- A church or church ministry must be 501c3 in order to avoid paying taxes.
- A church or church ministry must be 501c3 in order to be tax deductible.
- Churches should comply with all the laws of the land because Jesus said, “Render to Caesar the things that are Caesar’s” (Mr 12:17). Therefore, it is only right for a church to become a 501c3.
- 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)
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. We’ll debunk these myths 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.