The contrast between how God treats earthly and heavenly concerns is shown in many ways. I noticed and wrote on some distinct differences between church and state that render them mutually exclusive before I began to write God Betrayed. I included those differences in Section III, Chapter 4. Later, as I was reading some of Isaac Backus’ writings, it was gratifying to come across this statement:
“Christians must be careful not to apply God’s principles for the Jewish religion and the nation Israel to church and state. The principles for the two are so distinct that they are mutually exclusive. The government of the Church of Christ is as distinct from all worldly governments, as heaven is from earth!”
Rather than doing analysis of those nine differences, this lesson will list them. The interested student can got t0 his Bible and also to pages 153-169 of God Betrayed for more details. The important thing to understand is that the two are distinct. God ordained them both, but with different purposes, makeup, guidelines, goals, calling, position, relationships, privileges, destiny, and duties.
Here are some of the differences:
first, the contrasts between the manner of redemption of the nation of Israel and the manner of redemption of the individual;
second, the contrasts between the new law of Christ in the renewed heart and the external law of Moses;
third, the contrasts between the weapons and means of nations to attain their ends and the weapons and means of a believer and a church to attain their ends; see Fn for some of Roger William’s insights on this.
fourth, the contrasts between the different punishments ordered by God for the church and for the state (see Fn  for Roger Williams comment);
fifth, the contrasts between Old and New Testament prayer;
sixth, the contrasts between the hope of nations as seen in the Old Testament and the hope of the church as seen in the New Testament;
seventh, the contrasts between the promises to the nation Israel for obedience and the promises to the Christian for obedience;
eighth, the contrasts between the position and fate of the nation Israel and the position and fate of the church; and
ninth, the contrasts between the different houses of God for Israel and the church—the Old Testament tabernacle was earthly, the New Testament church is spiritual. A discussion of each of these contrasts follows.
The only conclusion, again, for churches should be a determination to separate from the world and pursue their heavenly calling under God, and God alone.
 Isaac Backus, A History of New England With Particular Reference to the Denomination of Christians called Baptists, Volume 2 (Eugene, Oregon: Wipf & Stock Publishers, Previously published by Backus Historical Society, 1871), p. 561.
 Roger Williams, the founder of Rhode Island, the first government in history to have religious liberty (See Section IV, Chapter 6 of God Betrayed) pointed out:
“[T]o take a stronghold, men bring cannon, culverins, saker, bullets, powder, muskets, swords, pikes, &c., and these to this end are weapons effectual and proportionable.
“On the other side, to batter down idolatry, false worship, heresy, schism, blindness, hardness, out of the soul and spirit, it is vain, improper, and unsuitable to bring those weapons which are used by persecutors, stocks, whips, prisons, swords, gibbets, stakes, &c., (where these seem to prevail with some cities or kingdoms, a stronger force sets up again, what a weaker pulled down); but against these spiritual strongholds in the souls of men, spiritual artillery and weapons are proper, which are mighty through God to subdue and bring under the very thought to obedience, or else to bind fast the soul with chains of darkness, and lock it up in the prison of unbelief and hardness to eternity” (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), pp. 119-120).
Roger Williams maintained that the civil power has five proper political means to attain its end:
“First, the erecting and establishing what form of civil government may seem in wisdom most meet, according the general rules of the word, and state of the people…. The magistrate has power to publish and apply such civil laws in a state, as either are expressed in the word of God in Moses’s judicials—to wit, so far as they are of general and moral equity, and so binding all nations in all ages—to be deducted by way of general consequence and proportion from the word of God.
“For in a free state no magistrate hath power over the bodies, goods, lands, liberties of a free people, but by their free consents. And because free men are not free lords of their own estates, but are only stewards unto God, therefore they may not give their free consents to any magistrate to dispose of their bodies, goods, lands, liberties, at large as themselves please, but as God, the sovereign Lord of all, alone. And because the word is a perfect rule, as well of righteousness as of holiness, it will be therefore necessary that neither the people give consent, nor that the magistrate take power to dispose of the bodies, goods, lands, liberties of the people, but according to the laws and rules of the word of God….
“Secondly, the making, publishing, and establishing of wholesome civil laws, not only such as concern civil justice, but also the free passage of true religion: for outward civil peace ariseth and is maintained from them both, from the latter as well as from the former.
“Civil peace cannot stand entire where religion is corrupted, 2 Chron. xv. 3, 5, 6; Judges viii. And yet such laws, though conversant about religion may still be counted civil laws; as on the contrary, an oath doth still remain religious, though conversant about civil matters.
“Thirdly, election and appointment of civil officers to see execution of those laws.
“Fourthly, civil punishments and rewards of transgressors and observers of these laws.
“Fifthly, taking up arms against the enemies of civil peace” (Ibid., pp. 212-213. See pp. 219-223 concerning the power of the magistrate in making laws.).
On the other hand, according to Mr. Williams,
“the means whereby a church may and should attain her ends, are only ecclesiastical, which are chiefly five. First, setting up that form of church government only of which Christ hath given them a pattern in his word.
“Secondly, acknowledging and admitting of no lawgiver in the church but Christ, and the publishing of his laws.
“Thirdly, electing and ordaining of such officers only as Christ hath appointed in his word.
“Fourthly, to receive into their fellowship them that are approved, and inflicting spiritual censures against them that offend.
“Fifthly, prayer and patience in suffering any evil from them that be without, who disturb their peace.
