As shown in Appendix A, a corporation sole church is a non-profit corporation, a creature of the state. Let us look at the 501(c)(3) ramifications of this.
Internal Revenue Code Section 501(c)(3). Click image above to go directly to 501(c)(3)
An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.
…
“(c)List of exempt organizations
The following organizations are referred to in subsection (a):
…
“(3)Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
Thus, according toInternal Revenue Code § 501(c)(3), corporations are exempt from taxation. A corporation sole is a corporation and therefore may apply for 501(c)(3) tax exempt status. (See Appendix A.).
Some corporation sole churches do not like the rules that go with 501(c)(3) status. Therefore, they make the argument that, since they are not corporations, they may obtain Internal Revenue Code § 508(c)(1)(A) status, become automatically exempt, and not be subject to the rules that come with 501(c)(3). Their arguments are untenable because they are non-profit corporations. Yes, they, like any other church, may claim § 508 status; yes, they may become exempt under § 508; no, they, as § 508(c)(1)(A) churches, do not avoid the 501(c)(3) rules thereby. § 508(c)(1)(A) churches are subject to 501(c)(3) rules.
Corporation sole churches know that they may have to go to court to defend their position. This is an admission that they are legal entities who are under the authority of the state of incorporation and the federal government as to Internal Revenue Code matters. Whether they admit this or not, it is a fact established when they accepted the state’s offer for state, non-profit corporation status and when they claim § 508 status. Since they are legal entities, creatures of the state, their only challenge to rules they do not like is through action in state or federal court. Should they be taken to court, for example by the Internal Revenue Service, they have agreed that the state is the final judge of the issue being litigated.
The issue is one of authority. Those who love the Lord are willing to give their all if necessary as they refuse to follow lower laws when those laws conflict with the highest law. Millions of martyrs have followed the example of the apostles who said, when the authority of the Lord Jesus Christ was at issue, “We ought to obey God rather than men” (Acts 5:29).
Internal Revenue Code Section 508. Click image above to go directly to 508.
Some corporation sole churches try to argue that they are not corporations and therefore that they may claim Internal Revenue Code § 508(c)(1)(A) status which insulates them from following the requirements of 501(c)(3). They do not mind being a creature of the state under the corporation sole law, but they try to avoid being under the rules that come with 501(c)(3). What they are trying to do is attain government approved tax exempt status (as opposed to First Amendment non-taxable status) without submitting to the rules of 501(c)(3). They do not mind the fact that they are not organized according to God’s rules in the New Testament and that they are a creature of the state of incorporation. They wish to twist the law in order to get what they falsely perceive to be benefits without the rules that come with the “benefits.” Their effort is not according to knowledge. The IRS has already covered this matter. 508 churches are held to be subject to the rules that come with 501(c)(3). (See Church Internal Revenue Code § 508 Tax Exempt Status for a full explanation).
Many non-profit corporation churches claim 501(c)(3) status without filing Internal Revenue Service form 1023. They do so in various ways One way is to include the provisions of 501(c)(3) in their corporate constitutions. Another is to simply acknowledge the exemption by giving acknowledgement to those who give. Even should a church not give acknowledgement, in the event of taxpayer audit, what the IRS wants to know is “what was given,” “did the taxpayer give in a manner prescribed by the IRS Code,” and “was the deduction given to a church (whether a legal entity or not.)”.
Corporation sole churches who try to twist the law to keep their deductible status while avoiding the rules that go with exempt status show their true colors to God and to those who take the time to examine what they are doing. Perhaps they act and speak ignorantly because of lack of both Bible and legal study which renders the subject outside their field of expertise.
Click to go directly to Church Establishment Affidavit Page
1. Analysis of the first two paragraphs 2. Analysis of section 1, “THE JURISDICTIONAL DISTINCTION AND DIFFERENCES BETWEEN THE LAWS OF 508C1A AND 501C3 IN THEIR RELATIONSHIP TO A CHURCH ESTABLISHMENT AFFIDAVIT” 3. Analysis of section 2 “WHY OUR CHURCH ESTABLISHMENT AFFIDAVIT IS SO IMPORTANT TO CHURCHES” 4. Analysis of “DOES THE GOVERNMENT OR IRS REALLY WANT THIS FIGHT?”
“When getting a Corporation Sole for your Church and Ministry, it is important to note that your actually creating two separate legal creatures. First, you create your Church (which is legally manifested through a Church Establishment Affidavit) and then the Churches subsequent Corporation Sole (which is nothing more than an incorporated office held within the Church for the purposes of managing all of the Churches assets and is NOT the Church itself).”
My comments. Yes, you are creating two legal creatures, but they are not separate which is made clear by the law and by the paragraph quoted above. Notice that he says, “Corporation Sole (which is nothing more than an incorporated office held within the Church for the purposes of managing all of the Churches assets and is NOT the Church itself). The incorporated sole office is held within the church for the purpose of managing all of the Church’s assets. It is also an office created by the corporation sole contract with the state, Oregon in this case. The Bible mentions no such office for a New Testament church. A church under God will comply with New Testament guidelines for the church. A church under the state, created by men, such as the church created by a Church Establishment Affidavit, will concoct its own manner of organization. Some will then publish that method and deceive others such that they contribute monetarily (of course, they are not required to donate) to the deceivers who help them profane God’s church through devices such as non-profit corporation sole and Church Establishment Affidavit which, among other things, defines the church according to the IRS defintion of a church.
“A Corporation Sole CANNOT be established unless your Church is first created through the use of a Church Establishment Affidavit that needs to be signed by both you as the Pastor of the Church but also two Church member witnesses and your Churches eventual Corporation Sole’s Successor and/or Secretary. If a Corporation Sole were to be established prior to you signing, witnessing and having notarized the Church Affidavit, then your Corporation Sole can be out of statutory compliance and potentially deemed a sham organization by the IRS.”
This man, Joshua Kenny-Greenwood, Overseer of The Empowerment Center Church, just makes stuff up, as I have pointed out over and over in this booklet. Hundreds of thousands of churches alone have been established under God, in Bible order, without a church establishment affidavit. Sadly, most American churches chose, against the will of God according to His word, to become legal entities such as non-profit corporations (which, as explained in prior chapters, includes the corporation sole non-profit corporation), unincorporated associations, charitable trusts, and business trusts; the vast majority of those went on to become 501(c)(3) churches. There is a significant remnant of churches in America who are doing things God’s way.
“The reason we emphasis that a Church must first be organized through an Church Establishment Affidavit, is because an Affidavit is the highest form of evidence a person can bring forth into a Federal courtroom. This allows your ministry to prove to the court,without a reasonable doubt, the distinct legal existence of your Church, its MANDATORY tax exemption jurisdiction under the law of 26 USC 508(c)(1)(a), creates a record that is signed under the penalties of perjury by multiple Church members and declares that your Church even adopts the IRS’s own 14 point standard to even be legally recognized as a Church! Its creation and use also allows the Church to create a legal and jurisdictional separation of responsibilities between the role of the Church itself and the isolated and incorporated office of the Corporation Sole (which the latter is under 501c3’s jurisdiction).”
Click to go directly to code.
Should the IRS target a church which is a legal entity, such as a corporation sole church, for some reason, the church will have to first go through the agency process, perhaps a hearing. The IRS Code § 7611 covers church tax inquiries and examinations. § 7611 says:
IRS personnel must observe the restrictions imposed by IRC § 7611 in any inquiry or examination of a church. Such inquiry or examination must be limited to determining whether:
The organization is exempt from tax under IRC § 501(a),
The organization is a church under IRC §§ 509(a)(1) and 170(b)(1)(A)(i),
The church is carrying on an unrelated trade or business as defined in IRC § 513,
The church is otherwise engaged in activities subject to federal tax, or
The church has engaged in an excess benefit transaction (See procedures in IRM 7.27.30.8).
The term “church” includes
Any organization claiming to be a church. However, see ,IRM 4.76.7.4.2(4), and
Any convention or association of churches.
Should the IRS begin an inquiry and examination of a corporation sole church, or any other church which is a legal entity, they must abide by § 7611. Should the church lose in the agency process, she can appeal to Federal Court. Affidavits are not acceptable evidence in many agency and court proceedings. Generally, the adversary has the right to cross-examination. If a trial is required, affidavits will not be accepted. Witness evidence under oath and subject to cross-examination is the highest form of evidence and witness evidence will be required. Even should a church corporation sole be supported by affidavit, an affidavit is not subject to cross-examination and the IRS can subpoena the signers of the affidavit and place them under cross-examination. Since the signers have already displayed their ignorance by falling for the corporation sole scheme, they most assuredly would not look good under cross-examination by an experienced and studied government attorney. The IRS can also bring in other witnesses. See § 7611 for the areas the IRS can inquire into.
2. Analysis of section 1, “THE JURISDICTIONAL DISTINCTION AND DIFFERENCES BETWEEN THE LAWS OF 508C1A AND 501C3 IN THEIR RELATIONSHIP TO A CHURCH ESTABLISHMENT AFFIDAVIT”
This section is like the writing on this entire website, a disgrace in the eyes of man and God. It is similar to a written Frankenstein in that its author, Joshua Kenny-Greenwood, grabs quotes from all kinds of sources, out of contest, puts them together in a chaotic mess, adds hyperbole and falsehoods and presents it to the world as though he has created something beautiful. He is either a brilliant con man or an unknowledgeable person who does not have the requisite skills to understand what he is doing. The sad thing is, apparently, some pastors and churches fall for his scheme.
“In order to better understand everything, let’s first discuss the IRS’s Jurisdiction over both 508c1a and 501c3. You’ll begin to see WHY creating your Church with a Church Establishment Affidavit and then organizing its finances through a subsequent Corporation Sole is the only viable way to creating a Church here in America.”
“First lets look at the law of 508c1a and what entities it has jurisdiction over:
“26 USC 508(c)(1)(a) gives MANDATORY Tax Exemption to Churches without any pre-conditions (Unlike 501c3’s stipulations of barring religious organizations from all political activity).
“Therefor, 508c1a has Jurisdiction over: Churches, their integrated auxiliaries, and conventions or associations of churches and any organization which is not a private foundation and the gross receipts of which in each taxable year are normally not more than $5,000.
“A Church organized with the use of a Statutory Declaration Affidavit is underneath the jurisdiction of 508c1a.
“While 501c3 only has Jurisdiction over: Corporations, Certain Trusts, Community Chests, Funds and Foundations. Source, Cornell Law University. You notice that the word CHURCH is completely absent from this list? Thats because Churches are NOT subject 501c3 rules, they are only mentioned in under the jurisdiction of 508c1a. It is generally misunderstood by most law professors that Churches are generally always under the classification of 501c3. This is a misconception because nearly 99% of all Churches are fully incorporated (thus fall under the Corporate designation of 501c3). Since a Church being formed through an affidavit and being declared under 508(c)(1)(a) is neither considered a Corporation, community chest, religious trust, fund or foundation, the same designation of a Church generally being under 501c3 DOES NOT APPLY.
