Tag Archives: Internal Revenue Code § 508

What is 508?


A Publication of Churches Under Christ Ministry


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Jerald Finney
Copyright © December 8, 2017


126 United States Code § 508, also referred to as Internal Revenue Code § 508, is a law which was enacted by Congress and signed by the President.

Some churches rely on this law rather than another law, § 501(c)(3) of the Internal Revenue Code, to establish tax exempt status.

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

508 churches are subject to the same rules which 501c3 churches are subject to.En1 and En2


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


Endnotes


En1 See Should a Church Be a 508 Church?

En2 See What is 501c3?

Should a Church be a 508 church?


A Publication of Churches Under Christ Ministry


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Jerald Finney
Copyright © November 30, 2017


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

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

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

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

Permit me to explain:

  1. The First Amendment is a statement of the biblical principle of separation of church and state . When a church relies on the First Amendment, they are relying on a biblical principle. Should the biblical principle be abused or ignored by the civil government, so be it—a church should then rely and act only on the biblical principle. See En3 for links to resources which explain the First Amendment.
  2. To rely on 508 (or 501c3, of course) contradicts the First Amendment. The First Amendment religion clause states: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

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

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

For a more thorough explanation see Church Internal Revenue Code § 508 Tax Exempt Status.


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


Endnotes

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

En2 Does God Care if our Church is Incorporated?

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

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

Will Churches in America Have a Choice about Sodomite Marriage: A short critique of the article “Christian schools will have no choice about gay marriage: Column” as it relates to churches

Michael Farris
Michael Farris

Equality Act Creates LGBT Rights Everywhere! (102315)(Revealed: LGBT Nuclear Bomb Against Churches – Will apply to state churches, such as incorporated 501c3 churches, only. The article  below explains how this applies to state churches, but not to New Testament churches.)

Jerald Finney
Copyright © May 23, 2015

A new article was just posted:

The article, “Christian schools will have no choice about gay marriage: Column,” again puts the ignorance of “Christians” on display. The author of the article, Michael Farris, laments the fact that the United States Supreme Court is posed to deny 501(c)(3) status to Christian colleges and even to churches which oppose same-sex “marriage” (Actually, any union outside that of a male and a female is not marriage. See Jerald Finney’s letter on the webpage “The Sodomite Agenda, Religious Organizations, And Government Tyranny.”). I limit this reply to that article to churches only, even though I could say much about so-called “Christian” schools and institutions of higher learning.

6The author of the article, Michael Farris, is a good lawyer who has done much for the cause of homeschooling in America; but his article reveals that he, like most American “Christians,”  has no clue as to the important Bible doctrines of church, state, and separation of church and state and their application in America (See the first three sections of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application which is available free in both online and PDF form. The first three sections of the online version are updated. One may study the website Separation of Church and State Law for articles, books and other resources concerning the issue of church organization.). Nor does he understand church incorporation law or Internal Revenue Code section 501(c)(3) as applied to churches. He therefore does not understand that churches who incorporate, get 501(c)(3) status, or become legal entities in any way have grieved our Lord by combining church and state (See section VI of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application). Believers should have realized this long ago and should have shunned any type combination with the state. When a church in America incorporates and/or claims either 501(c)(3) or 508 status, she has subjected herself to a head other than the Lord Jesus Christ. That is a gross violation of New Testament church doctrine. For more understanding of Internal Revenue Code Section 508 status see Church Internal Revenue Code § 508 Tax Exempt Status.

In the article, Farris states:

“Christian colleges and churches need to get prepared. We must decide which is more important to us — our tax exemption or our religious convictions. Keep in mind, it is not the idea that the college itself might have to pay taxes that is the threat. Schools like Patrick Henry College, which I started, never run much of a profit. But since PHC refuses all government aid, all of our donations for scholarships and buildings come from tax deductible gifts. Cutting off that stream of revenue is effectively the end of such colleges absent a team of donors who simply don’t care if gifts are deductible.”

