partially, under another head. We are witnessing the undesirable consequences which follow church incorporation and 501(c)(3).

Most churches walk in the flesh and not the spirit as to the issue of separation of church and state and are guilty of one or more of the following, among other things: using far more resources to build magnificent edifices than to reach the lost; catering to individual’s flesh instead of preaching against sin, proclaming the true Gospel of salvation, and teaching the deeper principles and doctrines of Scripture; and organizing and running “businesses” instead of New Testament churches to one degree or another. The results are: churches, believers, and church families lack the power of God; many individuals, families, churches, and the nation follow Satan and his principles; and, most importantly, far fewer souls in America, as a percentage, are being saved than would be the case would churches only get serious about the love relationship between Christ and His churches.

Note

All legal conclusions in this article are those of the author, a Christian and a licensed attorney. Please do not attempt to act in the legal system if you are not a lawyer, even if you are a born-again Christian. Many questions and finer points of the law and the interpretation of the law cannot be properly understood by a simple facial reading of a civil law. For a born-again Christian to understand American law, litigation, and the legal system as well as spiritual matters within the legal system requires years of study and practice of law as well as years of study of biblical principles, including study of the biblical doctrines of government, church, and separation of church and state. One who has not paid the price and done his homework in these matters cannot gain a correct understanding of the issues by reading a few articles over the internet—including articles in this “Separation of Church and State” blog—or elsewhere; by studying cases and law himself; by consulting with lawyers, pastors, or Christians of state churches; by consulting with lawyers, pastors, or Christians who embrace a false theology; and/or by consulting with pastors or Christians who have no actual training in a bona fide law school and who have not practiced law.  Those with the proper credentials and who specialize can see and understand things that others cannot. The Lord wishes a church to be a spiritual body and each member of that body to practice the gift with which God has entrusted him. Many “Christians,” including many “Christian” lawyers who are making a lot of money by recommending legal status (non-profit corporation, 501(c)(3) tax exemption, etc), sometimes motivating the unknowledgeable through fear tactics, and helping churches to get legal entity status are not qualified under God and/or under man to advise on church-state issues. Every church and every believer is responsible to God in all matters pertaining to faith and practice, even in matters which require a deep understanding of biblical principles and man’s laws relating thereto.

The author is totally aware that many “Bible believing” pastors and Christians will not seek truth regarding these preeminent legal and spiritual facts and doctrines. He is at peace though, because he has done what the Lord has called him to do—declare the truths about these matters. That is all he can do. After all, the religious crowd did not have ears to hear and rejected the truths which were declared to them by God Himself, the Lord Jesus Christ.