“Now, unlike 508c1a that gives the Church mandatory tax exemption, 501c3’s tax exemption status is only guaranteed if the religious organization meets the conditions set forth in 501c3.
“These Restrictions for Churches Include:
…“
Click the above to read “1,000 Pastors who pledge to defy IRS and preach politics from pulpit ahead of election misunderstand the law and the hierarchy of law.”
The government has jurisdiction over incorporated churches (including corporation sole churches). The same rules are applied by the IRS to both 501c3 and 508 churches. I have covered this in Church Internal Revenue Code § 508 Tax Exempt Status. You can go directly to the article, of course, by left clicking the link in the last sentence. The IRS makes clear that the 508 church is subject to the same rules as the 501c3 church. Some 501c3 churches are publically proclaiming that they are breaking the rules of 501c3 and the IRS usually has not taken action against them. I wish the IRS had the resources to confront all 501c3 and 508 churches who break the rules. Why? Because all churches who are legal entities such as incorporated churches (including non-profit corporation sole churches) and all 501c3 and 508 churches grieve our Lord by operating under man’s laws rather than under God’s law. I covered the activities of the “Pulpit Initiative” churches several years ago in the article 1,000 Pastors who pledge to defy IRS and preach politics from pulpit ahead of election misunderstand the law and the hierarchy of law. That article will serve as my further comments here.
“To disprove skeptics that would claim otherwise, let me prove to you that a Corporation Sole is immune to this 501c3 requirement. Please allow me present to you an active Oregon State Law § 65.067 (1) which states,
“1.) Any individual may, in conformity with the constitution, canons, rules, regulations and disciplines of any church or religious denomination, form a corporation hereunder to be a corporation sole. Such corporation shall be a form of religious corporation and will differ from other such corporations organized hereunder only in that it shall have no board of directors, need not have officers and shall be managed by a single director who shall be the individual constituting the corporation and its incorporator or the successor of the incorporator.
“All other religious organizations, religious trusts, community chests funds and foundations are subjected to this IRS rule and are legally required to have a board.”
Oregon Revised Statutes Section 65.067. Click the above image to go directly to statute.
He says an active Oregon State Law § 65.067 (1) law, but quotes the 2011, as opposed to the 2013 amended law. Notice that the law he quotes does not require a Church Establishment Affidavit. Then, he adds his own statement: “All other religious organizations, religious trusts, community chests funds and foundations are subjected to this IRS rule and are legally required to have a board.” That does not prove that the corporation sole is immune to the 501c3 requirement. 501c3 has no such rule which requires any church to have a board. The Oregon Non-Profit Corporation Law can be accessed at the following link: 2013 Oregon Revised Statutes,Oregon Non-profit Corporation Law, Volume 2 Business Organizations, Commercial Code§ 65.067. Read it for yourself. You will see that Joshua Kenny-Greenwood is wrong (to be kind).
Greenwood continues:
“#2. No substantial part of the activities of which is carrying on propaganda 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:
“This absolutely satanic law means your incorporated Church or religious trust CANNOT engage in or influence any aspect of public policy for any reason whatsoever. Completely defeating the intent of the Church achieving its purpose of fulfillingRomans 8:20-21.
“This is why the Church Establishment Affidavit is so important. Only Corporations (that means ANY incorporated Church or religious organization), Trusts (that means ANY form of a religious trust), community chests, funds and/or foundations are under the jurisdiction of 501c3. Since the Statutory Declaration is neither one of things listed above, it is completely immune to 501c3 and is allows your Church to be under the law of 508c1a. Without this jurisdictional distinction between the Church itself (created under the affidavit) and the office of the Corporation Sole (which is incorporated as a 501c3 for banking purposes) then it would be impossible under current US law to organize a ministry using any other method without the Church itself fully coming under the law of 501c3.”
As has been shown and as is obvious from the law relied upon by the promoters of the church corporation sole, the corporation sole is a corporation provided for by state law. As such, it is subject to the rules that come with 501(c)(3) when it in any way appeals to either 501(c)(3) or 508. One cannot simply override reality by concocted rhetoric as the writings of Church Freedom and the Corporation Sole website purport to do.
3. Analysis of “WHY OUR CHURCH ESTABLISHMENT AFFIDAVIT IS SO IMPORTANT TO CHURCHES”
“We should note that the Church Establishment Affidavit we’ve created here at The Empowerment Center was crafted in such a manner that it accomplishes the following:
It lawfully fulfills ALL 14 Points both the IRS and courts require Churches to have in order to be legally recognized as a Church by the Federal Government.
It distinctly declares the difference between the Church itself and isolated Office of the Corporation Sole (including the different responsibilities of each office).
It uniquely declares your Corporation Sole’s intended future Successor and it defines who fulfills the role of its Secretary.
It allows for two additional witness Church members to declare and affirm the existence of this said Church/Ministry.
It declares its recognition of being under the law of 508c1a.
It declares that it does NOT find it advantageous to seek official recognition from the IRS for the Churches tax exemption status and rejects the IRS’s form 1023.
It removes all doubts and puts an end to any conflicting decision regarding your Churches existence.
The Bank will use it to validate the role of the Successor in the event of the Corporation Sole’s demise and or resignation.“
My comments. I have already covered everything of importance here in other portions of the booklet, but I will add a few comments here. Notice that the Affidavit defines the church according to IRS criteria, not Bible doctrine, so that the IRS will recognize the religious organization as being a church. In other parts of the website, the Empowerment Center recognizes that corporation sole status makes the church a legal entity, not a spiritual New Testament entity only. Hence, the corporation sole church obviously violates Bible principles for New Testament church organization. All church members of a New Testament church will affirm the existence of the New Testament church. In fact, the Lord Jesus Christ will affirm the existence of the New Testament Church; He will be pleased with the New Testament church. His precepts show that the corporation sole church is a religious organization, not a New Testament church and that He is grieved when a church organizes as any kind of corporation, including a corporation sole. The corporation sole status removes any doubts that the church is a worldly religious organization, not a New Testament church. When a church claims 508 status, that church does not fill out IRS form 1023. The 508 church is subject, as explained elsewhere, to the same rules and the 501(c)(3). In other words, the 508 church is under the authority of the Internal Revenue Service as to the rules which come with 501(c)(3) status.
4. Analysis of “DOES THE GOVERNMENT OR IRS REALLY WANT THIS FIGHT?”
The Corporation Sole Scheme chains a church to the government, then she invites a fight with the government.
“Prior to our Church writing the Book and setting the record straight on the Corporation Sole, no one had ever thought to use an unincorporated Church Affidavit to both manifest the Church but also outline the jurisdictional distinction between the Church itself and the isolated office of the Corporation Sole. Then use the Church that is under the law of 26 USC 508(c)(1)(a) and NOT the 501c3 Corporation Sole to conduct operations that could influence public policy.”
No wonder no one had thought to do so. Obviously, the Lord Jesus Christ did not have Joshua Kenny-Greenwood around to help him build his church. The Lord established a reasonable order for His churches, not a chaotic order such as that proposed by Kenny-Greenwood. The Lord inspired the Apostle Paul as he, under the inspiration of God, laid out the ordered doctrine of the New Testament church. No wonder no one else thought of Kenny-Greenwood’s sham. It is so riddled with legal and spiritual error that only one with a fertile imagination and knowledge of neither relevant Bible principles nor law would have implemented it had they thought of it.
“There is an argument to be made that a Church can perform and operate in this manner and not become subjected to 501c3 political restrictions (since the affidavit clearly outlines the different jurisdictions). In fact, it would be the only argument the Church could legally make since every other method a Church uses to incorporate or manage its finances places it underneath 501c3’s jurisdiction.”
This method also, as I have explained over and over in this booklet, places the corporation sole church of Joshua Kenny-Greenwood under the rules of 501c3. Furthermore, he again concedes that the corporation sole church is a legal entity (a non-profit corporation) since only a legal entity can be taken to court. Since she can be taken to court, the state (through the court) is her authority. She is bound to abide by the decision of her authority, the court.
“We understand that this puts us in a position where there is no prior legal precedence for this type of legal claim. That is good for several reasons:
“If the IRS really wanted that fight and wanted to disprove that the said Church in this claim (Lets use our Church, The Empowerment Center, as an example) is in fact NOT a Church, they are going to need to be able to disprove our affidavit (which is vital to our argument that our Church is indeed a Church) is false. They would have several problems in this area. First, they would need to prove that everyone on the affidavit was lying (and thus committed the penalties of perjury). This would be especially difficult since it is VERY difficult for any Judge or IRS official to have the proper regulatory authority to even legally define a Church (one might even say to legally define a Church is unconstitutional in and of itself)! Now, the IRS has in place what they consider a 14 point test to see whether or not a Church is a legitimate Church. The principles of this test are used by the IRS and courts to determine if a Church is just that, a Church. Never mind that in the very same report the authors make the very wise statement that we will HEAVILY be using in any defense,
“‘Given the variety of religious practice, the determination of what constitutes a church is inherently unquantifiable. Attempts to use a dogmatic numerical approach might unconstitutionally favor established churches at the expense of newer, less traditional institutions.” –IRS 14 point rule guide.’”
I have already covered the evidence needed in federal court above. Your church members could testify that the church meets the 14 IRS criteria. That is not the problem. They would hold your church to be a church. I know that the Lord Jesus Christ in His word proves that an Empowerment Center church is not a New Testament church. The problem is that your church is under and recognizes the authority of the state to decide questions brought to them. You have a hybrid church, with two heads – er, maybe only one head, the state. After all, you have defined your church according to the IRS rule book, not God’s rule book.
“Here at The Empowerment Center and ChurchFreedom.org, we recognized this opening and took all 14 points to the IRS’s own preferences and applied them within the framework of our affidavit. Its important that we did this, as this should be enough to satisfy their very own discrepancies since a minimum of 4-5 people are coming together and attesting to these facts under the penalty of perjury, facts that any lawful Church could easily prove. This leaves only the isolated Corporation Sole as the lone bearer of the 501c3 status and not the Church itself. This means the Corporation Sole (which is the only entity underneath 501c3’s jurisdiction) needs to be the sole party responsible for any alleged violations to the 501c3 principle (which again, should only be limited to the 501c3 Corporate Sole and NOT the 508c1a Church). In addition, we would also take a play from the Alliance Defending Freedom’s Pulpit Freedom Sundays playbook as well and argue a secondary point that in their words,
“‘For instance, if a church loses its tax-exempt status for the pastor speaking from the pulpit, there is an argument to be made that because the church is automatically exempt under section 508(c)(1) (A) of the Internal Revenue Code, the tax-exempt status is only lost for the day the sermon was preached, and any contributions made at other times would still be deductible. It is important to note that this argument has not been tested and taxpayers should seek professional advice before claiming any such deduction for itemization.” –From, Pulpit Freedom Sunday and The Alliance Defending Freedom
Here, as in many other places, Joshua Kenny-Greenwood contradicts himself. Read it and figure it out for yourself. Kenny-Greenwood’s writings on this website are so ill-conceived and crazy that reading them leaves a knowledgeable believer who understands these matters with a spiritual headache. I would not continue this booklet if not for the Lord’s admonitions to his children to stand for truth, to fight the spiritual warfare that He has called us to fight. As to the quote from the ADF Pulpit Freedom Sunday’s, I again refer the reader to the article 1,000 Pastors who pledge to defy IRS and preach politics from pulpit ahead of election misunderstand the law and the hierarchy of law.