Had the convictions of churches in America concerning the relationship of church and state been based upon Bible principles instead of misguided “convictions,” no church in America would have ever incorporated, applied for 501(c)(3) status or become a legal entity in any way; they would have all maintained their First Amendment status thereby remaining under God only. By the way, the First Amendment implements into the highest law of the land the principle of separation of church and state (See The History of the First Amendment or An Abridged History of the First Amendment; See also, The Trail of Blood of the Martyrs of Jesus which explains not only the history of the First Amendment but also Christian and Secular revisonist history.)

Mr. Farris’ article points out something that I have pointed out for many years. He states:

“Keep in mind, it is not the idea that the college itself might have to pay taxes that is the threat. Schools like Patrick Henry College, which I started, never run much of a profit. But since PHC refuses all government aid, all of our donations for scholarships and buildings come from tax deductible gifts. Cutting off that stream of revenue is effectively the end of such colleges absent a team of donors who simply don’t care if gifts are deductible.”

5

One will find on the Partrick Henry College website the following statement:

Patrick Henry College is a not-for-profit corporation created and authorized to operate under the laws of the Commonwealth of Virginia. Under Section 501(c)(3) of the Internal Revenue Code, the College is a qualified charitable institution and contributions to PHC are tax deductible to the full extent of the law.

Patrick Henry College, like incorporated churches, is a creature of the state. The state of Virginia created the corporation and authorizes her to operate under the laws of Virginia, not under the laws of God. PHC is further controlled by the federal government by the rules that go along with 501(c)(3) status. More rules can be added as shown in Bob Jones University, 461 U.S. 574; 103 S. Ct. 2017; 76 L. Ed. 2d 157; 1983 U.S. LEXIS 36; 51 U.S.L.W. 4593; 83-1 U.S. Tax Cas. (CCH) P9366; 52 A.F.T.R.2d (RIA) 5001 (1983)(See pp. 386-388 of God Betrayed for an analysis of Bob Jones University). The college has turned to the state of Virginia and the federal government, specifically the Internal Revenue Service, for aid. The aid comes in the form of gifts given by donars who claim tax deductions for their gifts. People give for a tax deduction, not for the glory of God. In return for state aid, the non-profit 501(c)(3) organization agrees to abide by the rule (and future rules) set unilaterally by their benefactor. Therefore, the statement that Patrick Henry College refuses all government aid is patently false. Churches who become non-profit corporate religious organizations and/or claim 501(c)(3) status have turned to state and the federal government for financial aid.

Churches who are not non-profit 501(c)(3) religious organizations are not concerned about being taxed because they are non-taxable if they are correctly organized as spiritual entities only and had as their goal the glory of God. Furthermore, the First Amendment protects the non-legal status of New Testament  churches. The First Amendment states:

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

Those churches and religious organizations who become legal entities place themselves under the Fourteenth Amendment for many purposes. The First Amendment guarantees that no church has to incorporate or place themselves under the rules of 501(c)(3). One big change for a church who takes 501(c)(3) or 508 status is that the church becomes “tax exempt” as opposed to non-taxable; they place themselves under Internal Revenue Code Sections 501(c)(3) or 508, laws made by Congress (notice that the First Amendment says “Congress shall make no law respecting….”) and signed by the President. Before they do that, if they are not some type of legal entity such as a non-profit corporation, they are wholly protected by the First Amendment and are free to exercise their “religion” in conformity to New Testament principles.

Churches can make no profit if operated according to the principles of the New Testament. Without profit there are no taxes anyway. Even a business (something entirely different from a New Testament church but very like most American state churches) pays no taxes if it makes no profit. It is interesting that most American churches today are run like businesses, not like New Testament churches. That was another inevitable result of ordering a church according to the precepts of man, not those of God. Most are glorified social clubs or nightclubs. They are really businesses which pay no taxes because they call themselves churches and organize under state non-profit incorporation law.

