Why do churches go to the government and seek permission to be exempted from a tax they didn’t owe to begin with?
By Jim Stockstill
“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.”
501(c)(3) corporation is a non-profit organization that gains a tax-exempt status under section 501(c) in the U.S. Internal Revenue (IRS) Code [26 U.S.C. §501(c)]. Many types of non-religious clubs and groups are eligible for 501c3 incorporated status, but part 3 in the tax code was developed for religious, educational, and charitable entities.
There is a false assumption by many churchgoers that in order to be an “official church” one must obtain 501c3 status. Sadly, the premise is a well conceived subterfuge. There is no law that requires a “church” to obtain 501c3 status. To shed light on whether the designation is good or evil, we will discuss why so many clergy seek non-profit status and why the National War Council has chosen the structure of the early church.
The IRS website states the “Exempt Purposes” of 501c3:
“The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.”
This innocuous statute seems reasonable, so why would there be any harm in having a 501c3 corporation? At first glance, it would appear the IRS is trying to help charitable individuals and organizations receive government support for benevolent activities. Indeed, there is nothing generally wrong with having a 501c3 designation until the finer points, specifically for churches, are closely examined. Unfortunately, the majority of religious leaders are unaware of the oversight and punitive powers the governmental is granted within the statute.
Before we discuss the oversight and punitive powers given to the government over 501c3’s, there are three important facts that need to be stated:
- No U.S. law exists that requires any individual to file a federal income tax form. (See documentary: Freedom and Fascism)
- The Biblical Church is not legally recognized; therefore, it is not taxable.
- The misguided concept of enticing individuals to give via tax write-offs, as well as other emotionally embellished schemes (robbing God), is not sound doctrine or scripturally based. You only have to look at the daily activities of the early church and the guidelines from the Apostle Paul (I Corinthians 16:2 II Corinthians 9:7) to understand the basic truth of giving.
Understandably, the second point may be confusing as to the concept of the church not being a legally recognized entity. For a simple example let’s consider a family gathering. Your family cannot be taxed or sued for having a family reunion; however, if your family went to the government and got a corporate entity registered in the state database under “Bob’s Family Reunion,” now all those who attend “Bob’s Family Reunion” can be taxed and/or sued in a court of law. The thought of such a thing is absurd, but the real absurdity is that just about every church building you see on street corners across the country willingly give themselves over to that absurdity and register as a501c3corporate entity.
Likewise, if a group of believers (which is called the “church” in Scripture) gather together to study, they cannot be taxed or sued for simply meeting together. In the same sense, churches don’t need to have the court acknowledge their existence; their non-existence in the eyes of the court simply means that the court doesn’t care what they say or do, meaning that the state has no business in their affairs and doesn’t care to.
So, if the church is not required to incorporate as a 501c3, why would the clergy (church) seek such a designation? There are two basic reasons; one is guileless(naivety) and the other more nefarious:
The first: Tradition. Over the past 60 years becoming a 501c3 has just become something that clergy, their elders and laypersons do. Being naïve to the consequences does not make it less of a threat but following the doctrines and commandments of men (Mark 7:7) can have unintended repercussions.
The second: Money. For the modern church“tax-exempt” status means that individuals and businesses can write off donations on their taxes and increase their own profits. While the “tax-exempt” status may help increase the frequency and size of donations in the offering plate or basket there is a church-wide misunderstanding of why we should give and to what extent our donations lower taxes.
Rather than dwell on the issue of why we give and the various seminars that clergy attend to learn the latest in emotional appeals, and various methods to increase giving among those (churchgoers, congregations, parishioners, flock) that give or tithe, we will take a second to look at the misrepresentation of tax deductions.
Charitable donations will only lower your taxes if all of your itemized deductions are higher than the standard deduction set for that tax year.To claim a tax deduction for charitable contributions, you have to itemize your deductions. The value of the standard deduction depends on your filing status and adjusts annually for inflation. Other itemized deductions include state and local income taxes, mortgage interest and investment expenses. If your itemized deductions wouldn’t exceed your standard deduction, it makes financial sense to choose the standard deduction. In this case, you can’t claim a deduction for your charitable donations: your donations won’t reduce your taxes one penny.