“So that magistrates, as magistrates, have no power of setting up the form of church government, electing church officers, punishing with church censures; but to see the church doth her duty herein. And on the other side, the churches, as churches, have no power, though as members of the commonweal they may have power, of erecting or altering forms of civil government, electing of civil officers, inflicting civil punishments—no, not on persons excommunicated—as by deposing magistrates from their civil authority, or withdrawing the hearts of the people against them, to their laws, no more than to discharge wives, or children, or servants, from due obedience to their husbands, parents, or masters: or by taking up arms against their magistrates, though they persecute them for conscience; for though members of churches, who are public officers, also of the civil state, may suppress by force the violence of usurpers, as Jehoiada did Athaliah, yet this they do not as members of the church, but as officers of the civil state” (Ibid., pp. 213-214).
 “But as the civil magistrate hath his charge of the bodies and goods of the subject: so have the spiritual officers, governors, and overseers of Christ’s city or kingdom, the charge of their souls, and soul safety. Hence that charge of Paul to Timothy, 1 Tim. v. 20, Them that sin rebuke before all, that others may learn to fear.This is, in the church of Christ, a spiritual means for the healing of a soul that hath sinned, or taken infection, and for the preventing of the infecting of others, that others may learn to fear, &c” (Ibid., p. 99).
“[F]or an erroneous and blind conscience, (even in fundamental and weighty points) it is not lawful to persecute any, til after admonition once or twice” (Williams and Underhill, p. 20).
“First then Titus, unto whom this epistle and these directions were written, and in him to all that succeed him in the like work of the gospel to the world’s end, was no minister of the civil state, armed with the majesty and terror of a material sword, who might for offenses against the civil state inflict punishments upon the bodies of men by imprisonments, whippings, fines, banishment, death. Titus was a minister of the gospel, or glad tidings, armed only with the spiritual sword of the word of God, and [with] such spiritual weapons as (yet) through God were mighty to the casting down of strongholds, yea, every high thought of the highest head and heart in the world, 2. Cor. x. 4.
“Therefore, these first and second admonitions were not civil or corporal punishments on men’s persons or purses, which courts of men may lawfully inflict upon malefactors; but they were the reprehensions, convictions, exhortations, and persuasions of the word of the eternal God, charged home to the conscience in the name and presence of the Lord Jesus, in the midst of the church. Which being despised and not hearkened to, in the last place follows rejection; which is not a cutting off by heading, hanging, burning, &c., or an expelling of the country and coasts; neither [of] which (no, nor any lesser civil punishment) Titus, nor the church at Crete, had any power to exercise. But it was that dreadful cutting off from that visible head and body, Christ Jesus and his church; that purging out of the old leaven from the lump of the saints; the putting away of the evil and wicked person from the holy land and commonwealth of God’s Israel, 1 Cor. v. [6, 7.] Where it is observable, that the same word used by Moses for putting a malefactor to death, in typical Israel, by sword, stoning, &c.,, Deut. xiii. 5, is here used by Paul for the spiritual killing, or cutting off by excommunication, 1 Cor. v. 13,Put away that evil person,&c.
“Now, I desire the answerer, and any, in the holy awe and fear of God, to consider that—
“From whom the first and second admonition was to proceed, from them also was the rejecting or casting out to proceed, as before. But not from the civil magistrate, to whom Paul writes not this epistle, and who also is not bound once and twice the admonish, but may speedily punish, as he sees cause, the persons or purses of delinquents against his civil state; but from Titus, the minister or angel of the church, and from the church with him, were these first and second admonitions to proceed.
“And therefore, at last also, this rejecting: which can be no other but a casting out, or excommunicating of him from their church society.
“Indeed, this rejecting is no other than that avoiding which Paul writes of to the church of Christ at Rome, Rom. xvi. 17; which avoiding, however woefully perverted by some to prove persecution, belonged to the governors of Christ’s church and kingdom in Rome, and not to the Roman emperor, for him to rid and avoid the world of them by bloody and cruel persecution” (, pp. 61-63).
This article presents a question on AVVO, a legal website, asked by person who practices homosexual conduct, and my answer. On September 14, 2014, I was notified that the question asker picked mine as the best answer. The following, before the article, is a copy of that notification:
The following question was asked on AVVO, a legal website on 090815:
“I am homosexual and my new pastor says that I have to turn straight to stay in my church. Can force me to it to be able to stay?
“I have gone to the same church for 11 years. I have never had a problem in my church even if I am openly gay and dress quite feminine. We have a new pastor since a year and he has tried to talk me into becoming straight since day one. Clearly, he is quite homophobic…. I have been able to laugh about if until now, but he is now trying to put pressure on my by the other pastors.
“They have never had a problem with me before. Suddenly they want me to dress differently and “become straight”.
“I am feeling harassed by my pastor and he even talked about me in church yesterday. It was clearly about me and I could feel the hostility.
“What can I do? Can I even try to do something legal against my pastor or is he protected by the law since he is God’s voice?”
My answer to the above question was as follows:
“Yours is not like the case in which the baker refused to do a wedding cake for homosexuals. That was a business. Your dispute is with a church. Businesses are not covered by the First Amendment whereas churches are. The First Amendment says:
“‘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.’
“I cannot fully answer your question in this forum, but I will give you an answer in a nutshell with additional resources for more detailed study.
“If your church is totally under the First Amendment (has not become a legal entity by incorporating, getting Internal Revenue Code Section 501c3 or Section 508 status, etc.), you have no legal recourse whatsoever against your church.
“On the other hand, should your church be a legal entity, she has voluntarily taken herself, for many purposes, out from under First Amendment protections. For example, your church may be held in violation of the rule which says that the 501c3 religious organization shall not violate fundamental public policy. This rule was set in place by the IRS and upheld by the United States Supreme Court as to a religious organization – a religious school named Bob Jones University. The issue involving a church has not been dealt with. What the court would do in the church religious organization setting is not certain. However, I believe that the court should enforce the “against public policy” exception as to any religious organization. After all, if a church has voluntarily agreed to 501c3 status, she has agreed, as do religious schools, charitable trusts, Planned Parenthood, the Church of Wicca, and other organizations, to abide by the rules that go along with the status. The religious organization is getting benefits, so she should be willing to abide by the give and take contract she eagerly sought. There are many arguments one can make to support upholding the rules for all 501c3 organizations, not just select organizations.