What churches which become legal entities are really concerned about, since there is no need to worry about being taxed, is maximizing donations. They believed, after section 501(c)(3) was added to the Internal Revenue Code, that they would get more donations from people who were more concerned about getting a tax deduction than they were about glorifying God by honoring His precepts, from those whose motivation for giving was American “practicality” and not God’s pleasure. You see, God’s precepts often do not seem practical to most American believers. Churches cannot afford to operate the way they want without bringing in huge amounts of money and they cannot bring in that type of money through the tithes and offerings of born-again believers each of whom loves the Lord with all their heart, soul, mind, and strength because most of their members do not fit that description and would not tolerate teaching, preaching, and practice of all Bible doctrines. I explain all this and more in God Betrayed/Separation of Church and State: The Biblical Principles and the American Application and in other articles and teachings on the Separation of Church and State Law website-see Section VI of God Betrayed for a thorough study of the relevant law.

The inevitable results of  proceeding without biblical knowledge, understanding, and wisdom are now coming to fruition, and the vast majority of American “Christians” are in panic mode. They fear man more than they fear God. It is a good thing for them to be in panic mode. Maybe some of them will, as a last resort, wake up and study the word of God, repent, and reorder their churches.

The June 2010 article Preaching on Sodomy in a Hate Crime Atmosphere explained what a both state churches (a church organized as a legal entity) and New Testament churches must do when they take issue with the civil government.

Endnote

I must mention that I believe that God has preserved his word in English. Since all English versions differ, and since there can only be one word of God, which English version is God’s word? One must answer this question or he has no Bible and no authority.

See the Separation of Church and State Law website and the newly launched website abibletrust.com for help with New Testament church organization.

For more information on incorporation of church see:

  1. Church corporate 501(c)(3) status: Union of church and state
  2. Corporation: A human being without a soul

To learn more about the church 501(c)(3) education control scheme specifically see:

  1. Federal government control of churches through 501(c)(3) tax exemption (Section VI, Chapter 4 of God Betrayed; Chapter 4 of Separation of Church and State)
  2. The church incorporation-501(c)(3) control scheme (Section VI, Chapter 5 of God Betrayed; Chapter 5 of Separation of Church and State)

END

The Sodomite Agenda, Religious Organizations and Government Tyranny

I Pledge Allegiance to God and His Kingdom, Not to America

The Proper Response by believers and churches to Obergefell, the United States Supreme Court same sex marriage decision (063010)

The Republican Response to Obergefell – Wrong!!!!!! (070715)

The Hierarchy of Law as it relates to sodomy and sodomite marriage (060115)

Preaching on Sodomy in a Hate Crime Atmosphere (06_10)

Appendix A: What is a Corporation Sole?

Contents of this booklet (left click link to go to entry):

Introduction

Chapter 1: Legal Entity Status and the Corporation Sole
Chapter 2: Analysis of “Benefits of the Corporation Sole Compared to a Traditional 501c3 Church”
Chapter 3: Analysis of “Church Establishment Affidavit”

Conclusion

Appendix A: What is a Corporation Sole? (Below)
Appendix B: Corporation Sole and Internal Revenue Code §§ 501(c)(3) and 508

Related articles:

Jerald Finney
Copyright © February 5, 2015

What is a corporation sole? Who creates the corporation sole? The creator of the corporation sole defines its creation, just as God defines that which He creates, ordains, or establishes. The corporation sole is a creation of state law. Just as human beings are creatures of God, so corporations sole are creatures of the state. The proof?—the Oregon corporation sole statutes (reproduced below) which allow churches to accept the state of Oregon’s offer to churches to place themselves under state law and become corporations sole. Those statutes make clear that the corporation sole is a non-profit corporation which is under the law which creates it. Keep in mind that a few other states also create corporations sole. After studying this analysis, one who is heretofore unfamiliar with delving into this issue will be prepared to examine the corporation sole statutes of other states.

Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013 is the authority behind or the creator of the corporation sole. (Click the colored link to go directly to the statute.)

Oregon Revised Statutes Section 65.067. Click the above image to go directly to statute.
Oregon Revised Statutes Section 65.067. Click the above image to go directly to statute.

Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013 says:

“(1) An individual may, in conformity with the constitution, canons, rules, regulations and disciplines of a church or religious denomination, form a corporation under this section to be a corporation sole. The corporation sole is a form of religious corporation and differs from other religious corporations organized under this chapter only in that the corporation sole does not have a board of directors, does not need to have officers and is managed by a single director who is the individual who constitutes the corporation and is the corporation sole’s incorporator or the successor of the incorporator.

“2) The name of the corporation sole is the same as the office within the church or religious denomination that the incorporator holds, followed by the words ‘and successors, a corporation sole.’

“(3) All of the provisions of ORS 65.044 to 65.067 apply to a corporation sole. If the corporation sole has no officers, the director may perform any act that an officer may perform with the same effect and in the same manner as though one or more officers of the corporation sole performed the act.

“(4) If a corporation sole or the individual that constitutes the corporation sole is the only member of a religious corporation, the religious corporation is not required to hold an annual membership meeting under ORS 65.201 if the religious corporation is: (a) Incorporated under the provisions of this chapter; and (b) Of the same church or religious denomination as the corporation sole.

“Approved by the Governor May 16, 2013 Filed in the office of Secretary of State May 17, 2013 Effective date January 1, 2014.”

Notice the first sentence of the above statute: “An individual may, in conformity with the constitution, canons, rules, regulations and disciplines of a church or religious denomination, form a corporation under this section to be a corporation sole.” A church may, as in the case of all non-profit corporation laws in America, form what? A corporation. The law says an individual “may form a corporation … under this section to be a corporation sole.” [Empahsis mine.] Under what? Under this section of the law, not under God. In conformity to what?–In comformity to the “constitution, canons, rules, regulations of a church or religious denomination;” not in conformity to Bible principle. A church corporation sole may be in conformity to the “constitution, canons, rules, regulations of a church or religious denomination” but it is not in conformity to New Testament church guidelines.

The next sentence says: “The corporation sole is a form of religious corporation and differs from other religious corporations organized under this chapter only in that the corporation sole does not have a board of directors, does not need to have officers and is managed by a single director who is the individual who constitutes the corporation and is the corporation sole’s incorporator or the successor of the incorporator.”

ContractBecause a church may form a corporation sole under the statute, the state is only extending an offer which a church may accept. If the church accepts the offer, she has entered into a contract with the state. The basic components of a contract are offer, acceptance, and consideration. Consideration means that each party to the contract must receive a benefit. The state receives a benefit—control over the accepting church to the degree laid out in the statute. The accepting church believes that she receives a benefit—the contractual protections she perceives she gets from the law of contract. Never mind that she is no longer under the Lord Jesus Christ only—His power, principles, laws, judgment, and benefits are not enough for the corporate church. In fact, some of the laws of the state are deemed to be superior to the laws of God; this must be the case because the corporate church agrees to enter into a contract forbidden by the New Testament principles and many of whose conditions directly contradict those principles. Corporation sole churches and all other corporate churches should thank the Lord for his permissive will since they are no longer in His perfect will.

HierarchyOfLawAll law has a hierarchy (a line of authority). The authority of a given law depends upon its place in the hierarchy. For example, God’s law is the highest law. In America, the next highest law is the United States Constitution. Below that are state, county, and city, constitutions and laws, in that order. Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013 is not the highest law of the State of Oregon. It falls below the Oregon Constitution, United States Constitution, all of which are under God’s law. One can challenge a lower law in the United States Federal or in the Oregon courts should he believe it is unconstitutional. Of course, as applied to churches, Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013 violates God’s law. It also violates man’s law, the First Amendment, which is a statement of the Bible principle of separation of church and state. (See Is Separation of Church and State Found in the Constitution? and the resources cited in that article.). Instead of not accepting the state’s offer and perhaps challenging the statute on First Amendment grounds, many churches choose to accept the offer the state makes in the law.

