As part of a left-wing political agenda, hoping to take over Churches, control who they married, license ministers, then Sunday School Teachers, etc., the US Congress and leaders of this new legislation . . .
. . .were determined to silence the church and eliminate the influence the church had always had on shaping "public policy."
One need not look far to see the devastating effects 501c3 acceptance has had to the church, and the consequent restrictions placed upon any 501(c)(3) church.
1. A church or church ministry must be 501(c)(3) in order to avoid paying taxes itself. 2. A church or church ministry must be 501(c)(3) in order for donations by members to be tax deductible.
3. The blind denominations leading the blind pastors say: Churches should comply with all the laws of the land because Jesus said, “Render unto Caesar the things that are Caesar’s” (Mark 12:17).
He finished by saying "and UNTO GOD THE THINGS THAT ARE GOD'S!
The blind leaders conclude: "Therefore, it is only right for a church to become a 501c3."
4. Being a 501c3 helps to legitimize a church in the eyes of the world. After all, Paul said, “Providing for honest things, not only in the sight of the Lord, but also in the sight of men.” (2Co 8:21)
He finished by saying "and UNTO GOD THE THINGS THAT ARE GOD'S!
Myths #1 & 2 have been promulgated for years by swarms of attorneys, as well as some accountants. Both myths are patently false.
When it comes to legal and tax matters, most people just assume that the “licensed professionals” know what they're talking about.
Little do people realize that far too many attorneys never personally study the law for themselves, and are merely parroting what they've heard other attorneys say.
Once a myth gets started in the legal profession, it tends to spread like a wildfire, particularly when the myth can make a lot of money for the tens of thousands of attorneys who want to take advantage of it.
These myths can be demythologized using the IRS’ own publications.
Myth #3 is often promulgated by folks who misconstrue the statements of Jesus to justify placing His church under State authority. Theologically, this is referred to as “Erastianism,” a position that holds that the church is, and ought to be, subordinate to the State.
Myth #4 is often promulgated by those who are preoccupied with pleasing men in order to win their approval. This is problematic because it inevitably results in worldly compromise. The emphasis in Paul's teaching is first upon doing what is honest “in the sight of the Lord.” Only then are we enabled to do what is honest “in the sight of men.”Myth #1. Tax Exempt:
The IRS has acknowledged for decades that it is completely unnecessary for any church to apply for a tax-exempt status. According to IRS Publication 557, as well as IRS Code § 508, churches and church ministries are “exempt automatically.” Application for an exempt status is not only superfluous, but to do so subordinates that church to the IRS. Churches in America have always been nontaxable anyway. It simply makes no sense for a church to go to the IRS and seek permission to be exempted from a tax the government can’t impose in the first place.
The church in America is protected from the government by the First Amendment:
“Congress shall make NO law respecting an establishment of religion, or prohibiting the free exercise thereof.”
It would be absurd to suppose that you could have free exercise of religion if you had to pay for it (taxes). If Congress can make NO law respecting the church, it can make NO law to tax the church.
The IRS lacks the jurisdiction necessary to tax the churches in America. The IRS has no more jurisdiction over the churches in America than it does over the churches in Canada. It would be as absurd (and tyrannical) for the IRS to tax the churches in America, as it would be for the IRS to tax churches in Canada. They don<'t have jurisdiction.Myth #2. Tax Deductible:
Whether or not a church or church ministry applies for and receives a “501c3 tax-exempt recognition letter” from the IRS, any contributions made to a church are “automatically qualified” as a tax write-off to the contributor, pursuant to IRS Publication 526, and IRS Code § 170(c)(2)(B). A church does not have to be a "nonprofit charitable organization" to be tax deductible, nor does it need IRS authorization to be tax deductible. According to the IRS, churches have that status “automatically.”
Myth #3: Render To Caesar:
Jesus did indeed say, “Render to Caesar the things that are Caesar’s;” but that’s only half the verse! Jesus went on to say, “and to God the things that are God’s.”
The obvious question to be asked is at what time did Jesus place His church under the authority and jurisdiction of Caesar (the State)?
Mark 12:17 is the most brilliant teaching on lawful authority and legal jurisdiction that anyone has ever uttered. We can properly interpret Jesus’ teaching in this way, “Don’t render to Caesar the things that don't belong Caesar.”
Only the "sovereign" (the supreme power) has the authority to impose a tax, and he may do so only upon his own citizen and subjects. Is the State sovereign over Jesus Christ and His body, the church? No, the civil government has no such lawful authority, biblically or constitutionally. If the civil government has the authority to tax the church, the church is a subordinate and a subject of the State.