“I don’t have the room to cover all the arguments, the law, etc. in this short space. This is all covered in much detail on the website, opbcbibletrust.wordpress.com. A link to the PDF of the comprehensive book on these matters is at https://opbcbibletrust.wordpress.com/contents/boo…. One can go to the index and look up Bob Jones University, and many other specific issues, or the Table of Contents to get general subjects such as incorporation, 501c3, etc. The online version has updates and is at: https://opbcbibletrust.wordpress.com/contents/boo…. The online version does not have an index.
“The courts have not yet addressed the question of violation of fundamental public policy in the church (religious organization) context. As I said above, the courts have no jurisdiction over the purely spiritual church (the non-legal entity) church; such a church in America may still operate according to the principles in the Bible without civil government jurisdiction and persecution.
“You will need someone to help you who is well-versed in the law should you desire to proceed legally. The res
End – out of characters”
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?
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
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.
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:
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 yourconversation be without covetousness; and becontent 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 Applicationand Chapter 3 of Separation of Church and State: God’s Churches: Spiritual or Legal Entitiesfor 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).
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?
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?
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
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 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:
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.”
Christ 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.
The 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.
Second, 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 author, Baptist 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.
Another 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:
“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 asAMERICAN 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).
“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.
III. Distinctions between a church corporation holding property and a pastor/trustee holding property for the benefit of the Lord
A. First distinction
Incorporation 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.
The 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:
“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.
Who 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)).
The 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.
Timothy 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.
A 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
Fifth, 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:
“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
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
Seventh, 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
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
More 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.
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).
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?
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
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.
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:
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
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:
“§ 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 § 508. IRS 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.”
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.
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.
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.
From Separation of Church and State/God’s Churches: Spiritual or Legal Entities. Not in God Betrayed.
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 fifth false reason, one’s convictions. Other articles cover the other five reasons:
Spurious rationale for church corporate-501(c)(3) status: One’s convictions
Pastors, Christians, and churches give various “theological” reasons to excuse the incorporation and 501(c)(3) tax exemption of churches. The theologies of Catholic and Protestant churches have traditionally supported church-state union and therefore incorporation and 501(c)(3), although such churches have some problems with American incorporation and 501(c)(3) which give civil government considerable control over churches rather than giving the established church control over civil government (select articles from the categories at left for information on the control given civil government through incorporation and 501(c)(3)). In most cases, their objection to corporate 501(c)(3) status and the control such a position gives civil government over their churches does not prevent them from submitting and obtaining that status. The author explains the Catholic and Protestant theologies that support church establishment in God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (all books by Jerald Finney are also available free in both PDF and online form on this website; for information on ordering the paperback copies of the books see the “Books” page of the “Church and State Law“ website, or the “Order information page for books by Jerald Finney” page of this website); in the article “An Abridged History of the First Amendment“; in his radio broadcasts which are archived on the “Radio Broadcast” page of the ”Church and State Law” website; and in the audio teachings which are linked to on the “Blog” page of “Church and State Law” website. (Click the following link to preview God Betrayed: Link to preview of God Betrayed.))
Bible believing churches are not as sophisticated in their rationale for incorporating and getting 501(c)(3). Their rationale is anemic since biblical principle, without the perversions of Catholic and Protestant theologies, supports separation of church and state (not separation of God and state). One reason given by “Bible believing” churches, especially Baptist, is that the issue of whether to incorporate and/or get 501(c)(3) status is an important issue, but it is not the most important issue; therefore, they reason, if a church finds it impractical to discard or reject the corporate and/or 501(c)(3) status, then just go ahead with that status and do the best you can because the most important thing for believers and churches is winning souls. That reason is false, as the author explains in various resources: for example, (1) the booklet, The Most Important Thing: Loving God and/or Winning Souls (all books by Jerald Finney are also available free in both PDF and online form on this website; for information on ordering the paperback copies of the books see the “Books” page of the “Church and State Law“ website, or the “Order information page for books by Jerald Finney” page of this website); (2) the article, The Most Important Thing: Loving God and/or Winning Souls; and (3) audio teachings on The Most Important Thing: Loving God and/or Winning Souls, available on the “Radio Broadcast” page of “Church and State Law”.
Another reason given by some pastors and Christians of “Bible believing” churches for their decision to incorporate is that it is up to each individual church to decide the issue based upon “their convictions.” The author hears this excuse from pastors all the time. In this article, he addresses this rationale using an article written by Dr. Charles Brown as a springboard.
The question to be answered is: “Can one decide either to incorporate a church (or to continue as an incorporated church) or not to incorporate a church and still please God?” The proper place to begin is by defining “conviction” and “principle.” Relevant definitions of “conviction” are: (1) “a strong persuasion or belief;” (2) “the state of being convinced” (Merriam Webster’s Collegiate Dictionary (10th ed., 1995)). Principle may be defined as: “a comprehensive and fundamental law, doctrine, or assumption” (Ibid.). Of course, if a conviction is based upon biblical principles, that conviction is valid in the eyes of God. Cannot true followers of Christ agree that if one acts upon a conviction which is contrary to or not based upon principles in the Word of God, “sin lieth at the door?”