Limitations on Tax Return Donations: your charitable donations for the year cannot exceed 60 percent of your adjusted gross income. Contributions to certain organizations, such as nonprofit cemeteries or veterans organizations, are limited to just 30 percent of your adjusted gross income. For the 2018 tax season, the tax brackets changed, but the calculations for itemized deductions remains the same. Standard deductions also rose with single and married couples filing separately getting a $12,000, married filing jointly getting $18,000 and head of household qualifying for $24,000.
Assuming the tax code quoted is accurate it begs the question, why would clergy or elders want to obtain permission from the government to be exempted from a tax they do not owe?You can be sure the early church described in the Book of Acts and throughout the New Testament knew better than to seek “tax-deductable status” from either King Herod or the Emperor of Rome.
Mark 12: 15-17 gives us a perfect illustration from Jesus regarding paying taxes. The Pharisees and Herodians asked Jesus, “is it right to pay the imperial tax to Caesar or not? Should we pay or should we not?” But Jesus knew their hypocrisy asked, “…why are you trying to trap me?” Jesus said,“Bring me a denarius and let me look at it.” They brought the coin as he asked them, “Whose image is this and whose inscription?” “Caesar’s,” they replied. Then Jesus said to them, “Give back to Caesar what is Caesar’s and to God what is God’s.” No mention of a “tax-exempt” status.
It is ironic that even those responsible for collecting taxes in the United States ask a similar question. Quoting Steve Nestor (Senior Officer), alongside many other Internal Revenue Service employees have wondered the same thing:
“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.”
(Steve Nestor, IRS Senior Officer, IRS Publication 526, quoted by Peter Kershaw, In Caesar’s Grip, self-published, 2000; See also Thomas Lake, Romans 13 In a Constitutional Republic, Xlibris Corporation, 2011, p. 9, ISBN: 9781456846886)
First, as seekers of truth, we need to acknowledge that many pastors and churchgoers are in denial about the truths of the 501c3 Corporation. Barbara Ketay, a lawyer at the Biblical Law Center, wrote the following:
“O.K. Pastors, Evangelists, Missionaries, Deacons, Trustees, Elders… listen up! Let’s stop all the hocus-pocus, the illusions, the scams, the fairy-tales and the outright lies regarding what the 501(c)(3) incorporated church is and is not. For a change, let’s deal with facts. For those of you who don’t understand “facts,” in the legal arena, facts are used and are supported by documented evidence which would be admissible in a legitimate court of law. Facts are not hyperbole! [Exaggeration]”
(Barbara Ketay, “The 501(c) (3) Incorporated Church: The Real Truth,” Biblical Law Center, retrieved May 18, 2018, [biblicallawcenter.com/wp-content/uploads/2012/08/THE-501c3CHURCH.pdf])
Ketay is correct and, as a lawyer, has a good understanding of what a corporation is and is not. Ketay goes on to list out the facts about what a 501c3 church corporation is according to the state’s legal definition:
- The creator of a corporation is the State.
- The State is the sole authority and sovereign head over the corporation.
- The corporation is subject to the laws of the State which limits its powers.
- The corporation has no constitutionally protected rights.
- The corporation is an artificial person.
- The corporation submits to a State Charter declaring it is a creature of the State.
- The corporation is created for the benefit of the public.
- The corporation is a State franchise.
- The corporation is a privilege granted by the State.
It’s been far too long that pastors, evangelists, deacons, elders, missionaries, and churchgoers have sat in ignorance on this matter, so read this carefully: You have a 501c3 “incorporated” status, which means your church (ministry or mission)is a Corporation of the state, and here is the message that lawyers and the IRS are all trying to get you to understand about the contract the church is under:
- The creator of your church is the State.
- The State is the sole authority and sovereign head over your church.
- Your church is subject to the laws of the State which limits its powers.
- Your church has no constitutionally protected rights.
- Your church is an artificial person.
- Your church submits to a State Charter declaring it is a creature of the State.
- Your church is created for the benefit of the public.
- Your church is a State franchise.