Jude1.15What about appealing the lawfulness of this Oregon law to the Judge of the Universe? That judge, since He knows all things, created all things, and ordained all lawful powers, does not hold court in a secular manner. He operates outside of time and outside man’s temporal procedures. He weighs all the facts and judges from His throne. In some ways, churches suffer the natural, God-ordained consequences for violation of His laws. Sometimes, God decides to judge in the here and now through temporal means. Sometimes He reserves judgment for the final judgment day.

One can determine the nature of the Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013 by the words of the statute and by the immediate hierarchy: Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013. The corporation sole is under Oregon Revised Statutes, Oregon Non-profit Corporation Law, Business Organizations, Commercial Code. Again, this shows that the corporation sole is a non-profit corporation.

Although the Oregon Corporation Sole church is a non-profit corporation, she is distinct from in some ways and the same as in some ways to other Oregon non-profit corporations. The law explains how she is distinct and how she is the same. The law says in Section (1):

“… The corporation sole … differs from other religious corporations organized under this chapter only in that the corporation sole does not have a board of directors, does not need to have officers and is managed by a single director who is the individual who constitutes the corporation and is the corporation sole’s incorporator or the successor of the incorporator.” [Emphasis mine.]

That is the only difference—the Oregon corporation sole is managed by a single director. Section (2) applies to the name of the corporation sole.

Section (3) tells how the corporation sole is the same as other Oregon non-profit corporations: “(3) All of the provisions of ORS 65.044 to 65.067 apply to a corporation sole.” This shows that the Oregon corporation sole is a non-profit corporation and that “All of the provisions of ORS 65.044 to 65.067” apply to her.

What are those provisions? The titles are as follows:

65.044       Incorporators
65.047       Articles of incorporation
65.051       Incorporation
65.054       Liability for preincorporation transactions
65.057       Organization of corporation
65.061       Bylaws
65.064       Emergency bylaws and powers
65.067       Corporation sole

One can read Sections 65.044 to 65.067 by going to Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013.

Section (3) also explains the function of the director of the corporation sole:

“If the corporation sole has no officers, the director may perform any act that an officer may perform with the same effect and in the same manner as though one or more officers of the corporation sole performed the act.””

A non-profit corporation church.
A non-profit corporation church.

It is clear that a corporation sole is a Oregon non-profit corporation created by Oregon Revised Statutes, Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code § 65.067, 2013.

Church Internal Revenue Code § 508 Tax Exempt Status

See also, Legal answer to Pastor’s inquiry concerning whether a potential donor of substantial gift an claim a tax deduction under IRC Section 508 even though the church will not give an IRS acknowledgement (123118)

Jerald Finney
Copyright © April 28, 2014

Click the above to go to online version of God Betrayed.
Click the above to go to online version of God Betrayed.

In the book God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (“God Betrayed.”)(See Endnote 1 for links to the two free versions or for ordering information should you desire a softback copy as well as information on other books and resources by Jerald Finney.) as well as in other books and writings, I originally taught that a New Testament church could depend upon Internal Revenue Code (“IRC”) § 508 (“508”) for her non-taxable status. I was wrong. After years of study, I have learned that a New Testament church cannot depend upon 508 for her non-taxable status because, in so doing, the church gives up her New Testament and First Amendment status. However, I am more certain than ever of the correctness of my original biblically based conclusions that a church grieves the Lord when they intentionally, knowingly, recklessly, or negligently attain church corporate and/or 501(c)(3) status or legal entity status (See Endnote 1) of any kind. I ask those who have followed my teachings to forgive me for misleading them concerning church 508 status. This brief article explains church 508 status and its effect.

A New Testament Church is also a First Amendment Church. This is because the First Amendment is a law which corresponds with some biblical principles including the principle of separation of church and state. The First Amendment is a part of the second highest law of the land, the United States Constitution. The highest law of every nation is God’s law, whether a nation recognizes it or not. The Lord, for the time being, allows individuals, families, churches, and nations free will to honor His precepts or not. The choices determine the ultimate consequences. Click here to listen to Jerald Finney’s lecture “Hierarchy of Law” (CD of speech at Old Paths Baptist Church in Fayetville, TN. given on the Sunday the church formally adopted the Declaration of Trust). The following article “First Amendment Protection of New Testament Churches/Federal Laws Protecting State Churches (Religious Organizationsalso explains hierarchy of law.