Dr. Charles Brown wrote an article, “To Incorporate or Not to Incorporate,” which was published in the April, 2008 issue of The Landmark Anchor. In that article, Dr. Brown explains why his conviction is that a church should incorporate. However, he also states in the article, “If a church has theological objections to becoming incorporated, then, by all means, do not incorporate.” In other words, according to that statement of Dr. Brown, since the Bible does not offer any comprehensive principles or doctrine controlling church corporate status one can safely choose either corporate or non-corporate status without violating biblical precept.
However, while making that statement, Dr. Brown also makes his case for church incorporation. Interestingly, he does not state any biblical principles concerning the organization, purpose, fate, or nature of churches to back up what he says. Rather, he bases his understanding upon “research and consultation with a law firm.”
He refers to the law in his article:
(1) He correctly states that a “corporation is a legal status that enables a group joined together for a stated reason … to act as if it is a person. That ‘legal person’ may own property, conduct business, and otherwise carry out its purpose.” A New Testament and First Amendment church (hereinafter referred to as a “First Amendment church”) may not own property, or conduct business (as the word is used in America). A First Amendment church cannot also be a “business.” However, a First Amendment church may utilize property in American in a manner consistent with biblical principles; and, unlike the state incorporated church, she may carry out her purpose within the letter of civil law while still pleasing her Lord. The incorporated church has a “form of godliness, but denies the power thereof.”
Note. The First Amendment to the United States Constitution is the implementation of the biblical principle of separation of church and state (not separation of God and State). This is fully explained in the book God Betrayed which, as explained above, is available on this website in both PDF and online form and can be ordered in paperback form.
(2) Dr. Brown then asserts that “Usually a church incorporates to limit its liability.” His statement is true as to a false reason given for incorporation of a church. It is not true that a state incorporated “church” and its members has more protection from liability than a First Amendment church and her members. Again, I explain this in Section VI, Chapter 6 of God Betrayed, in audio teachings available on the “Blog” and “Radio Broadcast” pages of “Church and State Law,” and in the article “Church Incorporation Increases Liability of Church Members.”
(3) Dr. Brown states, “An unincorporated church is owned by individuals. Each share in the liability of the property and all things done in the name of that church. In a church split, the assets of the church may be claimed by either side and lawsuits could erupt, because each member owns the church.” (This is a direct accurate quote from his article.).
His assertions are totally wrong as to a First Amendment church, but correct as to the incorporated church. A First Amendment church, a spiritual entity only, is owned by the Lord Jesus Christ only. A First Amendment church owns no property, although there are many legal means in America for such a church to utilize property without owning property. Perhaps Dr. Brown should reread the Bible, and especially I Corinthians Chapter 6 in regard to lawsuits by church members. All the legal problems occurring within churches are in incorporated churches – to understand this, just make use of Google.
In fact, the incorporated church creates several contracts when it incorporates – contracts between the state and the corporation, between the corporation and the members, between the members themselves, and between the members and the state. The controlling party to all these contracts is the state, and the state will decide disputes based upon secular, not Biblical, law. Try appealing to the Bible when you get into such a dispute. The sovereign of the corporation will quickly explain your error and hold you in contempt if you do not abandon your appeal to God’s principles.
(4) He also asserts: “The United States Constitution guarantees freedom of religion and freedom of speech. Churches fit in those categories. Anything the state might choose to do (prosecute, regulate, etc.) to a church, they may do regardless if the church is incorporated or not.”
The author explains in detail why this is a totally ridiculous and false statement in various resources. A man who make such a statement is speaking outside his field of expertise.
(5) Dr. Brown proclaims: “[A] church is not state licensed because it is incorporated. A license is a recognition from a responsible authority to conduct an activity that would be illegal to conduct without that license. No church needs to be licensed to be a church. An unincorporated church may legally do the same activities that one that is incorporated.”
That statement by Dr. Brown is a jumbled mess. First, who is a “responsible authority?” Perhaps he is referring to a civil government. What if the civil government which requires a license is not a responsible authority? A First Amendment church which is not a legal entity such as a corporation cannot get a license. A corporate church, since she is a legal entity, can get a license. The author explains that in his resources.
Second, individual believers can choose to get such a license and thereby displease our Lord. One notable Christian who chose not to get a license was John Bunyan. One can read a portion of his trial transcript in the article, “An Abridged History of the First Amendment.” If you read the article, you will find out the reasons a Christian should not get a license for preaching, holding church meetings, and for certain other spiritual activities.
Third, although licensure and incorporation are not the same, they both violate the biblical doctrine of the church.
Fourth, an incorporated church cannot do everything that a First Amendment church, which is not a legal entity in any way, can do.
Furthermore, the corporate church is organized according the law of her sovereign state (the law makes clear that the sovereign of the corporation, including the non-profit religious organization – the correct name for an incorporated “church” – is the state of incorporation). One can find out exactly what non-profit incorporation is in my books, articles, and audio teachings available from “Church and State Law” and “Separation of Church and State Law” blog.
Finally, the nature of a corporate church is entirely different from that of a First Amendment church in many respects. The corporate church has given up much of her Constitutional protections. She falls under the Fourteenth Amendment as opposed to the First Amendment as to many matters. She has also grieved our Lord since she has placed herself at least partially under another head.
(6) He goes on to say that “Incorporated churches are not ‘state run churches.’ Incorporated churches do not have to report to the state what they preach, how much money is spent, how they run their affairs, or who tithes. They do have to give the state an application typically containing: name and address of the church, purpose of the organization, manner of election of ‘officers,’ the name and address of the initial registered agent (usually the Pastor), and three names and addresses of the incorporators (usually trustees or deacons). The church ought to have a constitution and bylaws but they are for the internal working of the church and the state will not review them, nor want them.”