God ordained both the church and the civil government, and has delineated their respective spheres of authority. There should be mutual accountability between the church and the State, but one is not an underling of the other.
America's Founding Fathers forever abolished the old State-Church and Church-State systems. However, those who would now advocate that the church should be subordinate to the State are, in reality, calling for a return of that old State-Church system.
For the church to apply to the government to be exempt from taxes presupposes that the government has legitimate authority to impose taxes on the church to begin with. Such thinking smacks of Erastianism.
“It should wrong our consciences.”
The clergy in America have not always been so confused on the issue of State taxation of the church. For many years it was understood that the church cannot and must not go to the State with hat in hand and ask permission to be exempted from taxes. To do so would be an admission that the church was under State jurisdiction. Instead, the church must refuse such an admission. The Rev. Isaac Backus was one such clergyman. In September of 1775 he preached a sermon to the Massachusetts Assembly in which he stated:
“Yet, as we are persuaded that an entire freedom from being taxed by civil rulers to religious worship is not a mere favor from any man or men in the world but a right and property granted us by God, who commands us to stand fast in it, we have not only the same reason to refuse an acknowledgment of such a taxing power here, as America has the abovesaid power, but also, according to our present light, we should wrong our consciences in allowing that power to men, which we believe belongs only to God.”
Myth #4. 501c3 Status Legitimizes the Church
It's a sad commentary on the church of our day when any church feels compelled to go to sinners to seek legitimacy. The church of Jesus Christ is in no way legitimized by the license, approval, acknowledgement or permission of wicked men (those who don't appreciate how corrupt the IRS is haven't taken the time to study the public record).
For any church to submit to the IRS for 501c3 approval in an effort to be perceived by the world as being honest ("Providing for honest things"), even if it is well-intentioned is, nonetheless, completely illogical. Accountability is a good thing, but only when we make ourselves accountable to those whom the Scriptures call us to be accountable, and to those who are honest and trustworthy themselves.
Is it biblical for a church to make itself accountable to the IRS? Is the IRS honest and trustworthy? Is the IRS itself legitimate such that it can, with any genuine sense of credibility, legitimize anyone else as legitimate?
le•git•i•mate, adj. 1. Being in compliance with the law; lawful: a legitimate business. 2. Being in accordance with established or accepted patterns and standards.
Let's examine the IRS' own track record to determine its legitimacy: The last time that the Government Accounting Office even attempted to audit the IRS' books was in 1996 (they're supposed to audit the IRS every year, but they are no longer able to do so). In that year, GAO audits determined that over $13 billion of the taxes that the IRS had collected (in 1995) could not be accounted for. Thirteen-billion dollars had vanished, and the IRS offered no better explanation than to shrug their shoulders! The GAO found the IRS's books in such a shambles that they declared the IRS to be "unauditable." Furthermore, the IRS refused to be held accountable for the "loss."
How could 501c3 recognition from such a corrupt entity, an agency that literally holds itself to be above the law, and accoutable to no one, result in "legitimacy"? It's simply illogical to hold that recognition from any agency that isn't legitimate itself could result in legitimacy.
Is “honesty” (morality) a prerequisite for 501c3 recognition? If it were, then only honest and moral groups would be approved; but that is simply not the case at all. Even just a cursory review of IRS Publication 78 (an annual list all 501c3 organizations) reveals that many thousands of 501c3's are immoral and wicked organizations. These include:
* Satanists * Wiccans * Homosexuals * Pedophiles * Pornographers * Pro-Aborts * Pagans * Atheists * and thousands of other organizations which are hellbent on destroying the moral fabric of this nation
Becoming a 501c3 places any church in very sordid company. It is both unbiblical and illogical to claim that a church becomes "legitimate" by receiving a 501c3 status.
In Bob Jones University v. United States (461 U.S. 574), the U.S. Supreme Court noted the following about the government’s intended purpose for the 501c3:
The Court asserts that an exempt organization must “demonstrably serve and be in harmony with the public interest,” must have a purpose that comports with “the common community conscience,” and must not act in a manner “affirmatively at odds with [the] declared position of the whole Government.” Taken together, these passages suggest that the primary function of a tax-exempt organization is to act on behalf of the Government in carrying out governmentally approved policies.
Government uses "tax-exemption to keep Ministers quiet of addressing political persons running for office.