The argument he then refers to is ridiculous in light of the truths I have presented in this booklet. The argument is for the person who is denied the tax deduction for gifts to a church and not for the church and the church corporation (corporation sole in this instance). Remember what Joshua Kenny-Greenwood wrote in
“Benefit #8 – TAX DEDUCTIBLE CONTRIBUTIONS: A Church that has a Corporation Sole CAN receive tax deductible contributions from any member that gives a gift. The Corporation Sole is also immune from being required by law to give the donor a receipt acknowledging their gift! In this case, it is the responsibility of the donor to keep their records and NOT the Church or Corporation Sole. If your Church chooses to do so, it may voluntarily and freely (out of the kindness of its heart) give the donor a receipt acknowledging their contribution or donation.”
He did not seem to be concerned about the giver when he wrote Benefit #8. I analyzed Alleged Benefit # 8 in Chapter 2: Analysis of “Benefits of the Corporation Sole Comparedto a Traditional 501c3. Furthermore, the corporation sole church has no reason not to give an acknowledgement. It, as has been explained in this booklet several times, is a 508 church which is required to abide by the rules of 501c3.
“Making such bold argument(s) for legitimate Churches could potentially set a VERY REAL and VERY SERIOUS precedence if the Federal Government failed to make their case to a Judge or Jury. If they challenge our argument that Churches operating under the law of 26 USC 508(c)(1)(a), not the Churches subsequent and isolated Corporation Sole, can influence politics, have the Church body vote for or against political candidates, have the Church lobby congress or have the Church distribute political propaganda on behalf or against any political candidate for office (once again, the Church and NOT the 501c3 isolated Corporation Sole) and they lose, then they will potentially open the door WIDE OPEN for EVERY SINGLE CHURCH IN AMERICA to RUN to get their Corporation Sole and be FREE from the political restrictions that have plagued our Nations Churches. If they win such an argument, by the time they win we would have already freely given away our Corporation Sole support to TENS OF THOUSANDS of CHURCHES that already HATE 501c3 with a passion and are already bold enough to speak unfiltered truth behind the pulpit. This could mean EXTREME backlash from potentially millions of registered voters from members of those congregations (many of whom are EXTREMELY influential Christian business men and politicians themselves) that we’ve been training Pastors in how to lead in influencing intended Christian reforms. To make enemies with the Church as well in a political season such as this with the IRS already embroiled in scandal after scandal (from Lois Lerner lying to Congress to the IRS ‘accidentally’ destroying all hard drive evidence) or a Justice Department that fails to enforce current laws or investigate any Government agency of any wrongdoing, it would leave a VERY bad taste in the mouth of Christian voters in these Churches and would propel us to the National Spotlight (which is EXACTLY what we want, so we can make our case to Christians everywhere). It would also be extremely unwise timing as they would have underestimated the Jury’s potential disdain for the Government and their routine MANY failures, coverups and current violations to oaths of office perceived by the American public by officials in the Federal Government (this is in addition to the fact, that we will call upon the several hundred eye witnesses and VERY Charismatic Pastors that will first hand testify that we’re a Church). Any one person being on that Jury that is either a Republican or Christian WILL side with us. This would give the Church a HUGE edge in court. Either way, wisdom would see that such a challenge (if ever) given by the Government based on these merits would end up being a lose/lose situation for them.”
Church Freedom and the Corporation Sole has already lost because your scheme is not according to the Bible and not according to the law. Your incorporated 508 church is subject to the rules of 501c3. That has already been covered in this booket. Since the IRS does not have the resources to deal with every state church who is violating the rules of 501c3, they are not enforcing the law. You are grieving the Lord by organizing a state church (a legal entity). You did not have to so organize, but you did. You then try to twist the law to conform to your vision. The main thing is that your authority is the state. If the IRS wishes to take your church(es) to court for alleged violations of the rules that come with 501(c)(3), they can. They have authority over you. Christ does not wish His authority over His churches to be shared with anyone. Old Paths Baptist Church Separation of Church and State Law Ministry helps churches remain under God only. We can do this because we correctly understand Bible principle and law.
“This is WHY we do whatever it takes to freely give our support to as many qualified approved Churches in the shortest time as humanly possible. Officials should know and understand that while other unscrupulous Corporation Sole peddlers have fallen to greed and tried to sell the Corporation Sole away as a mere tax shelter, we have not. We ABSOLUTELY NEVER give our support to individuals or entities looking to create a tax shelter. If a person cannot get at least 4 living people over the age of 21 that are willing to sign an affidavit under the penalties of perjury that they are a bona fide Church that lives up to the IRS’s own 14 point test, then we deny their application immediately. We’ve denied more applications than anyone knows with individuals trying to offer us everything you can think of for access to our support and we’ve denied ALL OF THEIR ATTEMPTS. If we even remotely smell someone coming that gives us the impression that they are either an individual trying to evade lawful taxes owed or an undercover informant trying to entrap us with promises of money, power or prestige for giving them our ministry and Corporation Sole support, we not only deny their application but we also permanently prohibit their access to our website by blocking their unique IP address. We ONLY work with legitimate BONA FIDE Churches.”
Church Freedom and the Corporation Sole needs to study these matters out and trash their ill-conceived ideas and schemes. They are not according to knowledge, as this booklet has made perfectly clear.
“This is why we need your help to spread the word about ChurchFreedom.org! We want to freely help support EVERY SINGLE Christian Church here in America. With your help, we’ve been able to directly support over 2,000 new Christian Churches this year alone. With your help, we can help FREE America’s Churches from 501c3 entirely.”
If Church Freedom and the Corporation Sole loves the Lord, then they need to study, grow in knowledge, understanding, and wisdom and repent. They need to contact all the churches they have helped, ask forgiveness, let them know the truth, and encourage them to trash their Affidavits, dissolve their corporations and organize according to Bible principles.
Notice that the above says, “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.” This is from IRS publications given below and is the correct position. Thus, the answer to the question of whether a church is automatically tax exempt is “No.” If the church does not meet the requirements of 501(c)(3) that church is not “tax exempt.”
Furthermore, according to principles in the Word of God, church tax exempt status is spiritual fornication since she has submitted herself to man’s law, become a temporal legal – as opposed to spiritual eternal only – entity, and chosen to submit to an authority other than the Lord Jesus Christ as to many church matters. A church can choose to remain under Christ only as a eternal spiritual organism as opposed to a temporal earthy organizaion. In America, the First Amendment and corresponding state constitutional provisions protect this choice from persecution. The essay below, and other essays, articles, and books on this website explain these matters more comprehensively.
Ignorance, and especially willful ignorance, is no excuse for dishonoring our Lord.
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”) as well as in other books and writings, I originally taught that a New Testament church could depend upon Internal Revenue Code (“IRC”) § 508(c)(1)(A) for her non-taxable status (See Endnote 1for links to the two free versions of God Betrayed or for ordering information should you desire a softback copy as well as information on other books and resources by Jerald Finney.). I was wrong. After years of study, I have learned that a New Testament church cannot depend upon 508(c)(1)(A) for her non-taxable status because, in so doing, the church gives up her New Testament and First Amendment status; the church becomes tax exempt as opposed to non-taxable. 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)/508(c)(1)(A) 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 biblical principles to include freedom of religion and conscience (separation of church and state), freedom of speech, freedom of press, and freedom of association. 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 a church in Tennessee 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 Organizations” also 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, “… no law ….”
Are not those words very clear? No law means “no law.” What is IRC § 508(c)(1)(A)? It, like IRC 501(c)(3), is a law made by Congress and signed by the President. IRC § 508(c)(1)(A) 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(c)(1)(A) or IRC § 501(c)(3)? One reason is lack of knowledge, wisdom, and understanding. When a church claims either 508(c)(1)(A) 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.
Let me repeat: First Amendment churches under God are non-taxable. 501(c)(3) and 508(c)(1)(A) 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 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(c)(1)(A) says churches are excepted from applying for IRC § 501(c)(3) tax exempt status (See Endnote 2for 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 on508(c)(1)(A) 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.
Second, to rely on 508(c)(1)(A) 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.
Obviously, 508(C)(1)(A) is a law made by Congress which regards an establishment of religion; 508(C)(1)(A) also prevents the free exercise of religion because a church which claims 508(C)(1)(A) status thereby submits themselves to some control by the federal government in that the church becomes subject to the rules that come with IRC 501(c)(3) status. 508(C)(1)(A) does not state that the First Amendment forbids Congress from making any law in violation of the First Amendment; and that, therefore, a church is non-taxable. 508(C)(1)(A) is a law made by Congress which states that Congress, by law, is declaring an exemption for churches. Thus, by a clear reading of the First Amendment, 508(C)(1)(A) is clearly 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(C)(1) (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 added.]
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(c)(1)(A) 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: The CUCM Bible Trust.
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 controlled or licensed by the state, “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
If a church does not apply for 501(c)(3) tax exempt status or claim 508(c)(1)(A) tax exempt status, and if she is organized as a New Testament church, 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. A church claims 508(c)(1)(A) status by giving IRS acknowledgements for tithes, offerings, and gifts. No matter what the civil government claims, a church who has no income cannot be taxed; 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. or the church (an unincorporated association).
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(c)(1)(A) exempt status, the government is granted some jurisdiction over the church since the civil government now, by law, 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 Biblically (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 Applicationwhich 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.
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.
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”) as well as in other books and writings, I originally taught that a New Testament church could depend upon Internal Revenue Code (“IRC”) § 508(c)(1)(A) for her non-taxable status (See Endnote 1for links to the two free versions of God Betrayed or for ordering information should you desire a softback copy as well as information on other books and resources by Jerald Finney.). I was wrong. After years of study, I have learned that a New Testament church cannot depend upon 508(c)(1)(A) for her non-taxable status because, in so doing, the church gives up her New Testament and First Amendment status; the church becomes tax exempt as opposed to non-taxable. 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)/508(c)(1)(A) 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 biblical principles to include freedom of religion and conscience (separation of church and state), freedom of speech, freedom of press, and freedom of association. 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 a church in Tennessee 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 Organizations” also 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, “… no law ….”
Are not those words very clear? No law means “no law.” What is IRC § 508(c)(1)(A)(“508“)? It, likeIRC 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(c)(1)(A) andIRC 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(c)(1)(A) orIRC § 501(c)(3)? One reason is lack of knowledge, wisdom, and understanding. When a church claims either 508(c)(1)(A) 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. SeeGod Betrayedfor teaching which explains this.