Dr. Brown does give a few isolated facts about incorporation, but he does not examine the law involved in any depth. He does not mention the biblical principles for a church and compare those principles to the facts and law concerning incorporation. He, for example, fails to mention that the “sovereign of the corporation is the state,” that the corporation is a creature of the state, that the corporation must follow the rules that are given her by her sovereign, that the corporation must be structured according to the organizational rules laid down by the sovereign state, etc. The author explains exactly the law of the non-profit corporation in books, articles, and audio teachings.
(7) Finally, Dr. Brown mentions the court case, Hale v. Hinkle, a Supreme Court decision. His analysis is flawed. See the article linked to in the next paragraph for my comments on this.
In “To Incorporate of Not to Incorporate: Attorney Jerald Finney Answers Dr. Charles Brown, Executive VP of Landmark Baptist College,” (as a reminder, you can left click the preceding link to go directly to that article; however, the website was hijacked and all the issues of the magazine from which the article was taken, “The Trumpet,” have as of this date – September 4, 2013, to have been restored) an article published in the July-September issue of The Trumpet, the author rebuts to Dr. Brown’s article. That article, which was originally entitled “Responses to Arguments that Biblical Principles Do Not Clearly Warn Against Incorporation of Churches” addresses Dr. Brown’s article in more detail than does this brief article.
All Jerald Finney’s resources comprehensively deal with the issue of separation of church and state. Involved in the issue is the issue of whether incorporation and 501(c)(3), or becoming a legal entity in any way) violates principles in the Word of God and therefore grieves our Lord and ultimately results in bad consequences. When one applies the law and facts to biblical principles, he sees that it is very clear that incorporation and 501(c)(3), etc. of churches are “iniquities” and grieve our Lord.
The church who is serious about her relationship with the Lord Jesus Christ may be ignorant about the biblical doctrines of church, state, and separation of church and state. Sooner or later, she will suffer consequences as will the individuals and families in that church. However, the willfully ignorant church or the church which continues in presumptuous sin, her individual members, and the families within her church family are in greater danger (see, e.g., 2 Peter 1 and Hosea 4).
Responses to Arguments that Biblical Principles Do Not Clearly Warn Against Incorporation of Churches
By Jerald Finney
Lead Counsel for the Biblical Law Center
Dr. Charles Brown recently wrote an article entitled “To Incorporate or Not to Incorporate” which was published in the April, 2008 edition of The Landmark Anchor. In that article, he brought out important issues which, from a biblical perspective, are preeminent for a New Testament church. This article briefly answers some of the common assertions of various Christians which are reflected in Dr. Brown’s article.
I recently completed a book called God Betrayed/Separation of Church and State: The Biblical Principles and the American Application. In that 453 page book I thoroughly addressed all the issues Dr. Brown raises and more. I want to encourage every Bible believer to get this book and study it. In the above mentioned article, Dr. Brown does not get into United States Code § 501(c)(3) (“501(c)(3)”) tax-exempt status for a church. Since almost all churches which incorporate also get 501(c)(3) status, such status should be considered in conjunction with the issue of incorporation of churches; but since Dr. Brown did not include the issue in his article, I will not address the issue herein. God Betrayed examines the issue of 501(c)(3) tax-exemption of churches.
It is impossible to do this subject justice in a short article, but I will attempt to shed some light on the issues he raised as succinctly as possible.
Dr. Brown stated: “A church does not have to be incorporated to be a real church.” My reply to that statement follows:
What is a real church? The New Testament gives the answer to that question. The revelation of the mystery of the church, which was foretold, but not explained by Christ in Matthew 16.18, was committed to Paul. In his writings alone we find the doctrine, position, walk, and destiny of the church. God Betrayed delves into the biblical doctrines concerning the church.
New Testament churches never submitted themselves to the state in any way. In fact, the apostles were careful not to render to Caesar the things that were God’s. They were jealous of God’s churches. Paul said to the church, “For I am jealous over you with godly jealousy: for I have espoused you to one husband, that I may present you as a chaste virgin to Christ. But I fear, lest by any means, as the serpent beguiled Eve through his subtilty, so your minds should be corrupted from the simplicity that is in Christ (II Cor. 11.2-3).”
Is a corrupted church a real church? What if the leaders of a church reject knowledge and succumb to Satan’s seductions? In other words, what if those leaders are willfully ignorant (see Hosea 4)? Individuals have a responsibility after being saved—they are to add to their faith virtue, to virtue knowledge, to knowledge temperance, to temperance patience, and to patience godliness, to godliness brotherly kindness, and to brotherly kindness charity (II Pe. 1.4-7). They are to engage in spiritual warfare using spiritual weapons which constitute the whole “armour of God” (Ep. 6.10-18). Included in that “armour” is having one’s loins girt about with truth (Ep. 6.14).
A New Testament church is a spiritual entity only. Doing anything in America which subjects a church to the civil government in any way renders that church a “legal entity.” A “legal entity” is “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 (6th Ed., 1990), definition of ‘Legal Entity’).”
God desires that Christ be the only head over His churches (Ep. 1.22, 23; 2.22; 5.23-24; Col. 1.15-18).
The church is analogized to a husband and bridegroom of the church (Jn. 3.28, 29; Ro. 7.4; II Co. 11.1-4; Ep. 5.23-33; Re. 19.6-8).
Dr. Brown stated: “The United States [C]onstitution guarantees its citizens freedom of religion and freedom of speech. Churches fit in those categories.” My response:
The First Amendment to the United States Constitution guarantees freedom of religion, speech, press, assembly, and the right to “petition the Government for a redress of grievances.” In the religion clause, churches are guaranteed freedom from government control. The words and history of the Amendment make this clear. Section VI of God Betrayed gives an unrevised account of the history of the First Amendment.