IRS Code § 501c3 reads as follows:
Sec. 501. Exemption from tax on corporations, certain trusts, etc. (c) List of exempt organizations —
(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.
While it may be appropriate for many non-profit organizations to waive their right to intervene in political campaigns, or to influence legislation, is this the right thing for a church to do?
Waiving such rights is to waive one’s freedom of speech. Waiving one’s right to influence legislation is especially problematic. The inevitable result has been that the church has abandoned its responsibility to influence their elected representatives to craft legislation that is biblical and that comports with the Constitution. The unchurched, and even those who are openly hostile to the church, have taken over that influence and are now seeing to it that their legislators craft statutes which are unbiblical, immoral, and unconstitutional.
One need not look far to see that the church’s acceptance of the 501c3, and its significant restrictions, has had devastating consequences to not only the church, but to the entire nation.
When a church accepts the 501c3 status, that church:
* Waives its freedom of speech. * Waives its freedom of religion. * Waives its right to influence legislators and the legislation they craft. * Waives its constitutionally guaranteed rights. * Is no longer free to speak to the vital issues of the day. * Becomes controlled by a spirit of fear that if it doesn’t toe the line with the IRS it will lose its tax-exempt status. * Becomes a State-Church.
The church in America today is, by and large, not speaking to the vital issues of the day. The church has been effectively silenced. There has been a chilling effect upon the church’s freedom of speech for fear of IRS retribution should the church get out of line. The inevitable result is a moral downward spiral in the culture as the church stands mute.
This did not happen by accident, but by design, and it is something of relatively recent design. Churches were added to IRS Code § 501c3 in 1954. All one need do is analyze who is responsible for sponsoring the congressional bill to include churches in § 501c3 and it should become apparent that his agenda was not to empower the church, but to silence the church (hint: the sponsor was a Senator from Texas who later became President).
“The church is the moral compass of society.”President John Adams
John Adams stated while he was our President, “The church is the moral compass of society.” But in order to remain a true and faithful compass, the church must remain separate and independent of the influences of that society, particularly its civil government. It must be a “free-church.” Should the church become subordinate, or in any way controlled or co-opted by the civil government (a “State-Church” system), it can no longer effectively serve as that society’s moral compass. Unless it is respected, no one will listen to what it has to say.
Indeed, few citizens in any society, at any time in history, in any nation, have ever had any genuine respect for any State-Church system (nor should they). State-Church systems are inevitably compromised and governed by pragmatism, rather than genuine Christian faithfulness. It should surprise no one that the 501c3 church in America has lost its prophetic voice, lost the respect it once held, and is no longer “the moral compass of society.”
For a 501c3 church to openly speak out, or organize in opposition to, anything that the government declares "legal," even if it is immoral (e.g. abortion, homosexuality, etc.), that church will jeopardize its tax exempt status. The 501c3 has had a "chilling effect" upon the free speech rights of the church. LBJ was a shrewd and cunning politician who seemed to well-appreciate how easily many of the clergy would sell out.
Did the church ever need to seek permission from the government to be exempt from taxes? Were churches prior to 1954 taxable? No, churches have never been taxable. To be taxable a church would first need to be under the jurisdiction, and therefore under the taxing authority, of the government. The First Amendment clearly places the church outside the jurisdiction of the civil government: "Congress shall make NO LAW respecting an establishment of religion, nor prohibiting the free exercise thereof."
Religion cannot be free if you have to pay the government, through taxation, to exercise it. Since churches aren't taxable in the first place, why do so many of them go to the IRS and seek permission to be tax-exempt? It occurs out of:
* Ignorance ("We didn't know any better") * Bandwagon logic ("Everyone else is doing it") * Professional advice (many attorneys and CPAs recommend it)
Does the law require, or even encourage, a church to organize as a 501c3? To answer that question let's turn to what the IRS itself has to say.Churches Need Not Apply
In order to be considered for tax-exempt status by the IRS an organization must fill out and submit IRS Form 1023 and 1024. However, note what the IRS says regarding churches and church ministries, in Publication 557:
Some organizations are not required to file Form 1023. These include:
Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men’s or women’s organization, religious school, mission society, or youth group. These organizations are exempt automatically if they meet the requirements of section 501(c)(3).
Churches Are “Automatically Tax-Exempt”
According to IRS Code § 508(c)(1)(A):
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.
This is referred to as the "mandatory exception" rule. Thus, we see from the IRS’ own publications, and the tax code, that it is completely unnecessary for any church to apply for tax-exempt status. In the IRS’ own words a church “is automatically tax-exempt.”