- Your church is a privilege granted by the State.
As a born again Christian you should immediately see the Biblical violations a 501c3 incorporated church is committing. Simply put, there is no Biblical justification for following decades of tradition or more likely the money generated from a blatant compromise with the government.
Once the pastor and/or elders submit and receive 501c3 approval, it does not matter who the pastor says is his creator when he’s up on the pulpit because he signed a document denouncing the Lord Jesus Christ as his creator, and put the state in Christ’s seat. It does not matter who the pastor says is the sole authority and sovereign head over the church he’s preaching to because he signed a document declaring that the State has sole authority over the church. It does not matter who the pastor says gives Christians liberty because he signed a document stating that no liberties can be taken within the church unless approved by state-granted privileges. The screams of violation against the Gospel of Christ are already deafening, and we’re just getting started at looking over the truth behind 501c3.
Ketay continues to point out:
“A 501(c)(3) corporation, being an artificial person, is not considered a person under the First Amendment to the United States Constitution (religious liberty clause) or under the Fifth Amendment to the United States Constitution (protection against self-incrimination clause). Therefore, an incorporated church has NO First or Fifth Amendment rights. In the case Johnson vs. Goodyear, 127 Cal.4 (1899): ‘A corporation, being an artificial person, only has rights within the meaning of the due process [judicial decision] and equal protection clauses of the Fourteenth Amendment to the United States Constitution and similar provisions of State constitutions and within the meaning of state statutes.'”
(Barbara Ketay, “The 501(c)(3) Incorporated Church: The Real Truth,” Biblical Law Center, retrieved May 18, 2018, [biblicallawcenter.com/wp-content/uploads/2012/08/THE-501c3CHURCH.pdf])
To clarify, Ketay is saying the church has no constitutional rights once you become a 501c3. You have no First Amendment freedom of speech or freedom of religion rights and you have no Fifth Amendment rights which means the state can hold you as a witness against yourself to sentence you for any crime they choose. (This is not to say our government will do that, but I’m pointing out that they have the legal power to do that under the 501c3 contract.)
After the 501c3 contract is established, you are now a corporate soul, which means you only have privileges (not freedoms) that are granted by the judicial system according to the regulations of your contract. At that point, the IRS has full power to remove your privileges whenever they choose, and for any reason. This means if the IRS says you cannot say something from the pulpit, then you do not have any legal grounds or constitutional rights to argue against the State, and you are bound by lawful contract to keep silent.
Even worse than signing the 501c3 contract are preachers that may say: “…if the IRS ever tells me I cannot preach what I want then I am just going to ignore them and preach the truth!” Then they quote Acts 5:29, “We ought to obey God rather than men.” We agree as a man/woman of God you ought to obey God rather than men, unless you signed a contract stating that you will obey men rather than God. Christians, read this carefully: Contracts are not just something you scribble your name on; they are your binding word, meaning that you have given your word to do and abide by everything listed out in that contract, which also means that if a pastor signs the 501c3 contract, and refuses to keep silent on matters commanded by the IRS, then they are engaging in deception, which God clearly states is in an abomination in His sight.
[Excerpts from Christopher Johnson 3/13/2019: http://www.creationliberty.com/articles/501c3.php]
Lyndon B. Johnson: No ally of the Church
The Johnson Amendment
President Johnson was a shrewd and cunning politician and along with his backers, well appreciated how easily modern religion would sell out to the government in order to be tax free. President Franklin D. Roosevelt said it best, “In politics, nothing happens by accident. If it happens, you can bet it was planned that way.”So, as part of his political agenda, Johnson had it in mind to silence the church and eliminate the significant influence the church had always had on shaping “public policy.”A Freemason as well as a Member of the Council on Foreign Relations he ascended to the presidency with the support of his puppet-masters.
Although Johnson publicly proffered tax exempt status as a favor to religious organizations the favor came with strings attached which today are governmental shackles. Today, the effects of 501c3 acceptance in America is devastating as silence reigns in the place of opposition to New World Order agenda’s in government. Today, most all religions in America are 501c3 tax-exempt, and these organizations are prohibited from addressing any vital issues as they are government controlled and regulated organizations under the mighty iron claw of the Internal Revenue Service.