The words of the religion clause state, “Congress shall make no law respecting an establishment or religion, or prohibiting the free exercise thereof.” Thus, the First Amendment allows a church to remain under God only without persecution, or to repent if they incorporated, gained 501(c)(3) status, or made ithemselves a legal entity in any way. The Biblical Law Center has already helped many churches to return to New Testament church status and is there to help other churches who wish to please God and return to New Testament church status. The freedom guaranteed a church by the First Amendment can be enjoyed within the parameters of the laws of the states and of the United States. The United States Supreme Court still recognizes that the state cannot interfere with a New Testament Church. Of course, there may be rogue governmental agencies and courts that may ignore these protections; but if a New Testament church makes sure to close all doors to being classified as a legal entity, there is no avenue for suit or attack against that church.
Dr. Brown stated: “Anything the state might choose to do (prosecute, regulate, etc.) to a church, they may do regardless if the church is incorporated or not.”
This statement not only contradicts what Dr. Brown said in his previous two sentences, it also is simply not true. A New Testament church cannot be prosecuted. It is not a legal entity. An individual within a New Testament church may be prosecuted for crimes or sued for torts allegedly committed, whether as principal or party. However, a New Testament church is not a legal entity as is an incorporated 501(c)(3) church; and, therefore, she cannot sue, be sued, or be charged with a crime. Only a member or members who allegedly committed a crime or tort can be charged with a crime or sued under the laws of a civil government.
The First Amendment guarantees that a New Testament church cannot be prosecuted, regulated, etc.
Dr. Brown’s statements concerning incorporation which follow his last mentioned statement are jumbled and very misleading. He is correct to say that incorporation “is a legal status that enables a group joined together for a stated reason (business, church, club, etc.) to act as if it was a person. That ‘legal person’ may own property, conduct business, and otherwise carry out its purpose.” As I stated above, a corporation is a legal entity. However, Dr. Brown’s description is incomplete. As pointed out in much more detail and with legal citations given in God Betrayed, civil law makes clear that:
“A corporation is an artificial being, invisible, intangible and existing only in the contemplation of law. As a mere creature of law, it possesses only those properties which the charter of its creation confers upon it. A corporation is not a natural person but rather an artificial person, that is, a legal fiction or a creature of statute (18 AM. JUR. 2D Corporations § 1 (2007)).”
The sovereign of the corporation is the state that creates it. “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…. 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 (18A AM. JUR. 2D Corporations § 156 (2007)).”
A corporation is defined as “An artificial person or legal entity created by or under the authority of the laws of the state.” (BLACK’S LAW DICTIONARY 340 (6th Ed. 1990), under definition of “Corporation,” citing Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819)).”
Early in our national history, the United States Supreme Court solidified already existing precedent—in a case involving a religious institution of higher learning and which influenced many churches to incorporate—concerning the attributes of incorporation which are applied to churches (Dartmouth College). In that same case, the Supreme Court defined the differences between public and private corporations. Public corporations are not voluntary associations and there is no contractual relation between the government and the individuals who compose the corporation as there is with the private corporation (such as railroad companies, banks, insurance companies, charities, churches, religious organizations, etc.); a corporation which does not possess governmental powers or functions is a private corporation (Ibid.).
Dr. Brown states that “[a]n unincorporated church is owned by individuals.”
If an unincorporated church is not a legal entity (incorporating and getting 501(c)(3) status are not the only ways to become legal entities), it is a New Testament church and the church is owned by the Lord Jesus Christ who said, “And I say also unto thee, 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).” A New Testament church remains a spiritual entity only and owns no property. God Betrayed explains how an American church can assemble on property without owning it, etc.
Dr. Brown asserts that churches usually incorporate to limit liability.
However, in addition to limited liability, other reasons for incorporating are given by members of “churches:” incorporating protects their personal assets (1) from liability for the debts of the corporation, (2) from the torts and criminal acts of the corporation, and (3) from liability on contracts entered into by the corporation. Although such arguments are partially correct, they are misleading. These arguments are spurious for several reasons which are more thoroughly discussed in God Betrayed. The corporate veil can be pierced. Limited liability is not absolute as is explained in God Betrayed. Also, biblical principle is against a church going into debt; and if she does go into debt, not only does the Word of God teach that God expects her to honor her debts; but also that church has become a legal entity because she can be sued if she defaults on her debts and she can sue if the other party to the debt defaults on her agreements surrounding the indebtedness. As to torts and criminal acts, only visible members of a New Testament church can commit such acts. A New Testament church cannot commit a tort or a crime. Thus, only people (members), not a New Testament church (a spiritual entity only and not a legal entity), can be charged with a tort or crime to which they have allegedly either been principal or party. As to contracts, a New Testament church (a spiritual entity) has no need to and cannot enter into contracts. One can get around these principles only by means of human reasoning which are contrary to God’s principles.
Dr. Brown asks the question, “Is becoming an incorporated church the same as being a state licensed church?”
This question is a diversionary tactic. Of course the two are not the same; but, according to biblical principles, to license a church is a wicked act, and to incorporate a church is a wicked act. I have already pointed out many of the reasons why incorporation is wrong. God Betrayed gives other reasons and is much more detailed.
Dr. Brown then asks, “What about theological objections to incorporation?”He recommends not incorporating if one has theological objections.
The Word of God does not leave such an important issue up for grabs, and God expects His children to seek out and apply the principles He has laid down. God Betrayed is theological. Unlike most lawyers, including many or most of those who call themselves Christian, the foundation for all that I believe, as stated in God Betrayed, is biblical. My authority is not Supreme Court cases or civil laws. In God Betrayed, I first go to the Bible and explain the biblical principles of government, church, and separation of church and state. Then I examine history, Supreme Court decisions, and civil law (specifically incorporation, 501(c)(3), and other related laws as regards churches) in light of biblical principle. My main message is to New Testament churches, churches who want to be New Testament churches in obedience to biblical principle due to love for God, and to any other churches or Christians who want to know truth concerning these vital issues.