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.”

Notice especially that the First Amendment says, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” [Emphahsis mine.]

Are not those words very clear? No law means “no law.” What is IRC § 508? It, like IRC  501(c)(3), is a law made by Congress and signed by the President. According to the clear meaning of the First Amendment, IRC § 508 and IRC  501(c)(3) are, when applied to churches, laws “respecting an establishment of religion and preventing the free exercise thereof.”

Why would a church take themselves from First Amendment status and protection to either IRC § 508 or IRC § 501(c)(3)? One reason is lack of knowledge, wisdom, and understanding. When a church claims either 508 or 501(c)(3) status, she has rejected her First Amendment non-taxable status and freely accepted the offer of the federal government to enter into an agreement (contract) for tax exempt status as provided by a law. (See God Betrayed for teaching which explains this)

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

A portion of Internal Revenue Code § 508. Click to the above to go to § 508.
A portion of Internal Revenue Code § 508. Click the above to go to § 508.

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

§ 508(a),(c) says churches are excepted from obtaining IRC § 501(c)(3) tax exempt status (See Endnote 2 for links to articles which fully explain church IRC § 501(c)(3)) status). 508 churches are an exception to the civil government requirement that certain organizations file for 501(c)(3) tax exempt status.

A church should rely on the First Amendment to the United States Constitution, not on 508 status for three reasons. First, the First Amendment is a statement of the biblical principle of separation of church and state (See, for a short explanation with links to more in depth studies, Is Separation of Church and State Found in the Constitution?). When a church relies on the First Amendment, they are relying on a biblical principle. Should the biblical principle be abused or ignored by the civil government, so be it—a church should then rely and act only on the biblical principle. Endnote 3.

A law of man which enacts some biblical principles.
A law of man which enacts some biblical principles.

Second, to rely on 508 contradicts the First Amendment. To repeat, the First Amendment religion clause states:

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

IRS Publication 1828. Click the above to go directly to IRS Pub. 1828.
IRS Publication 1828. Click the above to go directly to IRS Pub. 1828.

Obviously, 508 is a law made by Congress which regards an establishment of religion; 508 also prevents the free exercise of religion because a church which claims 508 status thereby submits themselves to some control by the federal government in that the church becomes subject to the rules that come with IRC 501(c)(3) status. 508 does not state that the First Amendment forbids Congress from making any law in violation of the First Amendment; and that, therefore, a church is non-taxable. 508 is a law made by Congress which states that Congress, by law, is declaring an exemption for churches. Thus, by a clear reading of the First Amendment, 508 is clearly unconstitutional. Most churches and pastors could care less about this technicality.

From IRS Publication 1828

The correct position which is held by the Internal Revenue Service (“IRS”) is that a church has submitted herself to IRC § 501(c)(3) regulation and ignored her First Amendment status by relying on 508 (a law passed by Congress) instead of the First Amendment. The IRS makes this position clear. Page 3 of IRS Publication 1828 states that “churches that meet the requirements of § 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS” [Bold red emphasis mine]. The IRS repeats this on page 24 of IRS Publication 557, “Tax –Exempt Status for Your Organization.” Under Organizations Not Required To File Form 1023 churches are listed. The following sentence is included: “These organizations are exempt automatically if they meet the requirements of section 501(c)(3).” [Bold red emphasis mine.]

IRS Publication 557, p. 24. Click the image to go directly to the publication.
IRS Publication 557, p. 24. Click the image to go directly to the publication.