Let me repeat: First Amendment churches under God are non-taxable. 501(c)(3) and 508(c)(1)(A) 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 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(c)(1)(A) says churches are excepted from applying for IRC § 501(c)(3) tax exempt status (See Endnote 2for 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 on508(c)(1)(A) 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.
Second, to rely on 508(c)(1)(A) 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.
Obviously, 508(C)(1)(A) is a law made by Congress which regards an establishment of religion; 508(C)(1)(A) also prevents the free exercise of religion because a church which claims 508(C)(1)(A) status thereby submits themselves to some control by the federal government in that the church becomes subject to the rules that come with IRC 501(c)(3) status. 508(C)(1)(A) does not state that the First Amendment forbids Congress from making any law in violation of the First Amendment; and that, therefore, a church is non-taxable. 508(C)(1)(A) is a law made by Congress which states that Congress, by law, is declaring an exemption for churches. Thus, by a clear reading of the First Amendment, 508(C)(1)(A)is clearly 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(C)(1) (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 added.]
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(c)(1)(A)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: The CUCM Bible Trust.
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 controlled or licensed by the state, “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
If a church does not apply for 501(c)(3) tax exempt status or claim 508(c)(1)(A) tax exempt status, and if she is organized as a New Testament church, 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. A church claims 508(c)(1)(A) status by giving IRS acknowledgements for tithes, offerings, and gifts. No matter what the civil government claims, a church who has no income cannot be taxed; 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. or the church (an unincorporated association).
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(c)(1)(A) exempt status, the government is granted some jurisdiction over the church since the civil government now, by law, 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 Biblically (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 Applicationwhich 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.
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.
Does the Word of God teach that churches in America should get Internal Revenue Code Section 501(c)(3) (“501c3”) status? What about civil law? Does American law purportedly require that churches get 501c3 status? This article will answer those questions.
Since you will probably want to know something about Jerald Finney before you give any consideration to his positions, this article will begin by providing you with a brief profile of Finney. At the end of the article are links to important Internal Revenue Code laws concerning churches as well as an important note.
The author is a Christian first and a lawyer second. He has no motive to mislead you. In fact, his motivation is to tell you the truth about this matter, and he guards himself against temptation on this and other issues by doing all he does at no charge. He does not seek riches. His motivation is his love for God first and for others second. His goal is the Glory of God. Jerald Finney has been saved since 1982. God called him to go to law school for His Glory. In obedience, Finney entered the University of Texas School of Law in 1990, was licensed and began to practice law, for the Glory of God, in November of 1993. To learn more about the author click the following link: About Jerald Finney.
The Bible makes clear that God desires that Christians love Him and He tells them what it means to love God. The relationship between God and his children is very important to Him. Likewise, the love relationship between God and His churches is preeminent to Him. After all, “Christ loved the church and gave himself for it” (Ep. 5:25). Do you understand God’s definition of love? Jerald Finney has covered this subject in the booklet, The Most Important Thing: Loving God and/or Winning Souls? which is available on the Order Information on Books by Jerald Finney page of this website, and also free on this website at The Most Important Thing: Loving God and/or Winning Soulsin online form as well as inPDFform. Of course, if one loves God, he will win souls.
The author realizes that there are different interpretations of Scripture on any given subject—there are false interpretations and one true interpretation. Christians, including the author, should do everything possible to make sure they correctly divide Scripture since the Bible commands them to do so. In fact, the biblical way for a Christian to make sure that he is right about an issue was given to Timothy and to all Christians by Paul: “Study to shew thyself approved unto God, a workman that needeth not to be ashamed, rightly dividing the word of truth” (2 Ti. 2.15). Most Christians rely totally or heavily upon their pastors for leadership in instruction in spiritual matters. Sometimes, as is the case with the author, they rely upon their pastors and others, and are also called themselves to deal specifically with an issue.
To totally understand all the issues and sub-issues involved with the 501c3, 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.
With that said, let us now go to the issues—first the issue of the truth about civil government requirement that churches get 501c3 status. The unabashed truth is that civil government does not require churches in America to get 501c3 status. They do so completely voluntarily, just as they incorporate on a voluntary basis. Since there is absolutely no law that requires a church to get 501c3 status, no attorney, pastor, or anyone else can show you such a law.
Click the above to go to the article, “Is Separation of Church and State Found in the Constitution?
In fact, there is a law that clearly states that you do not have to get 501c3 status: The First Amendment to the United States Constitution. The First Amendmentto the United States Constitution prohibits the making of any lawrespecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering with the right to peaceably assemble or prohibiting the petitioning for a governmental redress of grievances. It was adopted on December 15, 1791, as one of the ten amendments that constitute the Bill of Rights. 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.“
When I first wrote this article, I stated thatInternal Revenue Code § 508 (“508”) is a law that protects churches and states that churches are an exception to getting 501c3 status. That law explicitly states that churches are an exception to the requirement that certain organizations get 501c3 status. However, after years of study, I am convinced that a church should never claim 508 status. A church should rely on the First Amendment to the United States Constitution, not on 508.
508 is a law made by the federal government that regards and establishment of religion and prevents the free exercise thereof. Therefore, a church that agrees to 508 status has agreed to place herself under a law which is unconstitutional as applied to churches (a law which violates the First Amendment when applied to churches) thereby waiving First Amendment status and also weakening the First Amendment. The federal government can also argue that churches who claim 508 status have agreed to the rules of 501c3, since the state may argue that the federal government is granting the exemption under 508 and the church chose to depend upon 508 instead of the First Amendment. The Internal Revenue Service completely understands the First Amendment implications as to churches. The Internal Revenue Service states in Internal Revenue Code Publication 1828: “Unlike churches, religious organizations that wish to be tax exempt generally must apply to the IRS for tax-exempt status unless their gross receipts do not normally exceed $5,000 annually.” One may argue that this interpretation of 508 is too explicit, but the devil is in the details, and the legal system is expert in arguing the details. See, for more thorough explanation, Church Internal Revenue Code § 508 Tax Exempt Status.
A 501c3 church also has many regulations which it is required to honor. See Publication 4221: Compliance Guide for Tax Exempt Organizations(“Federal tax law provides tax benefits to nonprofit organizations recognized as exempt from federal income tax under section 501(a) of the Internal Revenue Code (the Code). The Code requires that tax-exempt organizations comply with federal tax law to maintain tax-exempt status and avoid penalties….”).
In spite of the irrefutable fact that churches are not required to get 501c3, many Christians will tell you that Romans 13 requires that churches get 501c3 status. Of course, that is a ridiculous statement, since American law clearly gives each church a choice in the matter. No “ordinance of man” requires churches to get 501c3; therefore, churches cannot violate an ordinance which does not exist. To repeat, does God require that a church get 501c3? Of course not, and no “ordinance of man” purportedly requires man to get 501c3.
Another important question, although not at all relevant (as we have seen) to the issue of whether churches in America are required to get 501c3, is this: “If God is against a church obeying a certain civil law, even if the civil law purportedly requires churches to obey that law, is man to obey the civil law?” When one does an honest and systematic biblical study of the issues involved, the answer becomes very clear. The author has done such a study and has written and taught on this very issue. He has written four books that cover the biblical principles as well as history and law. Again, those books are available free on this website in online form as well as in PDF form or may be ordered in paperback. See Order information, free PDF, and free online version page for books by Jerald Finney.
This article will just mention a few Biblical principles and teachings. Clearly, when a man-made law conflicts with God’s law, Christians are instructed by God to obey God’s law. All the apostles, except John, were martyred for adhering to this principle. Likewise, as mentioned above, Christians down through the ages in and since the primitive church have stood on this principle.
The Bible teaches that God is sovereign over all, and that He ordained all powers that be. Thus, God established or ordained civil government. He gave civil government the responsibility for ruling over men, under Him. He also gave man free will. Since civil government is run by a man, or by men, civil government, like man, is free, under God to honor or dishonor Him and His principles. Of course, God desires that civil government honor Him, but sadly, civil governments rarely do so, and they never permanently do so in this age. This is the clear teaching of history.
To interpret Romans 13 and other verses to mean that Christians are to obey all civil laws which contradict God’s law would mean that Romans 13 is inconsistent in both the immediate and overall context of Scripture. Many Old Testament characters, the apostles, God, God’s own angels, and Christians throughout the last 2000 years who have refused to honor laws of men which require God’s children to submit to man rather than to proceed under God only in certain matters, violated the modern American interpretation of Romans 13. The author goes into all the details on this matter in Render unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses and in God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (The book is in online form atRender unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses. Also, click the following links for other articles which teach on this matter: Separation of Church and God, American Abuse of Romans 13:1-2, An Abridged History of the First Amendment.
In conclusion, churches who get 501c3 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. How important is that relationship to you and your church?
You can read the following Internal Revenue Code laws online by clicking the following links:
1.§ 501(c)(3). Exemption from tax on corporations, certain trusts, etc. 2.§ 508. Special rules with respect to section 501(c)(3) organizations 3.§ 7611. Restrictions on church tax inquiries and examinations 4.§ 1402. [Dealing with taxes on income of pastors] 5.§ 107. Rental value of parsonages 6.§ 102. Gifts and inheritances (According to Internal Revenue Code § 102tithes and offerings are gifts and, therefore, , not income) 7.§ 2503. Taxable gifts 8.§ 170. Charitable, etc., contributions and gifts
Note. Should you desire to know how your church can organize according to both biblical principles and also within the parameters of American law contact Jerald Finney, a licensed lawyer. Click here for contact information for Jerald Finney.
All conclusions in this article are opinions of the author. 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. You can always find a lawyer or Christian who will agree with the position that an American church should become incorporated and get 501(c)(3) status. Jerald Finney will discuss the matter, as time avails, with any such person, with confidence that his position is supported by God’s Word, history, and law. He is always willing, free of charge and with love, to support his belief that for a church to submit herself to civil government in any manner grieves our Lord and ultimately results in undesirable consequences. He does not have unlimited time to talk to individuals. However, he will teach or debate groups, and will point individuals to resources which fully explain his positions.
Preliminary note. The author has made significant revisions to this article as his knowledge grows with continued study. The original title to the article, “Laws Protecting New Testament Churches: Read Them for Yourself,” was changed to “First Amendment Protection of New Testament Churches/Federal Laws Protecting State Churches (Religious Organizations)” on July 13, 2015.
You can always find a lawyer or Christian who will agree with the position that an American church should become a religious organization by becoming a legal entity such as a non-profit corporation (included corporation sole), unincorporated association, charitable trust, etc. and get 501(c)(3) or 508 status. Jerald Finney will discuss the matter, as time avails, with any such person, with confidence that his position is supported by God’s Word, history, and law. He is always willing, free of charge and with love, to support his belief that for a church to submit herself to civil government in any manner grieves our Lord and ultimately results in undesirable consequences. He does not have unlimited time to talk to individuals. However, he will teach or debate groups, and will point individuals to resources which fully explain his positions.
You may go directly to a link (letters in maroon), or, to save time, you may read only the relevant portions of a provision or law which are in the article below.