The real question should be, “What does the Bible teach about incorporation?” God Betrayed explains the biblical principles concerning incorporation (and 501(c)(3) tax-exempt status) for churches and the consequences for violating those principles. God teaches that a church which incorporates has committed a wicked act. That church may continue to operate within God’s permissive will, but as with the nation Israel, the only true theocracy which has ever existed, when she rejected God as ruler (and God permitted Israel to reject Him), once a church dishonors her relationship with the Lord Jesus Christ, that church is on a slippery slope down. The end result will be spiritual apostasy, moral awfulness, and political tyranny. As the Bible teaches, the only remedy for apostasy is judgment.
Dr. Brown states that the Christian Law Association (“CLA”) has some excellent printed material that explains these issues simply and thoroughly.
I disagree. Although simplistic, CLA explanations on the issue of incorporation (and 501(c)(3) status) of churches are wrong according to biblical principles. As a Christian, I contributed to the CLA for a few years and respected much of what they did, as I still do concerning some of their work. Then I was called by God to become a lawyer. A few years ago, I began an intense study of the Bible, history, and the law concerning the issue of separation of church and state. I discovered that CLA founds what it believes on man’s statutory and case law, interprets the Bible according to man’s statutory and case law, revises history, and disseminates myths about the issue of separation of church and state (which involves the issues of incorporation and 501(c)(3) tax-exempt status for churches). In fact, David Gibbs of the CLA once taught biblical principles concerning these issues but was persuaded by powerful pastors who had decided that they were going to seek incorporation and 501(c)(3) status that he should go with them on the issue. According to some sources, these pastors told him that if he did so they would establish his legal practice. It is irrefutable that after Attorney Gibbs switched his position, his earthly power and influence were multiplied many times over and the CLA began to thrive materially as an earthly entity with the financial support of thousands of churches and believers. Perhaps he felt that he should go with them to help and protect them, just as Jeremiah went with some of the Jews to Egypt against God’s warning. However, Jeremiah still spoke total truth as given him by God.
Dr. Brown then states that “Incorporated churches are not ‘state run churches.’”
In fact, incorporated churches, as fully explained in God Betrayed, are two-headed monsters. “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 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)).”
An incorporated 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 some spiritual matters. Part of the church must have elected officers who conduct business meetings, meet statutory requirements, etc.
This bifurcation of a church has other consequences. As has been shown, the state is sovereign of the incorporated part of a church. “Sovereign” means: possessed of supreme power or unlimited in extent: ABSOLUTE (BLACK’S LAW DICTIONARY (6th Ed., 1990), definition of “sovereign”). Incorporation of churches creates contracts between the state and the corporation, the state and the members of the corporation, between the members themselves, and between the members and the corporation. Contract (agreement between two or more parties) is not biblical. The Bible teaches that the proper way to agree with another or others is through biblical covenant (covenant between two or more people and God). The contracts created by incorporation entangle the incorporated church with earthly satanic concerns, solutions, and procedures. Furthermore, the statutory requirements as to the form and content of the articles or certificates of incorporation must be substantially followed. As sovereign, the state has ultimate authority in interpreting the articles of incorporation as well as the various contracts involved in incorporation should disputes be taken to court. By incorporating, a church gives up much of its First Amendment protection. It must, for example, keep records and make those records available to the state, on demand. Only a church which is not satisfied with the freedom and provisions afforded the church by God (which are, by the way, implemented by the First Amendment) seeks incorporation.
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 which 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 that is partly under God and partly under Satan? That church has fallen for Satan’s 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))”
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. 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; and the compromising church gives up at least a portion of the power of God.
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 that is already incorporated, he will do all he can to shed the 501(c)(3) and/or corporate status of that church.
Dr. Brown then refers to Hale v. Hinkle.
He is partially right about his observations concerning that case. Although God Betrayed very briefly mentions Hale v. Hinkle, 201 U.S. 43 (1906), the case could be eliminated from the book without compromising any assertions in the book. Dr. Brown is correct when he states that the case did not deal with a church. He says that “this ruling had nothing to do with a church and does not mean that a church is a state run entity.” This statement is only partially true in that a church was not involved in the case. However, Hale v. Hinkle presents general incorporation law, and the principles in the case are applied to the issue of church incorporation. For example, an incorporated church does give up some of its constitutional protections such as its First Amendment Rights while retaining only due process and equal protection rights just as the corporate officer in Hale v. Hinkle gave up Constitutional rights, as Dr. Brown mentions in his article.
Dr. Brown closes his article by saying he has “no particular advice to offer for a church to get or refuse to get incorporated.”
In effect, Dr. Brown is stating that God does not care what a church does concerning incorporation since, as he puts it, “It is an issue to decide for themselves.” In other words, according to Dr. Brown, the Bible can be read to both support and condemn incorporation. However, when one opens the Word of God, one opens the mind and heart of God concerning this issue as well as many others.
Loving God is preeminent for a believer and for a church. One does not love God by just asserting that he loves God. Jesus said, “If ye love me, keep my commandments (John 14.15).” The greatest commandment is to love the Lord with all one’s heart, soul, mind, and strength (Mt. 22.37; Mk. 12.30; Lk. 10.27).