Section 501(c)(3) of our nation’s tax code gives tax-exempt status to a church as long as it “does not participate in, or intervene in (including the publishing or distributing for statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
In 1954, Senator Johnson’s motivations for the amendment are very clear. Around the time this amendment was introduced, Johnson had faced some political difficulties from certain organizations in his home state. “Senator Lyndon B. Johnson of Texas forced the amendment out of his anger that [two local] Texas non-profit groups had supported his primary opponent.”There you have it. “The IRS rule that strips tax exemption from churches engaged in electioneering was born of Lyndon Johnson’s Texas politics, not the U.S. Constitution.
Our nation once had a longstanding tradition of church involvement in the political activity of the day. It was previously commonplace for pastors to preach about political issues and candidates.For the first century and a half of our nation’s history, ‘election sermons’ were commonplace in which pastors appealed to their congregations to support or oppose particular candidates based on their positions on issues. Religious leaders did not merely speak about moral principles alone – they encouraged church members to take specific action in the voting booth to support those principles.
History now includes the last 62 years, which, of course, tell a very different story. The IRS first began closely regulating the political activity of 501(c)(3) organizations in 2004. The IRS website lists prohibited activity: in part, “contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity.”
A Modern Era Example:
In Branch Ministries v. Rossotti, the District of Columbia Circuit Court affirmed the first instance in which the Internal Revenue Service ever revoked an organization’s tax-exempt status. 211 F.3d 137, 139 (D.C. Cir. 2000). A church “placed full-page advertisements in two newspapers in which it urged Christians not to vote for then-presidential candidate Bill Clinton because of his positions on certain moral issues.” This prompted an IRS inquiry and examination from 1992-95, which ended in the revocation of the Church’s tax-exempt status, whereupon the Church and its pastor sued the IRS. The Church argued that the “the revocation violated [the church’s] right to free exercise of religion guaranteed by the First Amendment and the Religious Freedom Restoration Act.” In response to the church’s concerns about the implications of the IRS’s decision, the court stated, “because of the unique treatment churches receive under the Internal Revenue Code, the impact of the revocation is likely to be more symbolic than substantial.
Dr. Jay Sekulow, summarized the implications of the 1954 Johnson Amendment by calling it a “-year-old federal tax law that prevents religious leaders from truly exercising their constitutionally-protected free speech rights when they act in their official capacity as a pastor or head of a religious, tax-exempt organization.” The purpose of the IRS was “to collect revenue for the general treasury,” but this amendment has turned the organization into the “speech police.”
The Trump Factor:
Responding to compliments about his election victory and support from evangelical voters, President Donald Trump told Christian Broadcasting Network’s founder Pat Robertson that he had signed an order to empower religious leaders to speak up politically. Quoting the President, “We’ve really helped because I’ve gotten rid of the Johnson Amendment, now we are going to go try to get rid of it permanently in Congress, but I signed an executive order so that now people like you that I want to hear from, ministers and preachers and rabbis and whoever it may be, they can speak. You know, you couldn’t speak politically before; now you can. And I want to hear from you and others that we like.”
While the President does not have the constitutional authority to change the amendment, he did sign an executive order that tells the Treasury Department to be lenient in its enforcement of current law against religious organizations. Specifically:
“The Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury.”
The order defines adverse action as the imposition of any tax or tax penalty, delay or denial of tax-exempt status, disallowance of tax deductions for contributions made to the charitable organizations, “or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit.”An array of experts and groups said Trump’s order doesn’t achieve much.
In order to revoke the amendment, the President is working with Representative Steve Scalise (R-La.) as a member of the Ways and Means Committee to sponsor the needed legislation.
Read part two of this article here: The National War Council: The Truth About 501 C 3’s – Update: Confirmation to the Johnson Amendment
Joseph “Jim” Stockstill
The Unknown Prophet in Texas
“National War Council” – Chairman, Formation Committee
“For the weapons of our warfare are not carnal but mighty through God…”
II Corinthians 10:4