Churches Are “Automatically Tax-Deductible”
And what about tax-deductibility? Doesn’t a church still need to become a 501c3 so that contributions to it can be taken as a tax deduction? The answer is no! According to IRS Publication 526:
Organizations That Qualify To Receive Deductible Contributions
You can deduct your contributions only if you make them to a qualified organization. To become a qualified organization, most organizations other than churches and governments, as described below, must apply to the IRS.
In the IRS’ own words a church “is automatically tax-deductible.”Churches Have a Mandatory Exception To Filing Tax Returns
Not only is it completely unnecessary for any church to seek 501c3 status, to do so becomes a grant of jurisdiction to the IRS by any church that obtains that State favor. In the words of Steve Nestor, IRS Sr. Revenue Officer (ret.):
"I am not the only IRS employee who’s wondered why churches go to the government and seek permission to be exempted from a tax they didn’t owe to begin with, and to seek a tax deductible status that they’ve always had anyway. Many of us have marveled at how church leaders want to be regulated and controlled by an agency of government that most Americans have prayed would just get out of their lives. Churches are in an amazingly unique position, but they don’t seem to know or appreciate the implications of what it would mean to be free of government control."
from the Forward of In Caesar's Grip, by Peter Kershaw
A corporation is defined as:
Corporation. An artificial person or legal entity created by or under the authority of the laws of a state. An association of persons created by statute as a legal entity.
The legal attributes of the corporation, and the alleged “benefits” that attorneys most commonly discuss with churches to convince them of their need to incorporate are:
1. A corporation has limited liability protection. 2. A corporation may exist in perpetuity. 3. A corporation may hold title to real property.
One additional legal attribute of any corporation is something that attorneys generally don't like to discuss with their church clients:
A corporation may sue and be sued.
In point of fact, there is a great deal that your attorney is not likely to disclose, in the way of the various legal attributes of the corporation, that you might not find so attractive. In the landmark case of Hale vs. Henkel, the U.S. Supreme Court stated the following regarding corporations:
Upon the other hand, the corporation is a creature of the State. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the State and the limitations of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation.
Hale v. Henkel, 201 U.S. 43 at 74 (1906)
From this case we learn that:
* A corporation is “a creature of the State.” * The State is "sovereign" over the corporation. * The corporation is “incorporated for the benefit of the public.” * A corporation is a State “franchise.” * Incorporation is a State “privilege.” * A corporation is “subject to the laws of the State.” * “Its powers are limited by law.” * It must “obey the laws of its creation.” * A corporation has no constitutionally-protected rights.
These are not new or novel legal principles that the Supreme Court just discovered in 1906. Rather, these are legal principles that date back many centuries. The corporation is a product of ancient Rome. The corporation, as the legal entity we are familiar with today, dates back to at least 250 B.C.
By 6 A.D. and the codification of Corpus Juris Civilis (the first great codification of Roman civil law) all "spontaneous collectivities of persons" were required to incorporate. The early church was persecuted over their refusal to incorporate. Had they incorporated they could have avoided much of the persecution they otherwise suffered at the hands of the Romans.
Rome persecuted the Christians not for Who they worshipped. Rome had hundreds of deities, and they could care less who or what you worshipped, as long as you were "licit" (licensed). The church was persecuted not because they worshipped Jesus Christ, but because of the manner in which they functioned -- an ecclesia. The church was declared to be "illicit," and held in a state of "civil disobedience," because of their refusal to incorporate. Why did the church refuse incorporation? Largely because they knew that it would destroy their testimony that Jesus Christ is "Lord" and "Sovereign."
Under Roman civil law, "Caesar is sovereign over the corporation," and "the corporation is a creature of the State." The early church willingly suffered for its refusal to accept "State privileges and benefits."
Because that for his name’s sake they went forth, taking nothing of the Gentiles. (3 John 7)
Corporations have been known and widely used for many centuries in virtually every corner of the earth. However, the corporation was not at all widely known in America during the colonial era, and for many decades after our independency. Indeed, the corporation was an entity viewed with great suspicion, if not trepidation. For many years it was extremely difficult and expensive to incorporate and, therefore, it was rather difficult to identify corporations of any kind, especially incorporated churches.
Today, all that is necessary to incorporate is that you fill out the necessary forms and file them with your Secretary Of State's office; but that wasn't always the case. It used to be that if you wanted to incorporate you would have to petition your state legislature for a corporate charter, and they weren't in the habit of handing those out to just anyone who wanted one. In order to be issued a corporate charter, you had to prove to a majority of your state legislators that you simply couldn't operate any other way. As a result, the vast majority of businesses operated as sole proprietorships and general partnerships.