Love is action. This love which Christ has for His church and which he desires His church to show Him is seen in the Song of Solomon which is primarily an expression of pure marital love, and secondarily of Christ and His heavenly bride, the church. Song of Solomon 8.7 says, “Many waters cannot quench love, neither can the floods drown it: if a man would give all the substance of his house for love, it would be utterly contemned.” “Contemned” means “despised, scorned, slighted, neglected, or rejected with disdain (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828), definition of “CONTEMNED.”).” God despises, scorns, slights, neglects, or rejects with disdain all that a church does, whatever professions of love she makes, if those acts and/or professions are without love. A church that does not honor Christ as a wife is to honor her husband, her bridegroom, by remaining chaste, does not display love for the Lord. Thus, loving ones neighbor by witnessing to him, sending missionaries to him, leading him to the Lord, or helping him materially or any other way in obedience to the second commandment—“Thou shalt love thy neighbor as thyself”—is vanity in God’s eyes if one ignores the greatest commandment. Souls will still be saved because of the grace of God, but not as many, especially in the long run, as would be saved had the churches displayed love for their bridegroom, husband, and head.
This fact is also articulated in the New Testament. The Lord Jesus is jealous over His churches. If we do not love the Lord Jesus, He despises all the “Christian” work we do and the money we put in the offering plate:
“Though I speak with the tongues of men and of angels, and have not charity, I am become as sounding brass, or a tinkling cymbal. And though I have the gift of prophecy, and understand all mysteries, and all knowledge; and though I have all faith, so that I could remove mountains, and have not charity, I am nothing. And though I bestow all my goods to feed the poor, and though I give my body to be burned, and have not charity, it profiteth me nothing (I Co. 13.1-3).”
“In a theological sense, [‘charity’] “includes supreme love to God and a universal good will to men. 1 Cor. xiii. Col. iii. 1 Tim. I (AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828), definition of “CHARITY.”).” Love is an act of the will. A church refutes its proclamations of love for the Lord when it wholly or partially takes the church from under the headship of her Husband, the Lord Jesus Christ.
Love “[r]ejoiceth not in iniquity, but rejoiceth in the truth (I Co. 13.6).” Iniquity means “Injustice, unrighteousness, … [w]ant of rectitude [rightness in principle or practice], … a sin or crime; wickedness (Ibid., definitions of “INIQUITY” and “RECTITUDE.”)….” Bible truth makes clear that the love of Christ for His church is immense, that He wants to be the only Head and companion of the church which is likened to His wife and bride, and that for a church to even partially put herself under or associate with another entity is a great wickedness and repudiates all professions of love for the Lord. As shown in Section VI of God Betrayed, the church that secures a 501(c)(3) tax-exemption and/or incorporates puts herself partially under another head, commits a wicked sinful act in violation of biblical principle, rejoices in iniquity, and refutes its professions of love for the Lord.
The Lord Jesus gave a warning to the church at Ephesus:
“I know thy works, and thy labour, and thy patience, and how thou canst not bear them which are evil: and thou hast tried them which say they are apostles, and are not, and hast found them liars: And hast borne, and hast patience, and for my name’s sake hast laboured, and hast not fainted. Nevertheless, I have somewhat against thee, because thou hast left thy first love. Remember therefore from whence thou art fallen, and repent, and do the first works; or else I will come unto thee quickly, and will remove thy candlestick out of his place, except thou repent (Re. 2.2-5).”
As Dr. J. Vernon McGee teaches us, this warning was for every church that has lost her love for the Lord Jesus:
“It was a warning of danger of getting away from a personal and loving relationship with Jesus Christ. The real test of any believer, especially those who are attempting to serve Him, is not your little method or mode or system, or your dedication, or any of the things that are so often emphasized today. The one question is: Do you love Him? Do you love the Lord Jesus? When you love Him, you will be in a right relationship with Him, but when you begin to depart from the person of Christ, it will finally lead to lukewarmness. The apostate church was guilty of lukewarmness. It may not seem to be too bad, but it is the worst condition that anyone can be in. A great preacher in upper New York state said: ‘Twenty lukewarm Christians hurt the cause of Christ more than one blatant atheist.’ A lukewarm church is a disgrace to Christ (J. Vernon McGee, Revelation, Volume I (Pasadena, California: Thru the Bible Books, 1982), pp. 121-122).”
As the Lord Jesus Christ is jealous over His churches, so should pastors and church members be jealous, with a godly jealousy, over the church they belong to, just as Paul was:
“For I am jealous over you with godly jealousy: for I have espoused you to one husband, that I may present you as a chaste virgin to Christ. But I fear, lest by any means, as the serpent beguiled Eve through his subtilty, so your minds should be corrupted from the simplicity that is in Christ. For if he that cometh preacheth another Jesus, whom we have not preached, or if ye receive another spirit, which ye have not received or another gospel, which ye have not accepted, ye might well bear with him (II Co. 11.2-4; Lk. 18.8; II Ti. 3.1-8).”
The church that really loves her Husband, the Lord Jesus Christ, will seek to maintain her purity, to be subject to her Husband in all things whether that church is persecuted or not. All the professions of love, all the good deeds, the hymns sung, and the messages preached by a church which does not totally submit herself in all things to her Husband, are contemned by the Lord. A church that takes a 501(c)(3) tax exemption, an incorporation, a license, or any type permit from the state, or puts herself under the state in any way, becomes an earthly legal entity subject to the jurisdiction of an earthly power, the civil government. Such a “church” is in fact a two headed monster. In spite of her emotions and professions of love for the Lord, according to her acts she shows, based upon God’s definition of love in the Bible, that she does not love the Lord Jesus Christ.
Churches under Christ Ministry of Charity Baptist Tabernacle of Amarillo, Texas. A Christian Lawyer explains how a church in America can remain under the Lord Jesus Christ and Him only. "And hath put all things under his feet, and gave him to be the head over all things to the church" (Ephesians 1.22).