One should also understand that the New Testament (First Amendment) church will not be involved with the IRS for several reasons: the church claims no 501(c)(3) or 508 status; is not a legal entity such as a corporation aggregate or sole, an unincorporated association, or a charitable trust; is not a business; has no income; has no employees or staff; has no constitution or by-laws; and, no matter what the particular civil government does, honors the biblical principle of separation of church and state which is reflected in the First Amendment in America.

The New Testament (First Amendment) church who loves the Lord will be prepared for the eventuality that the Internal Revenue Service, some other Federal agency, the President (recent presidential actions and orders as well as the actions of many prior presidents demonstrate what a tyrannical president can and will do), and/or the Supreme Court of the United States may someday misinterpret and apply the First Amendment, and a New Testament church who loves the Lord and is committed to pleasing Him will remain submitted to the higher authority. God Betrayed (see above for free links to the book) explains all this and also shows how churches are operating in America without becoming legal entities such as incorporated 501(c)(3) religious organizations thereby retaining their First Amendment and biblical status. For specifics on how to organize a church under the Bible principle of separation of church and state, one can also go to: ABIBLETRUST.COM.

Third, a New Testament church (a church organized according to the principles of the New Testament), among other things, receives no income, is not a 501(c)(3) or 508 religious organization, has no constitution or by-laws,  has no employees or staff, and runs no businesses (daycare, “Christian” schools, “Bible” colleges, seminaries, cafes, etc.). Church members of a New Testament Church give their tithes and offerings to God, not to a religious organization, for use in ways consistent with New Testament teaching. All monies given to God are disbursed in accordance to the guidelines of the New Testament, and no money is left over. Let us use our common sense, if not our biblical sense: Even a business which makes no profit pays no taxes. A church which has no income cannot be taxed. A church which does have net income should be taxed since (1) she is operating as a business and not as a New Testament church; and (2) (if she is a legal entity such as a non-profit corporation (includes corporation sole – see Critique of “Church Freedom and the Corporation Sole” Website), or unincorporated association she is set up as a non-profit religious organization and therefore violates not only biblical principles for the organization of a church but also her non-profit agreements with the state of incorporation by making a profit.

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

If a church does not apply for 501(c)(3) tax exempt status or claim 508 tax exempt status, and if she is organized as a New Testament church, according to the First Amendment which agrees with the biblical principle of separation of church and state, the non-taxable status of that church must be honored. No matter what the civil government claims, that church cannot be taxed anyway because she has no income; she gives her tithes, offerings, and gifts to God, not to a government created religious organization. Said another way, the church (the members) give to God, not to the church, inc.

Always keep in mind matters which I cover in detail in other writings and teachings: a church who incorporates (non-profit corporation or corporation sole), or becomes a charitable trust, unincorporated association or some other type legal entity has voluntarily given up her exclusive First Amendment status in favor of partial and substantial Fourteenth Amendment status since she has become a legal entity.

There are other ways a church may violate biblical principles concerning the doctrine of the church thereby becoming some type church other than a New Testament church. Understanding these matters requires a believer to grow in knowledge, understanding, and wisdom through dedicated Bible study.

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

Please, God’s dear churches, do not lose your New Testament status by becoming a legal entity of any kind. Please learn to love the Lord as he loves you and gave Himself for you;

“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” (Ephesians 5.25-27).

Please, dear believer, learn to think Biblicly (spiritually), not practically from the human perspective (fleshly). Please become more Christian than American, more heavenly than earthly. God made clear that Christ in heaven is to be the only authority (power or head) “over all things to” His churches. Put another way, a church, the body whose feet walk and work on earth, is to be connected to only one head, Christ in heaven. A church with two heads (authorities or powers) is a monstrosity.