Those who have ever had to petition their state legislature for anything know that it is a time-consuming process, and often leads to frustration, if not failure. For any church to request a corporate charter would surely be met by failure (at least after ratification of the Constitution and the First Amendment), since the states viewed the incorporation of any church as a government "establishment of religion." Some state legislatures, such as Virginia and West Virginia, went so far as to amend their state constitutions to "forever prohibit the incorporation of any church."
James MadisonIn 1811 Congress ratified a bill, to incorporate the Protestant Episcopal Church in Alexandria, Virginia. When the bill was presented for President James Madison’s signature, he promptly vetoed it. He furnished a list of his objections, in a veto message, which in part included:
"Because the bill exceeds the rightful authority to which governments are limited by the essential distinction between civil and religious functions, and violates in particular the article of the Constitution of the United States which declares that ‘Congress shall make no law respecting a religious establishment.’ The bill enacts into and establishes by law sundry rules and proceedings relative purely to the organization and polity of the church incorporated… This particular church, therefore, would so far be a religious establishment by law, a legal force and sanction being given to certain articles in its constitution and administration."
James Madison had no difficulty with grasping the fact that the bill was wholly unconstitutional, although the majority in Congress evidently did not. With the Episcopal Church having already declared its intentions, the Virginia state legislature prevented any church from ever incorporating by amending their Constitution to preclude their doing so. To this very day, it is unlawful to incorporate a church in Virginia. In Caesar's Grip, page 66, by Peter Kershaw
Of Madison's historic veto, constitutional law professor John Eidsmoe states in his book, Christianity and the Constitution:
His reason was that incorporation was a form of licensing by which government gave churches permission to operate. Therefore, incorporation was superfluous; government has no jurisdictional authority to tell churches they can or cannot operate.
Madison's veto set an historic precedent that was seldom departed from, at least up until the turn of the twentieth-century. In 1898, New Jersey became the first state to "liberalizate" their incorporation laws. The New Jersey state legislature delegated its powers to incorporate to the New Jersey Secretary Of State. Rather than issuing corporate charters, the Secretary Of State issued "articles of incorporation." All the former impediments to obtaining corporate status were done away with.
In order to "compete" with New Jersey, other states quickly followed suit and liberalized their incorporation laws, as well. Soon the mainline church denominations, no longer hindered by state legislators, incorporated. Andrew Carnegie, a wealthy industrialist who sat on the board of directors for the largest Presbyterian denomination (PCUSA), was first to encourage his denomination to incorporate. Carnegie did so not because of all the reasons we hear today. Not once did he ever even mention limited liability protection. Rather, Carnegie spoke highly of the corporation, based upon its alleged "efficiencies."
Other industrialist tycoons, such as Cleveland Dodge and John Wanamaker, who sat on the boards of other mainline denominations, also encouraged their denominations to incorporate, based upon their theories of "improved efficiency." This was the industrial age and industrialists had rapidly become "corporate men." In their worldview, the church too must become "modernized," and incorporation was a necessary element of modernization.
Eventually, many local churches, encouraged by the example of their denominations, also incorporated. By the mid-twentieth century, incorporation of the church had become the status quo.
Madison's veto of 1811, and his reasons for that veto have, by and large, been abandoned, if not completely forgotten.
Of even greater concern is the fact that today's church has, with few exceptions, abandoned the beliefs of the early church fathers who refused to incorporate, and suffered Rome's persecution, as a direct result. Incorporation was mandatory for all "spontaneous collectivities of persons" throughout Rome. Yet they refused Caesar's "privilege."
In America, incorporation is completely voluntary. Furthermore, as we've already mentioned, it used to be almost impossible to incorporate a church, based upon the fact that no church can be free and independent of that government that incorporates it.
Yet churches today incorporate routinely, a decision which they make with about as much care and consideration as what brand of tissue paper to use in their lavatories; this in spite of the fact that there are huge legal and theological ramifications to any church seeking incorporation.
Read on to discover what some of those legal and theological ramifications are.
Limited Liability Protection?
Limited liability protection is generally first among the legal “benefits” used by attorneys to convince a church to incorporate. However, limited liability protection is, for a number of reasons, largely a phantasm promulgated by (you guessed it) the legal profession, and fails to take into account significant trends in tort law in recent years.