Virginia Passes Legislation Forcing Churches to Allow “Transgender” Males into Women’s Bathrooms(04720)(Of course, this will be contested in court. Regardless of the outcome of such contest(s), keep in mind that the established church (incorporated, 501(c)(3) or 501(c)(1)(A) churches have voluntarily given up much of their First Amendment protections and placed themselves under the 14th Amendment for many purposes. Churches who choose to remain under the First Amendment for all purposes are not subject to state legislation. Contact this Churches under Christ Ministry for more information.)
Contents:
Note. At the very end is an excellent Facebook comment on “What happens if we abuse liberty” by Herei Stand on October 16, 2015.
I. Introduction II. The Highest Law: God’s Law III. United States Law: Man’s Law A. The First Amendment to the United States Constitution B. The Internal Revenue Service Code 1.§ 501(c)(3). Exemption from tax on corporations, certain trusts, etc. 2.§ 508. Special rules with respect to section 501(c)(3) organizations 3.§ 7611. Restrictions on church tax inquiries and examinations 4.§ 1402. [Dealing with taxes on income of pastors] 5.§ 107. Rental value of parsonages 6.§ 102. Gifts and inheritances (According to Internal Revenue Code § 102tithes and offerings are gifts and, therefore, , not income) 7.§ 2503. Taxable gifts 8.§ 170. Charitable, etc., contributions and gifts
The author is completely aware that most “Christians” and “Christian” lawyers tell churches to incorporate, get 501(c)(3) or 508 status or to become a legal entity in some other manner. The author takes issue with those lawyers and Christians and has written and taught extensively on the God-given principles concerning church and state and the application of those principles in America.
Those of you who do not know the author cannot be expected to trust him. Therefore, in order that a Christian can see for himself what the law says, this article will lay out the law which protects New Testament (the First Amendment) churches, and the laws which allegedly protect state churches. The First Amendment (quoted below) says that Congress shall make “no law” as to certain matters. Yet, 501(c)(3) (and 508) is a law which does exactly what the First Amendment forbids, as to churches. When a church submits herself to either of those laws, she becomes a religious organization (according to the explicit words in those laws) and subjects herself to the rules that come with those laws. The federal government, specifically the Internal Revenue Service, becomes sovereign of a 501(c)(3) or 508 church for certain purposes and enforces the rules that come with 501(c)(3) at its discretion; indeed, as will be seen, the IRS can add rules, having already added one rule which was contested and upheld the Supreme Court. Having succumb to the sovereignty of the federal government for some purposes through willing submission to 501(c)(3) law, the federal government added other laws to the Internal Revenue Code to protect religious organizations to a degree from arbitrary actions by the Internal Revenue Service.
A church which is a legal entity such as in incorporated church and or which gets Internal Revenue Code Section 501(c)(3) status loses much of her First Amendment protection and places herself under the Fourteenth Amendment to a large degree; the author fully explains this in his teachings on this website. One can go directly online to the laws in their entirety by clicking the blue underlined links.
In case you are not aware of it, an American church can operate as a spiritual entity only, under the First Amendment, without persecution, under God as a non-legal entity (as a spiritual entity) instead of a legal entity such as a non-profit corporation, charitable trust, unincorporated association, or corporation sole and without Internal Revenue Code Section (“IRC”) 501(c)(3) (“501(c)(3)” or Section 508 (“508”) status.FN1
New Testament churches are protected, for the time being, by the First Amendment which is a statement of Bible principle and, therefore, in line with God’s law. State churches and other religious organizations – the protection of the First Amendment and God not being enough for them to attain their worldly temporal goals (they think) – have turned to laws which contradict the First Amendment for protection. In so doing, they have shunned the protection of God and the First Amendment for many purposes. The chickens are coming home to roost.
II. The Highest Law: God’s Law
Of course, the highest law that protects churches everywhere, including churches in America, is God’s law as laid out in His Word. Although, in many nations, churches who wish to operate under God only will suffer persecutions, including physical death, for honoring God and His principles of organization and operation, no civil government can take the life or liberty of a true Christian or destroy a true church. The author has done a complete systematic study God’s principles concerning church and state in his other works.FN2
No nation gives anyone or any church life or liberty. Nations choose whether to protect the God-given life and liberty of individuals and churches from persecution.
God, the highest authority, establishes His churches and gives life to believers only:
“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” (Matthew 16:18).
“He that hath the Son hath life; and he that hath not the Son of God hath not life” (1 John 5:12).
“While we look not at the things which are seen, but at the things which are not seen: for the things which are seen are temporal; but the things which are not seen are eternal. For we know that if our earthly house of this tabernacle were dissolved, we have a building of God, an house not made with hands, eternal in the heavens. For in this we groan, earnestly desiring to be clothed upon with our house which is from heaven: If so be that being clothed we shall not be found naked. For we that are in this tabernacle do groan, being burdened: not for that we would be unclothed, but clothed upon, that mortality might be swallowed up of life. Now he that hath wrought us for the selfsame thing is God, who also hath given unto us the earnest of the Spirit. Therefore we are always confident, knowing that, whilst we are at home in the body, we are absent from the Lord: (For we walk by faith, not by sight:) We are confident, I say, and willing rather to be absent from the body, and to be present with the Lord.” (2 Corinthians 4.18; 5.1-6, 7-8; See also, Romans 8.18-25.).
Additionally, only Christ gives liberty to believers, and only to believers who continue in His Word:
“The Spirit of the Lord is upon me, because he hath anointed me to preach the gospel to the poor; he hath sent me to heal the brokenhearted, to preach deliverance to the captives, and recovering of sight to the blind, to set at liberty them that are bruised” (Luke 4:18).
“Then said Jesus to those Jews which believed on him, If ye continue in my word, thenare ye my disciples indeed; And ye shall know the truth, and the truth shall make you free” (John 8:31-32).
“If the Son therefore shall make you free, ye shall be free indeed” (John 8:36).
“Being then made free from sin, ye became the servants of righteousness” (Romans 6:18).
“But now being made free from sin, and become servants to God, ye have your fruit unto holiness, and the end everlasting life” (Romans 6:22).
“For the law of the Spirit of life in Christ Jesus hath made me free from the law of sin and death” (Romans 8:2).
“Because the creature itself also shall be delivered from the bondage of corruption into the glorious liberty of the children of God” (Romans 8:21).
“For he that is called in the Lord, being a servant, is the Lord’s freeman: likewise also he that is called, being free, is Christ’s servant” (1 Corinthians 7:22)
“For though I be free from all men, yet have I made myself servant unto all, that I might gain the more” (1 Corinthians 9:19).
“Now the Lord is that Spirit: and where the Spirit of the Lord is, there is liberty” (2 Corinthians 3:17).
“And that because of false brethren unawares brought in, who came in privily to spy out our liberty which we have in Christ Jesus, that they might bring us into bondage” (Galatians 2:4).
“So then, brethren, we are not children of the bondwoman, but of the free” (Galatians 4:31).
“Stand fast therefore in the liberty wherewith Christ hath made us free, and be not entangled again with the yoke of bondage” (Galatians 5:1).
“For, brethren, ye have been called unto liberty; only use not liberty for an occasion to the flesh, but by love serve one another” (Galatians 5:13).
“But whoso looketh into the perfect law of liberty, and continueth therein, he being not a forgetful hearer, but a doer of the work, this man shall be blessed in his deed” (James 1:25).
“While they promise them liberty, they themselves are the servants of corruption: for of whom a man is overcome, of the same is he brought in bondage” (2 Peter 2:19).
Christians are to walk in the spirit, not in the flesh.(See, e.g., 1 Corinthians 2; 3.1-3; Galatians 5, Romans 6-8). Most do not. New Testament churches are spiritual organisms, not earthly entities. Thus, an incorporated, 501(c)(3) or 508 church has violated God’s principles by placing herself, at least partially, under a head other than the Lord Jesus Christ. For systematic studies of all the arguments used to justify submission of individuals and churches to civil government see FN3.
The Martyrs of the faith clearly understood the liberty given them by Jesus Christ.
A. The First Amendment to the United States Constitution
Man’s law is below God’s law. Again, God gives civil governments the option of honoring Him and His principles. America, as a result of a great theological warfare between persecuted dissenters (the persecutions were carried out by colonial governments acting under the guidance of the established churches and their theologies) and the established churches, became the first nation, the second civil government behind the colony of Rhode Island, to apply God’s principles concerning the relationship between church and state and the individual person and the state and to guarantee religious liberty. This was done in the First Amendment to the United States Constitution (the second highest law in America after God’s law) which reads as follows:
First Amendment to the United States Constitution
“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 peaceable to assemble, and to petition the Government for a redress of grievances.” FN4
The following lay out the history of the First Amendment:
The First Amendment did not originally apply to the states. As a result, states were free to pass laws which provided state corporate status to churches, and they did so. Many churches ran down to incorporate under state law soon after the Constitution and First Amendment were ratified.FN5 Some did not incorporate or become state churches.
Although the United States Supreme Court has now applied the First Amendment to state and other lower governments, incorporation of churches by state statute has never been held to violate the First Amendment, even though incorporation of churches is contrary to the First Amendment as well as Bible principles.
Churches which become legal entities such as corporations (includes corporation sole), unincorporated associations, charitable trusts, 501c3 and 508 religious organizations lose much or their First Amendment protections and fall, as artificial persons, under the Fourteenth Amendment for many purposes.
Churches which are spiritual entities only are New Testament churches and have the protections of the First Amendment. As we know, First Amendment protections enjoyed since 1791, the date of adoption, are targeted for destruction. When the First Amendment is destroyed, God’s churches, as opposed to state churches (churches which are legal entities) will have no choice but to operate underground, much as the churches in China, North Korea and many other countries, especially in many Muslim countries operate.
B. Internal Revenue Code
Once a church becomes a religious organization under Internal Revenue Code, Section 501(c)(3) or Section 508, she does have some protection from arbitrary attack by the federal government for some purposes. Such protections are not needed by a First Amendment church since that church is under God only. After the government destroys First Amendment protections for churches and believers, they will have to go underground to maintain their New Testament status.
Ҥ 501. Exemption from tax on corporations, certain trusts, etc.:
“(a) Exemption from taxation. An organization described in subsection (c) … shall be exempt from taxation under this subtitle [26 USCS §§ 1 et seq.] unless such exemption is denied under section 502 or 503 [26 USCS § 502 or 503]….
“(c)(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office….
“(h) Expenditures by public charities to influence legislation. (1) General rule. In the case of an organization to which this subsection applies, exemption from taxation under subsection (a) shall be denied because a substantial part of the activities of such organization consists of carrying on propaganda, or otherwise attempting, to influence legislation….”
In the twentieth century, the United States passed § 501(c)(3), a law which, when applied to churches or any other religious organization, “respects an establishment of religion” and prevents “the free exercise thereof.” 501(c)(3) may be utilized by earthly and religious organizations. A church is not required to get 501(c)(3) and 508 status, but that status is available for any church who wants it. That a church is not required, by civil law, to obtain 501(c)(3) status is made clear by the First Amendment. When a church chooses to get 501(c)(3) or 508 status, she has—in addition to placing herself under state authority through incorporation or some other means—also placed herself under the authority of the Federal government. For more on 508 status, seeChurch Internal Revenue Code § 508 Tax Exempt Status.