  • “And what is the exceeding greatness of his power to us-ward who believe, according to the working of his mighty power, Which he wrought in Christ, when he raised him from the dead, and set him at his own right hand in the heavenly places, Far above all principality, and power, and might, and dominion, and every name that is named, not only in this world, but also in that which is to come: And hath put all things under his feet, and gave him to be the head over all things to the church, Which is his body, the fulness of him that filleth all in all” (Ep. 1.19-23).
  • “Now therefore ye are no more strangers and foreigners, but fellowcitizens with the saints, and of the household of God; And are built upon the foundation of the apostles and prophets, Jesus Christ himself being the chief corner stone; In whom all the building fitly framed together groweth unto an holy temple in the Lord: In whom ye also are builded together for an habitation of God through the Spirit” (Ep. 2.19-23).
  • “And he is the head of the body, the church: who is the beginning, the firstborn from the dead; that in all things he might have the preeminence” (Col. 1.18).

From the above verses, and many more that could be quoted, one sees that God desires his churches to be spiritual entities or bodies (See also, e.g., Ep. 4 and the whole book of Ep., Col., and 1 Co. 12 for more on churches as spiritual bodies) connected to their only God ordained Head, the Lord Jesus Christ in heaven, while walking as spiritual entities only here on the earth. Churches are to be “builded together for an habitation of God through the Spirit,” not built together as a corporate 501(c)(3) or 508 organization according to man’s earthly, legal laws.

Please repent and turn from the deceits of the god of this world to the precepts of God. Please prepare for the day when believers and churches will have to choose either to lay it all down for God and for eternal reward or to lay it all up for Satan for a perceived earthly security. That day has not yet arrived for believers and churches in America, but that day appears to be fast approaching.

Endnotes

1. For the definition of and more information on “legal entity” see the index of God Betrayed/Separation of Church and State:The Biblical Principles and the American Application which is available free in PDF, in online form (no index), or which may be ordered by clicking Order information for books by Jerald Finney.”

All books, except An Abridged History of the First Amendment, by Jerald Finney are available free in both PDF and online form. One may go to Order information for books by Jerald Finney should he desire to order any of the books which are in print.

God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (Link to preview of God Betrayed)(PDF; online form) may be ordered from Amazon by clicking the following link: God Betrayed on Amazon.com or from Barnes and Nobel by clicking the following link: God Betrayed on Barnes and Noble. All books by Jerald Finney as well as many of the books he has referenced and read may also be ordered by left clicking Order Information for Books by Jerald Finney or directly from Amazon by going to the following links:

  1. Render Unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses (Kindle only)(PDF; online form);
  2. The Most Important Thing: Loving God and/or Winning Souls (Kindle only from Amazon.com; see Order information for books by Jerald Finney to order directly from Kerygma Publishing Co.)(PDF; online form) ;
  3. Separation of Church and State/God’s Churches: Spiritual or Legal Entities? (Link to preview of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?) which can also be ordered by clicking the following Barnes and Noble link: Separation of Church and State on Barnes and Noble (PDF; online form)
  4. An Abridged History of the First Amendment is available in PDF only.
  5. Tract on the legality of street preaching is available in PDF only.
  6. “Quick Reference Guide for Churches Seeking to Organize According to the Principles of the New Testament” is available in PDF only.
  7. Miscellaneous articles by Jerald Finney.
  8. Links to some of Jerald Finney’s writings on legal issues.

Click here to see for updated list of Finney’s books. This Endnote is complete up to August 1, 2014.

Companion website:Church and State Law

When Did the Church Become a Business?” a beautiful song by Jason Bellard

2.Federal government control of churches through 501(c)(3) tax exemption” and “The incorporation-501(c)(3) control scheme.”

3. To understand the hierarchy of law, one may read the article “Laws Protecting New Testament Churches in the United States: Read Them for Yourself” or listen to the lecture “Hierarchy of Law.”

When Did the Church Become a Business?” a beautiful song by Jason Bellard

Click here to go to the article
Click here to go to the article “Is Separation of Church and State Found in the Constitution?”

A biblical and historical Baptist principle is that God desires separation of church and state, not separation of God and church or separation of God and state. Study Jerald Finney’s writings and/or audio teachings to discover the truth about and how to apply the principle. Finney’s teachings prove that the revisionist view of Separation of Church and State accepted without examination by most American “Christians” is false and has done great damage to the cause of Christ and to America.