The American Bar Association has hosted “Tort & Religion” conferences since at least 1989 in which they instruct attorneys in the finer points of how to target incorporated “religious organizations” and “pierce the corporate veil.”
Incorporation does little if anything in the way of actually protecting the church. The legal reality is that a church cannot be sued and brought into court until it incorporates. A church “is not an entity recognized in law.” If the court cannot legally recognize it, it cannot be sued. A church is not subject to the jurisdiction of any court. However, should a church incorporate it most certainly may be sued. Incorporation becomes the nexus of government jurisdiction to the incorporated church. One of the legal attributes that seldom if ever is discussed by the attorney is:
* A corporation may sue and be sued.
How they can sell that as a “benefit” is hard to comprehend.The Fox Guarding the Henhouse
One thing attorneys will never discuss is just who offers the “protection” to the corporation. The answer is the State. Is this wise or prudent? Even decades ago when the State was openly cordial to the church it would be hard to argue from Scripture that the church should seek its “protection” from the State. But in post-Christian America when the State has grown openly antagonistic toward biblical Christianity, is it smart to seek State “protection”? That would be like asking the fox to guard the henhouse (or in biblical vernacular, the wolf protecting the sheep)!
Problems with Incorporation
There are numerous problems associated with a church organizing as a corporation. Attorneys will enthusiastically market the alleged “benefits,” but nary a word is mentioned about all the pitfalls of incorporation. Not only are there legal pitfalls, but there are significant theological ones, as well.A Creature Of the State
Two of the most serious of all problems for the church that incorporates is the legal fact that:
* The corporation is a “creature of the State.” * The State is “sovereign over the corporation.”
These are legal maxims that originated in ancient pagan Rome, and they survive as governing legal dictum to this very day. The corporation that we know today, with all of its legal attributes, was perfected by the Romans at least 250 years prior to the birth of Christ Jesus. Those who have studied Roman culture will appreciate how every element of society, including its legal system, was imbued by their pagan worldview.
There were no personal liberties in the Roman empire, only State-sanctioned privileges and benefits. The State was sovereign (the supreme authority) in all matters and nothing could be done absent the State’s license. Incorporation became mandatory by 6 A.D. for all “spontaneous collectivities of persons.” The church was not persecuted by Rome because of who they worshipped (there were hundreds of deities that Rome permitted to be worshipped). Persecution began because of the manner in which they worshipped. The church was held to be “illicit” because they refused to seek the permission of the State through incorporation.
Why would the early Christians suffer the wrath of Rome rather than incorporate? The answer is both legal and, necessarily, theological. For the church to incorporate would have been a public proclamation that Caesar was sovereign (the supreme authority) over Jesus Christ, the object of the church’s worship. Those Christians would have considered such a thing blasphemy!
Secondly, they well knew that the church is the body of Christ -- corpus Christi -- not the corpus of the State (the word “corporation” comes from the Latin “corpus” or “body”).
The early church had far more regard for the consistency of their testimony than many churches do today. We should try to learn something from their example. It is because of that testimony that they at no time sought the privileges and benefits of the Roman State:
Because that for his name’s sake they went forth, taking nothing of the Gentiles. (3 John 7)
The early church existed to testify to the world the authority and Lordship of its Head and Founder, the Lord Jesus Christ -- an imperial gospel. The local church, though persecuted, was free and unconstrained to impact the culture of the Roman Empire, not become subordinate to its pagan rulers. Incorporated churches in America today, however, are constrained by the dictates of the State by virtue of the myriad of laws which apply to non-profit corporations.This little light of mine, I'm gonna let it shine
Let’s now follow one of the more typical scenarios in how the pastor (and often the elders, and deacons) are convinced to incorporate the local church. Sunday morning the pastor gives a stirring sermon on the passage from John 3:3, “Jesus answered and said unto him, Verily, verily, I say unto thee, Except a man be born again, he cannot see the kingdom of God.” He closes with an altar call and proclaims, “Friends, Jesus is not only the Savior merely of men’s souls, He is the Savior, the Lord, the Sovereign of every area of our lives, Jesus wants to not only save your soul from eternal damnation, His will is to govern every area of your life. Jesus is the Provider. Jesus is the great Protector.” And many a soul is saved that day. They are convinced the Pastor really believes what he says.