When a church gets 501(c)(3) or 508 status, that church becomes a religious organization. Churches who have 501(c)(3) or 508 tax-exempt status are under four rules which are stated in the 501(c)(3) law. Those rules or laws prevent the free exercise of religion under God by churches.
One can see four requirements in 501(c)(3) by reading the law above. Those rules are:
1. must be organized and operated exclusively for religious, educational, scientific, or other charitable purposes,
2. net earnings must not inure to the benefit of any private individual or shareholder,
3. no substantial part of its activity may be attempting to influence legislation,
4. the organization may not intervene in political activity.
Those four rules for religious organizations were in the law made by Congress and signed by President Eisenhower. All 501(c)(3) and 508 religious and other organizations are required to comply with the requirements. Congress and the President are free to put other requirements into law in the future. You see, they are the sovereigns elected by the people. They decided to dishonor God’s law first and the First Amendment second when they made 501(c)(3) and 508 status available to churches. Churches who incorporate and get 501(c)(3) or 508 status dishonor God and place themselves under two other sovereigns. Of course, they still have some of their God-ordained freedom, but they have voluntarily given up some of those freedoms as they have submitted to other sovereigns.
Not only have Congress and the President added requirements to 501(c)(3) since its initial passage into law, the Internal Revenue Service has also added a requirement to the law which was approved by Supreme Court opinion. The case considered an action—deemed to violate fundamental public policy—by Bob Jones University, an incorporated 501(c)(3) religious organization.FN6 Of course, Bob Jones University was not a church, but a future Supreme Court could easily declare that the new requirement applies to churches, and a future Court could add additional requirements to 501(c)(3). The new requirement is this:
“the organization’s purposes and activities may not be illegal or violate fundamental public policy.”FN7
An old adage in the law says, “Ignorance of the law is no excuse.” In other words, just because one is ignorant of the law does not excuse one from obeying it, especially when one was not required to submit to a law but did so voluntarily. Christians are instructed to proceed with knowledge (See, e.g., 2 Peter 1.3-10). Christians are also to have integrity. If they agree to something, they are to keep their part of the contract or bargain. Corporate 501(c)(3) churches contract with the state when they incorporate, the state being the controlling party to the contracts created by incorporation—in the event of disagreement or suit because over contract, civil courts will decide the issue. Those courts will decide such issues based upon man’s law, not Biblical principle.
Likewise, when a church, of her own free will, obtains 501(c)(3) or 508 status, she agrees (whether she knows it or not) both to be bound by the rules in existence at the time she receives state exemption and any rules which may be handed down after obtaining the status. Only ignorance prevents her from recognizing that, in the event of disagreement with IRS assertion that an action of the church is in violation of the statute, the state (not God) will decide the issue.
IRC § 508 (the codification of Public Law 91-172 ratified in 1969) provides in relevant part:
Ҥ 508. Special rules with respect to section 501(c)(3) organizations.
“(a) New organizations must notify secretary that they are applying for recognition of section 501(c)(3) status.
“(c) Exceptions. [Emphasis mine.]
“(1) Mandatory exceptions. Subsections (a) and (b) shall not apply to—
“(A) churches, their integrated auxiliaries, and conventions or associations of churches.” FN8 [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, the federal government recognized by law that churches are non-taxable; and, therefore, that churches are an exception to the civil government requirement that certain organizations file for 501(c)(3) tax exempt status.
Churches should claim First Amendment, not § 508 status. By claiming § 508 status, a church has claimed the protection of a law made by the federal government. Remember what the First Amendment states: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof….” § 508 is a law respecting an establishment of religion (and likely may be used to prevent the free exercise thereof) made by Congress and is therefore unconstitutional. By claiming § 508 status, a church thereby agrees that, should an issue regarding that church end up in court, that the court may look at § 508 and interpret issues from the perspective of § 508. In other words, the court will define the terms and determine the relevance and meaning of § 508 and the words therein rather than looking at the First Amendment and clear language of that amendment which was written so that anyone can understand it and make the applications. For example, the court would tell the litigants what the term “exception” means. Also, by claiming § 508 status, a church may be argued to have made itself a legal entity required to abide by the rules that come along with § 501(c)(3) in order to maintain their “tax exempt” status. First Amendment churches are non-taxable whereas § 501(c)(3) churches are “tax-exempt.” For more on this, see Church Internal Revenue Code § 508 Tax Exempt Status.
Churches who remain under God and His principles for churches (First Amendment churches) even if there were no First Amendment are non-taxable anyway because they are not businesses, they are not legal entities of any type, and they have no income and make no profits. Even businesses pay no taxes if they make no profit. To make a profit, income must exceed expenses and deductions. A legal entity, such as a corporate 501(c)(3) religious organization, who poses as a church, who is in business(es), and who makes a profit should, in the opinion of the author, pay taxes.
New Testament (First Amendment) churches are not legal entities, so they cannot and do not receive income. Church members give tithes and offerings to God and which are used for certain purposes and ministries approved by God; for providing for their pastor; for providing for a place to meet; for helping the poor; and for any other purpose consistent with Biblical principle.
If a church does not apply for exempt status, and if it is organized as and operates in conformity to Biblical principle, according to the First Amendment which agrees with the Biblical principle of separation of church and state, the church maintains her non-taxable status.
If a church successfully applies for exempt status under section 501(c)(3) or claims exemption under § 508, the government is granted some jurisdiction over the church since the civil government now declares and grants an exemption.
IRC § 7611 gives the only reasons for which the Internal Revenue Service can audit a religious organization defined as a church by the federal government. Of course, a New Testament church is not a legal entity, has no income, and cannot be audited. All tithes, offerings, and gifts by church members are given to God, not to a religious organization such as an incorporated 501(c)(3) or 508 church. There are not church (religious organization) books to keepl IRC § 7611 states in relevant part:
Ҥ 7611. Restrictions on church tax inquiries and examinations
“(a) Restrictions on inquiries.— “(1) In general.—The Secretary may begin a church tax inquiry only if—
“(A) the reasonable belief requirements of paragraph (2), and
“(B) the notice requirements of paragraph (3), have been met. “(2) Reasonable belief requirements.—The requirements of this paragraph are met with respect to any church tax inquiry if an appropriate high-level Treasury official reasonably believes (on the basis of facts and circumstances recorded in writing) that the church – “(A) may not be exempt, by reason of its status as a church, from tax under section 501(a), or “(B) may be carrying on an unrelated trade or business (within the meaning of section 513) or otherwise engaged in activities subject to taxation under this title. “(3) Inquiry notice requirements.— “(A) In general.—The requirements of this paragraph are met with respect to any church tax inquiry if, before beginning such inquiry, the Secretary provides written notice to the church of the beginning of such inquiry. “(B) Contents of inquiry notice.—The notice required by this paragraph shall include— “(i) an explanation of— “(I) the concerns which gave rise to such inquiry, and “(II) the general subject matter of such inquiry, and “(ii) a general explanation of the applicable— “(I) administrative and constitutional provisions with respect to such inquiry (including the right to a conference with the Secretary before any examination of church records), and “(II) provisions of this title which authorize such inquiry or which may be otherwise involved in such inquiry.
“(b) Restrictions on examinations.— “(1) In general.—The Secretary may begin a church tax examination only if therequirements of paragraph (2) have been met and such examinationmay be made only— “(A) in the case of church records, to the extent necessary to determine the liability for, and the amount of, any tax imposed by this title, and “(B) in the case of religious activities, to the extent necessary to determine whether an organization claiming to be a church is a church for any period. “(2) Notice of examination; opportunity for conference.—The requirements of this paragraph are met with respect to any church tax examination if— “(A) at least 15 days before the beginning of such examination, the Secretary provides the notice described in paragraph (3) to both the church and the appropriate regional counsel of the Internal Revenue Service, and “(B) the church has a reasonable time to participate in a conference described in paragraph (3)(A)(iii), but only if the church requests such a conference before the beginning of the examination. “(3) Contents of examination notice, et cetera.— “(A) In general.—The notice described in this paragraph is a written notice which includes – “(i) a copy of the church tax inquiry notice provided to the church under subsection (a), “(ii)a description of the church records and activities which the Secretary seeks to examine, “(iii)an offer to have a conference between the church and the Secretary in order to discuss, and attempt to resolve, concerns relating to such examination, and “(iv)a copy of all documents which were collected or prepared by the Internal Revenue Service for use in such examination and the disclosure of which is required by the Freedom of Information Act (5 U.S.C. 552). “(B)Earliest day examination notice may be provided.—The examination notice described in subparagraph (A) shall not be provided to the church before the 15th day after the date on which the church tax inquiry notice was provided to the church under subsection (a). “(C)Opinion of regional counsel with respect to examination Any regional counsel of the Internal Revenue Service who receives an examination notice under paragraph (1) may, within 15 days after such notice is provided, submit to the regional commissioner for the region an advisory objection to the examination. “(4) Examination of records and activities not specified in notice.—Within the course of a church tax examination which (at the time the examination begins) meets the requirements of paragraphs (1) and (2), the Secretary may examine any church records or religious activities which were not specified in the examination notice to the extent such examination meets the requirement of subparagraph (A) or (B) of paragraph (1) (whichever applies).
(c) Limitation on period of inquiries and examinations.— “(1) Inquiries and examinations must be completed within 2 years.— “(A) In general.—The Secretary shall complete any church tax status inquiry or examination (and make a final determination with respect thereto) not later than the date which is 2 years after the examination notice date. “(B) Inquiries not followed by examinations.—In the case of a church tax inquiry with respect to whichthere is no examination notice under subsection (b), theSecretary shall complete such inquiry (and make a finaldetermination with respect thereto) not later than the datewhich is 90 days after the inquiry notice date. “(2) Suspension of 2-year period.—The running of the 2-year period described in paragraph (1)(A)and the 90-day period in paragraph (1)(B) shall be suspended – “(A) for any period during which— “(i) a judicial proceeding brought by the church against the Secretary with respect to the church tax inquiry or examination is pending or being appealed, “(ii) a judicial proceeding brought by the Secretary against the church (or any official thereof) to compel compliance with any reasonable request of the Secretary in a church tax examination for examination of church records or religious activities is pending or being appealed, or “(iii) the Secretary is unable to take actions with respect to the church tax inquiry or examination by reason of an order issued in any judicial proceeding brought under section 7609, “(B) for any period in excess of 20 days (but not in excess of 6 months) in which the church or its agents fail to comply with any reasonable request of the Secretary for church records or other information, or “(C) for any period mutually agreed upon by the Secretary and the church.