With Monday morning into the church comes an attorney who informs the Pastor, “Reverend, in combing through the Secretary Of State’s records, I noticed that your church is not incorported. Don’t you know that most churches are incorporated? Pastor, you’re flirting with danger. Didn’t you hear about the church just down the road here that got sued because some grandmother walked in and fell over a rumple in the carpet and broke her hip. She got a judgement not only against the church, but because the church wasn’t incorporated she was able to attach the personal assets of the pastor, elders, deacons, and any of the members of the church with deep pockets.”
What the attorney just presented to the Pastor is a lie (just ask that attorney to give you a citation for the case of granny and her broken hip, and you’ll never see him again), but lies rooted in fear often sell, and the attorney well knows this. He’s not concerned for the truth, just for roping in another paying client. The law profession is far more competitive than most people realize. There are over one-million attorneys in America (that’s more than the entire attorney population of the rest of the world combined). There are too many attorneys chasing too little legitimate legal work, so many of them have to create work for themselves -- to create a perception of a need where no legitimate need exists.
Just what kind of a testimony is it to the world when the church incorporates, and particularly when we do so out of a spirit of fear? Sadly, the issue of our testimony is seldom ever considered when making that monumental decision. But it is one that many others will ponder when they are presented with the gospel message. “Let’s see, the Pastor just said that Jesus not only saves my soul, but He will be my Savior in every area of my life. He’s my Provider. He’s my Protector. If he’s such a great Protector, why then did this church think they needed to go to the State and get its limited liability protection by incorporating? Obviously the church must not think very much of Jesus’ ability to protect them.”
A great many of the church's problems today are a direct result of the church "taking" and actively pursuing a legal status that makes it inferior to, and a subordinate of, the civil government. The two most significant ways this occurs is by incorporation (state jurisdiction) and the tax-exempt 501c3 status (federal jurisdiction).
Scripture simply does not support the notion that the church is an inferior institution to the State. Nor, for that matter, is the church a superior institution to the State. God has ordained both the church and the civil government as His "ministers." The church is the minister of grace, while the State is the minister of justice. Church and State are two distinct and independent spheres of authority (jurisdictions) ordained by God.
However, no church can remain separate and distinct from the civil government when it incorporates and/or accepts 501c3 status. For legal purposes an incorporated 501c3 church has subordinated itself, by contract, to the civil government. For theological purposes, that church has made a covenant with the State, a covenant which Scripture in no way supports.
What is the solution to the church's current messy state of affairs? It must cease operating as an underling of the State. The solution is for the church to legally operate as it once had in America (and we might add, quite successfully so). Rather than operating as "tax-exempt nonprofit religious corporations," churches once functioned as "free-churches." Just what exactly is a free-church? A free-church operates independent of, and is in no way subordinate to, the civil government.
It is the right of any church to operate free of the corrupting and compromising influence and control of the State; and it is a right guaranteed by the Constitution:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…
A free-church is not some radical-fringe concept. Rather, the free-church was one of the most influential, and certainly one of the most common, institutions in early American history. The worldview of those men who fought for America's independence embraced an uncompromising belief that the church was not an underling, a vassal, or in any way subordinate to any king, parliament, or any other civil government body.
The church is the religious institution ordained and established by Jesus Christ Himself, and Christ has never delegated His authority to the civil jurisdiction to rule in the affairs of His church.
A free-church is the opposite of a State-Church. The Church Of England is a State-Church system. State-Churches are well known throughout Europe, and there have been State-Churches there for many centuries. Europeans not only have a very low regard for their State-Churches and government-licensed clergy, they often hold them in open contempt, and this is reflected statistically by what is the lowest church attendance in the world.
Rather than being quick to criticize the Europeans for not attending church, we should ponder whether their contempt for the State-Church system isn't well deserved. If you're ever inclined to have a church experience that is cold, empty, meaningless and downright depressing, just attend the average European church service (it's little wonder there are so many agnostics and atheists there).
A State-Church is a church which is organized by the State, and/or is controlled and regulated by the State, or which exists at the pleasure of the State. Christians in Europe have, for a number of generations, grown up surrounded by nothing but State-Churches. As such, they are generally not offended by the notion that the State controls their church (they just don't bother to show up unless it's Christmas). It's simply a way of life for them which they generally do not question.
Americans, on the other hand, are generally offended by the notion of the State creating or controlling their churches, or that their churches would be subordinate to the State. However, this is exactly what has occurred in recent years as a direct result of churches incorporating and seeking a 501c3 status -- they have become State-Churches.