“(d) Limitations on revocation of tax-exempt status, etc.— “(1) In general.—The Secretary may— “(A) determine that an organization is not a church which— (i) is exempt from taxation by reason of section 501(a), or (ii) is described in section 170(c), or “(B)(i) send a notice of deficiency of any tax involved in a church tax examination, or “(ii) in the case of any tax with respect to which subchapter B of chapter 63 (relating to deficiency procedures) does not apply, assess any underpayment of such tax involved in a church tax examination, only if the appropriate regional counsel of the Internal Revenue Service determines in writing that there has been substantial compliance with the requirements of this section and approves in writing of such revocation, notice of deficiency, or assessment. (2) Limitations on period of assessment.— “(A) Revocation of tax-exempt status.— (i) 3-year statute of limitations generally.—In the case of any church tax examination with respect to the revocation of tax-exempt status under section 501(a), any tax imposed by chapter 1 (other than section 511) may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, only for the 3 most recent taxable years ending before the examination notice date. “(ii)6-year statute of limitations where tax-exempt status revoked.—If an organization is not a church exempt from tax under section 501(a) for any of the 3 taxable years described inclause (i), clause (i) shall be applied by substituting “6most recent taxable years” for “3 most recent taxable years”. “(B) Unrelated business tax.—In the case of any church tax examination with respect to thetax imposed by section 511 (relating to unrelated businessincome), such tax may be assessed, or a proceeding in court forthe collection of such tax may be begun without assessment,only with respect to the 6 most recent taxable years endingbefore the examination notice date. “(C) Exception where shorter statute of limitations otherwise applicable.—Subparagraphs (A) and (B) shall not be construed to increasethe period otherwise applicable under subchapter A of chapter66 (relating to limitations on assessment and collection). “(e) Information not collected in substantial compliance with procedures to stay summons proceeding.—
“(1) In general.—If there has not been substantial compliance with— “(A) the notice requirements of subsection (a) or (b), “(B) the conference requirement described in subsection
(b)(3)(A)(iii), or “(C) the approval requirement of subsection (d)(1) (if applicable), with respect to any church tax inquiry or examination, any proceeding to compel compliance with any summons with respect to such inquiry or examination shall be stayed until the court finds that all practicable steps to correct the noncompliance have been taken. The period applicable under paragraph (1) or subsection (c) shall not be suspended during the period of any stay under the preceding sentence. “(2) Remedy to be exclusive.—No suit may be maintained, and no defense may be raised in anyproceeding (other than as provided in paragraph (1)), by reasonof any noncompliance by the Secretary with the requirements ofthis section. “(f) Limitations on additional inquiries and examinations.— “(1) In general.—If any church tax inquiry or examination with respect to anychurch is completed and does not result in— “(A) a revocation, notice of deficiency, or assessment described in subsection (d)(1), or “(B) a request by the Secretary for any significant change in the operational practices of the church (including the adequacy of accounting practices),
no other church tax inquiry or examination may begin with respect to such church during the applicable 5-year period unless such inquiry or examination is approved in writing by the Secretary or does not involve the same or similar issues involved in the preceding inquiry or examination. For purposes of the preceding sentence, an inquiry or examination shall be treated as completed not later than the expiration of the applicable period under paragraph (1) of subsection (c).
“(2) Applicable 5-year period.—For purposes of paragraph (1), the term “applicable 5-year period” means the 5-year period beginning on the date the notice taken into account for purposes of subsection (c)(1) was provided. For purposes of the preceding sentence, the rules of subsection (c)(2) shall apply.
“(g) Treatment of final report of revenue agent.—Any final report of an agent of the Internal Revenue Serviceshall be treated as a determination of the Secretary underparagraph (1) of section 7428(a), and any church receiving such areport shall be treated for purposes of sections 7428 and 7430 ashaving exhausted the administrative remedies available to it. “(h) Definitions.—For purposes of this section— “(1) Church.—The term “church” includes— “(A)any organization claiming to be a church, and “(B)any convention or association of churches. “(2) Church tax inquiry.—The term “church tax inquiry” means any inquiry to a church(other than an examination) to serve as a basis for determiningwhether a church – “(A)is exempt from tax under section 501(a) by reason of its status as a church, or “(B)is carrying on an unrelated trade or business (within the meaning of section 513) or otherwise engaged in activities which may be subject to taxation under this title. “(3) Church tax examination.—The term “church tax examination” means any examination forpurposes of making a determination described in paragraph (2) of— “(A) church records at the request of the Internal Revenue Service, or “(B) the religious activities of any church. “(4) Church records.— “(A) In general.—The term “church records” means all corporate and financialrecords regularly kept by a church, including corporate minutebooks and lists of members and contributors. “(B) Exception.—Such term shall not include records acquired – “(i) pursuant to a summons to which section 7609 applies, or “(ii) from any governmental agency. “(5) Inquiry notice date.—The term “inquiry notice date” means the date the notice with respect to a church tax inquiry is provided under subsection (a). “(6) Examination notice date.—The term “examination notice date” means the date the notice with respect to a church tax examination is provided under subsection (b) to the church. “(7) Appropriate high-level Treasury official.—The term “appropriate high-level Treasury official” means theSecretary of the Treasury or any delegate of the Secretary whoserank is no lower than that of a principal Internal Revenueofficer for an internal revenue region. “(i) Section not to apply to criminal investigations, etc.—This section shall not apply to— “(1) any criminal investigation, “(2) any inquiry or examination relating to the tax liability of any person other than a church, “(3) any assessment under section 6851 (relating to termination assessments of income tax), section 6852 (relating to termination assessments in case of flagrant political expenditures of section 501(c)(3) organizations), or section 6861 (relating to jeopardy assessments of income taxes, etc.), “(4) any willful attempt to defeat or evade any tax imposed by this title, or “(5) any knowing failure to file a return of tax imposed by this title.”
Note.A New Testament church cannot have employees as defined by American law. If a church has employees, she is a religious organization. Biblical principle defines a church, her members and their roles, and her destiny. No Biblical teaching is consistent with a church having employees. According to God’s Word, however, a New Testament church must have members and a pastor who is to be provided for by the members. Also, members or anyone else may give gifts to anyone they please.
The following is directly from IRC § 1402:
Ҥ 1402. Definitions
“(a) Net earnings from self-employment.—The term “net earnings from self-employment” means the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business, plus his distributive share (whether or not distributed) of income or loss described in section 702 (a)(8) from any trade or business carried on by a partnership of which he is a member; except that in computing such gross income and deductions and such distributive share of partnership ordinary income or loss—”…
“(8)an individual who is a duly ordained, commissioned, or licensed minister of a church or a member of a religious order shall compute his net earnings from self-employment derived from the performance of service described in subsection (c)(4) without regard to section 107 (relating to rental value of parsonages), section 119 (relating to meals and lodging furnished for the convenience of the employer), and section 911 (relating to citizens or residents of the United States living abroad), but shall not include in such net earnings from self-employment the rental value of any parsonage or any parsonage allowance (whether or not excludable under section 107) provided after the individual retires, or any other retirement benefit received by such individual from a church plan (as defined in section 414 (e)) after the individual retires; “… “(14) in the case of church employee income, the special rules of subsection (j)(1) shall apply; “… “(b)Self-employment income.—The term “self-employment income” means the net earnings from self-employment derived by an individual (other than a nonresident alien individual, except as provided by an agreement under section 233 of the Social Security Act) during any taxable year; except that such term shall not include—
“…
“(2) the net earnings from self-employment, if such net earnings for the taxable year are less than $400.
“(c) Trade or business.—The term “trade or business”, when used with reference to self-employment income or net earnings from self-employment, shall have the same meaning as when used in section 162 (relating to trade or business expenses), except that such term shall not include—
“…
“(2) the performance of service by an individual as an employee, other than—
“…
“(D) service described in paragraph (4) of this subsection,
“… “(4) the performance of service by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order;
The provisions of paragraph (4) or (5) shall not apply to service (other than service performed by a member of a religious order who has taken a vow of poverty as a member of such order) performed by an individual unless an exemption under subsection (e) is effective with respect to him.
“(d) Employee and wages.—The term “employee” and the term “wages” shall have the same meaning as when used in chapter 21 (sec. 3101 and following, relating to Federal Insurance Contributions Act).
“(e) Ministers, members of religious orders, and Christian Science practitioners.— “(1) Exemption.—Subject to paragraph (2), any individual who is (A) a duly ordained, commissioned, or licensed minister of a church or a member of a religious order (other than a member of a religious order who has taken a vow of poverty as a member of such order) or (B) a Christian Science practitioner, upon filing an application (in such form and manner, and with such official, as may be prescribed by regulations made under this chapter) together with a statement that either he is conscientiously opposed to, or because of religious principles he is opposed to, the acceptance (with respect to services performed by him as such minister, member, or practitioner) of any public insurance which makes payments in the event of death, disability, old age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the benefits of any insurance system established by the Social Security Act) and, in the case of an individual described in subparagraph (A), that he has informed the ordaining, commissioning, or licensing body of the church or order that he is opposed to such insurance, shall receive an exemption from the tax imposed by this chapter with respect to services performed by him as such minister, member, or practitioner. Notwithstanding the preceding sentence, an exemption may not be granted to an individual under this subsection if he had filed an effective waiver certificate under this section as it was in effect before its amendment in 1967.
“…
“(g) Members of certain religious faiths.— “(1) Exemption.—Any individual may file an application (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) for an exemption from the tax imposed by this chapter if he is a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the benefits of any insurance system established by the Social Security Act). Such exemption may be granted only if the application contains or is accompanied by—
“…
“(h)Regular basis.—An individual shall be deemed to be self-employed on a regular basis in a taxable year, or to be a member of a partnership on a regular basis in such year, if he had net earnings from self-employment, as defined in the first sentence of subsection (a), of not less than $400 in at least two of the three consecutive taxable years immediately preceding such taxable year from trades or businesses carried on by such individual or such partnership.
“…
“(j)Special rules for certain church employee income.— “(1) Computation of net earnings.—In applying subsection (a)—
“(A) church employee income shall not be reduced by any deduction;
“(B) church employee income and deductions attributable to such income shall not be taken into account in determining the amount of other net earnings from self-employment.
“…
“(4) Church employee income defined.—For purposes of this section, the term “church employee income” means gross income for services which are described in section 3121 (b)(8)(B) (and are not described in section 3121 (b)(8)(A)).”
“In the case of a minister of the gospel, gross income does not include—
“(1) the rental value of a home furnished to him as part of his compensation; or
“(2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.”
“(a) General rule “Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.
“(b) Income “Subsection (a) shall not exclude from gross income—
“(1) the income from any property referred to in subsection (a); or
“(2) where the gift, bequest, devise, or inheritance is of income from property, the amount of such income.
“Where, under the terms of the gift, bequest, devise, or inheritance, the payment, crediting, or distribution thereof is to be made at intervals, then, to the extent that it is paid or credited or to be distributed out of income from property, it shall be treated for purposes of paragraph (2) as a gift, bequest, devise, or inheritance of income from property. Any amount included in the gross income of a beneficiary under subchapter J shall be treated for purposes of paragraph (2) as a gift, bequest, devise, or inheritance of income from property….”