A free-church is a church that is truly separate, independent and autonomous from the State. It is established by a local body of Christian believers, or chartered or "planted" by another church body or denomination, without the permission or sanction of the State. The only "sovereign" of the free-church is the Lord Jesus Christ. A free-church cannot incorporate, it cannot seek a 501c3 status, it cannot become a tax collector for the State (withholding agent), it cannot accept government-issued tax numbers (EIN).
The term "free-church" was widely used by the American colonists. It was not a term that they coined, but one which they inherited from their fathers and forebears such as the Scottish Covenanters, and the "non-conformist" English clergy, both of whom fled the persecutions of the Anglican State-Church and it's "sovereign head" the British monarchy.
Even after American independence there continued to be Christians who fled the religious persecution of their State-Church systems for the freedom of religion America offered them. They too often used the term "free-church" to describe the churches they organized. Such an example of this would be the Evangelical Free Church, which was founded by a group of Scandinavians who settled in America in the mid-nineteenth century.
Tragically, the Evangelical Free Church In America today has become a "Free Church" in name only. By incorporating and becoming a 501c3 they, some years ago, decided to abandon those principles that their Swedish, Danish and Norwegian forefathers endured great persecution for.
Equally tragic is the demise of the so-called "Free-Church of Scotland." Were they honest it would be renamed the "State-Church of Scotland." So thoroughly has it become a State-Church that Scottish pastors receive their paychecks from the government (and it happened because the Scottish clergy insisted upon it). He who pays the piper calls the tune.
The church must cease operating as an underling, subordinate to the State, or in any way dependent upon the State for "privileges and benefits." The solution rests in the church organizing and operating as a church -- the ecclesia, not as something other than what the Lord Jesus Himself ordained and specified. Jesus spoke of the church as a “body” with Himself as the “head” of His church, and we as various “members of the body.” The church is, therefore, not an “organization” (a “legal entity”) but a living, breathing “organism.”
This should not be a difficult biblical doctrine to grasp, particularly for the Pastor. Sadly, however, ever since local churches started organizing as tax-exempt non-profit corporations in the mid-twentieth century, and since the incorporated 501c3 church is now the status quo, many folks have a hard time conceiving of the church operating as just a church. For some odd reason, just being a church isn’t good enough anymore for too many Christians.
The thinking today appears to be that we must somehow be smarter than Jesus and His disciples were. They refused to incorporate and that refusal resulted in their persecution (incorporation of all “spontaneous collectivities of persons” became mandatory throughout the Roman Empire by 6 A.D.). We’re told that we live in a far more complex world than the first-century church, and so the church too must inevitably become more complex and just adapt to the complexities of the modern information age. The simplicities of the organizational infrastructure (polity) of the early church are no longer adequate to address the complex world in which we live.
Those who hold to such beliefs, whether in word or deed, are in reality, making a public proclamation that Jesus Christ is no longer competent to govern His own church and provide for, and protect it.
The courts well-understand that “a church is not an entity recognized in law,” meaning that they have no jurisdiction over the church. However, organizing a church as a church is an especially difficult concept for attorneys to grasp. Few attorneys can comprehend that there are things and issues completely outside the purview and jurisdiction of the civil government, nor do they much care for the idea. After all, it’s hard to get many billable hours out of those churches that understand that the civil government has no jurisdiction over them. A free-church needs an attorney like a fish needs a bicycle.
The legal support for the State’s lack of jurisdiction over the church in America is not only the Word of God, but the First Amendment to the Constitution for the United States:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…
No church in any nation at any point in history can lay claim to the freedoms and liberties that are guaranteed the church in America. The First Amendment is an act of God’s Providence to safeguard His church and maintain its independence from the State. The First Amendment is the highest form of real protection the church has ever known in history.
The solution rests in the church abandoning the phony third-rate protections and benefits of the State and returning to those real protections and benefits that are ours in Christ Jesus.
Although it's not inherently difficult to unlicense a State-Church1 and/or organize and operate as a free-church or free-ministry, you'll still need some guidance and direction. Thankfully, there's no need to hire an attorney. All you need is some basic do-it-yourself education, and that's what this ministry offers.
We have a couple of options available for you, but for most folks the best one is our National Unlicensed Church Conference. Videos and Syllabus of that conference are available.
1). We define a State-Church as any of the following:
1. An incorporated church 2. An incorporated 501c3 church 3. A 501c3 "unincorporated association" church 4. A corporation sole church (contrary to the myths promulgated by the corporation sole peddlers, a corporation sole is a corporation, and it makes little difference whether or not it is also a 501c3. A corporation sole church is a State-Church).