“§ 2503. Taxable gifts “(a) General definition. The term ‘taxable gifts’ means the total amount of gifts made during the calendar year, less the deductions provided in subchapter C (section 2522 and following).
“(b) Exclusions from gifts. “(1) In general.—In the case of gifts (other than gifts of future interests in property) made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsection (a), be included in the total amount of gifts made during such year. Where there has been a transfer to any person of a present interest in property, the possibility that such interest may be diminished by the exercise of a power shall be disregarded in applying this subsection, if no part of such interest will at any time pass to any other person.
“(2) Inflation adjustment.—In the case of gifts made in a calendar year after 1998, the $10,000 amount contained in paragraph (1) shall be increased by an amount equal to—
“(A) $10,000, multiplied by
“(B) the cost-of-living adjustment determined under section 1 (f)(3) for such calendar year by substituting “calendar year 1997” for “calendar year 1992” in subparagraph (B) thereof.
“If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000.
“….”
Note.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 author has done an analysis of the case in God Betrayed/Separation of Church and State: The Biblical Principles and the American Application. Each member of a New Testament church is responsible to God first and the civil government second for the decision he makes as to whether to take a deduction for tithes and offerings to a New Testament church.
IRC 170 provides in relevant part:
Ҥ 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.
“…
“(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) 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 contribution or gift by a corporation to a trust, chest, fund, or foundation shall be deductible by reason of this paragraph only if it is to be used within the United States or any of its possessions exclusively for purposes specified in subparagraph (B). Rules similar to the rules of section 501(j) shall apply for purposes of this paragraph.”
IV. The Laws of Kansas
A. The Kansas Constitution Click links (maroon colored words) to go directly to quoted provisions.
PREAMBLE.We, the people of Kansas, grateful to Almighty God for our civil and religious privileges, in order to insure the full enjoyment of our rights as American citizens, do ordain and establish this constitution of the state of Kansas, with the following boundaries, to wit: Beginning at a point on the western boundary of the state of Missouri, where the thirty-seventh parallel of north latitude crosses the same; thence running west on said parallel to the twenty-fifth meridian of longitude west from Washington; thence north on said meridian to the fortieth parallel of north latitude; thence east on said parallel to the western boundary of the state of Missouri; thence south with the western boundary of said state to the place of beginning.
§ 3. Right of peaceable assembly; petition.The people have the right to assemble, in a peaceable manner, to consult for their common good, to instruct their representatives, and to petition the government, or any department thereof, for the redress of grievances.
§ 7. Religious liberty.The right to worship God according to the dictates of conscience shall never be infringed; nor shall any person be compelled to attend or support any form of worship; nor shall any control of or interference with the rights of conscience be permitted, nor any preference be given by law to any religious establishment or mode of worship. No religious test or property qualification shall be required for any office of public trust, nor for any vote at any elections, nor shall any person be incompetent to testify on account of religious belief.
§ 11. Liberty of press and speech; libel.The liberty of the press shall be inviolate; and all persons may freely speak, write or publish their sentiments on all subjects, being responsible for the abuse of such rights; and in all civil or criminal actions for libel, the truth may be given in evidence to the jury, and if it shall appear that the alleged libelous matter was published for justifiable ends, the accused party shall be acquitted.
§ 15. Search and seizure.The right of the people to be secure in their persons and property against unreasonable searches and seizures shall be inviolate; and no warrant shall issue but on probable cause, supported by oath or affirmation, particularly describing the place to be searched and the persons or property to be seized.
§ 1(b). § 1: System of taxation; classification; exemption. … (b) All property used exclusively for state, county, municipal, literary, educational, scientific, religious, benevolent and charitable purposes, farm machinery and equipment, merchants’ and manufacturers’ inventories, other than public utility inventori es included in subclass (3) of class 2, livestock, and all household goods and personal effects not used for the production of income, shall be exempted from property taxation.
“79-201.Property exempt from taxation; religious, …. The following described property, to the extent herein specified, shall be and is hereby exempt from all property or ad valorem taxes levied under the laws of the state of Kansas:
First. All buildings used exclusively as places of public worship … with the furniture and books therein contained and used exclusively for the accommodation of religious meetings … together with the grounds owned thereby if not leased or otherwise used for the realization of profit, except that: … (b) any building, or portion thereof, used as a place of worship, together with the grounds upon which the building is located, shall be considered to be used exclusively for the religious purposes of this section when used as a not-for-profit day care center for children which is licensed pursuant to K.S.A. 65-501 et seq., and amendments thereto, or when used to house an area where the congregation of a church society and others may purchase tracts, books and other items relating to the promulgation of the church society’s religious doctrines.
Second. All real property, and all tangible personal property, actually and regularly used exclusively for … religious … purposes, including property used exclusively for such purposes by more than one agency or organization for one or more of such exempt purposes. Except with regard to real property which is owned by a religious organization, is to be used exclusively for religious purposes and is not used for a nonexempt purpose prior to its exclusive use for religious purposes which property shall be deemed to be actually and regularly used exclusively for religious purposes for the purposes of this paragraph, this exemption shall not apply to such property, not actually used or occupied for the purposes set forth herein, nor to such property held or used as an investment even though the income or rentals received therefrom is used wholly for … religious … purposes. In the event any such property which has been exempted pursuant to the preceding sentence is not used for religious purposes prior to its conveyance which results in its use for nonreligious purposes, there shall be a recoupment of property taxes in an amount equal to the tax which would have been levied upon such property except for such exemption for all taxable years for which such exemption was in effect. Such recoupment tax shall become due and payable in such year as provided by K.S.A. 79-2004, and amendments thereto. A lien for such taxes shall attach to the real property subject to the same on November 1 in the year such taxes become due and all such taxes remaining due and unpaid after the date prescribed for the payment thereof shall be collected in the manner provided by law for the collection of delinquent taxes. Moneys collected from the recoupment tax hereunder shall be credited by the county treasurer to the several taxing subdivisions within which such real property is located in the proportion that the total tangible property tax levies made in the preceding year for each such taxing subdivision bear to the total of all such levies made in that year by all such taxing subdivisions. Such moneys shall be credited to the general fund of the taxing subdivision or if such taxing subdivision is making no property tax levy for the support of a general fund such moneys may be credited to any other tangible property tax fund of general application of such subdivision. This exemption shall not be deemed inapplicable to property which would otherwise be exempt pursuant to this paragraph because an agency or organization: (a) Is reimbursed for the provision of services accomplishing the purposes enumerated in this paragraph based upon the ability to pay by the recipient of such services; or (b) is reimbursed for the actual expense of using such property for purposes enumerated in this paragraph; or (c) uses such property for a nonexempt purpose which is minimal in scope and insubstantial in nature if such use is incidental to the exempt purposes of this paragraph; or (d) charges a reasonable fee for admission to cultural or educational activities or permits the use of its property for such activities by a related agency or organization, if any such activity is in furtherance of the purposes of this paragraph; or (e) is applying for an exemption pursuant to this paragraph for a motor vehicle that is being leased for a period of at least one year.”
“79-3603.Retailers’ sales tax imposed; rate. For the privilege of engaging in the business of selling tangible personal property at retail in this state or rendering or furnishing any of the services taxable under this act, there is hereby levied and there shall be collected and paid a tax at the rate of 5.3%. Within a redevelopment district established pursuant to K.S.A. 74-8921, and amendments thereto, there is hereby levied and there shall be collected and paid an additional tax at the rate of 2% until the earlier of the date the bonds issued to finance or refinance the redevelopment project have been paid in full or the final scheduled maturity of the first series of bonds issued to finance any part of the project upon:
“(a) The gross receipts received from the sale of tangible personal property at retail within this state; …”
“79-3606.Exempt sales. The following shall be exempt from the tax imposed by this act:
“…
“(aaa) all sales of tangible personal property and services purchased by a religious organization which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code, and used exclusively for religious purposes,”
Non-state churches should contact Jerald Finney for help in seeking exception from sales tax on items bought for use in church ministry.
FN1 Many books, articles, and audio teachings address the Biblical principles, history, and facts one can refer to in order to determine that when a church becomes a legal entity and obtains 501(c)(3) status, she violates Biblical principles and displeases our Lord.
IRC § 5O1 provides in relevant part:
Ҥ 501. Exemption from tax on corporations, certain trusts, etc.:
“(a) Exemption from taxation. An organization described in subsection (c) … shall be exempt from taxation under this subtitle [26 USCS §§ 1 et seq.] unless such exemption is denied under section 502 or 503 [26 USCS § 502 or 503]….
FN2 Browse this website for all written and audio teachings, available at no cost. Books can be ordered – see the Books page. All the books by Jerald Finney are available free in online and PDF form. The links to all online books and PDFs are at the Books Order Information page.
FN5 See God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (Xulon Press, 2008 (www.xulonpress.com) or Austin, TX: Kerygma Publishing Co. 2008 (churchandstatelaw.com), Section IV. This book and all books, articles, audio teachings of Jerald Finney are available at no cost on this website. Ordering information for the books is available at Order Information for Books by Jerald Finney.All the books by Jerald Finney are available free in online and PDF form. The links to all online books and PDFs are at theBooks by Jerald Finney Page.
FN6Bob Jones University, 461 U.S. 574 (1983).
FN7Ibid.
FN8 26 U.S.C. § 508 (2007).
“(a) Exemption from taxation. An organization described in subsection (c) … shall be exempt from taxation under this subtitle [26 USCS §§ 1 et seq.] unless such exemption is denied under section 502 or 503 [26 USCS § 502 or 503]….
“(c)(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office….
“(h) Expenditures by public charities to influence legislation. (1) General rule. In the case of an organization to which this subsection applies, exemption from taxation under subsection (a) shall be denied because a substantial part of the activities of such organization consists of carrying on propaganda, or otherwise attempting, to influence legislation….”
Churches under Christ Ministry Website: Understanding and Applying God's Principles for Church Headship "Would to God ye could bear with me a little in my folly: and indeed bear with me. 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" (2 Corinthians 11:1-3). ————————————This Ministry is under the authority of Charity Baptist Tabernacle of Amarillo, Texas. Jerald Finney, a Christian Lawyer and member of Charity Baptist Tabernacle, having received this ministry in the Lord, explains how a church in America can remain under the Lord Jesus Christ and Him only. "As every man hath received the gift, even so minister the same one to another, as good stewards of the manifold grace of God. If any man speak, let him speak as the oracles of God; if any man minister, let him do it as of the ability which God giveth: that God in all things may be glorified through Jesus Christ, to whom be praise and dominion for ever and ever. Amen" (1 Peter 4:10-11; See also, Ephesians 4::1-16 and 1 Corinthians 12:1-25). "Take heed to the ministry which thou hast received in the Lord, that thou fulfil it" (Colossians 4:17). "And hath put all things under his feet, and gave him to be the head over all things to the church" (Ephesians 1.22; See also, e.g. Colossians 1:18).
Simply Church: God's Prescribed Relationship Between Church and State 