501(c)(3), Is It A Snare?

The American government has recognized that churches perform valuable social functions and, as a result, tax exemption is a long-held American tradition.”

 What is 501(c)(3) Exemption Status?

This article may raise more questions than answers, but it is a conversation we are having inDavidia, nevertheless. 

“In short, if an organization, including churches, receives 501(c)(3) exemption status from the IRS it is recognition that they are exempt from federal income and property taxes. In addition, donors who make charitable contributions to 501(c)(3) organizations may deduct the contribution amount from their taxable income.”

How This Affects Marriages If At All

Some believe the greatest threat of 501(c)3 to churches is that they might be forced to marry homosexuals. Is this true? 

“Reverend Thronton  “So, how is it that those who believe marriage has been, is, and always should be between a man and a woman would continue to serve as an agent of the government in this business of marriage? Even if the minister officiates at a wedding he deems acceptable on the basis that the couple before him is a man and a woman, should he act in the role of the state’s agent in doing so?

Some ministers have separated themselves from signing the marriage forms of the state for some time. There is a movement that asks ministers to pledge to separate civil marriage from Christian marriage. Some religious traditions already maintain that separation”.

“This is another issue which requires drawing some important lines to balance competing and equally legitimate concerns.. A county clerk who refuses to issue licenses for same-sex marriages occupies a different position than a minister, rabbi or iman who refuses to perform such marriages in his or her own congregation. The former is using his public office to advance his religious beliefs. The latter is protecting the autonomy of his religious institution. This will be an important debate but I perceive no immediate threat to the tax-exempt status of congregations which oppose same-sex marriages.

“Finally, it must be emphasized that religions, and those who adhere to religious doctrines, may continue to advocate with utmost, sincere conviction that, by divine precepts, same-sex marriage should not be condoned. The First Amendment ensures that religious organizations and persons are given proper protection as they seek to teach the principles that are so fulfilling and so central to their lives and faiths, and to their own deep aspirations to continue the family structure they have long revered. The same is true of those who oppose same-sex marriage for other reasons.”


Are Churches Required to File for Tax Exemptions

The following is taken directly from the 501c3 Tax Guide for Churches & Religious Organizations:

“Religious Organizations 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.

“Recognition of Tax-Exempt Status Automatic Exemption for Churches Churches that meet the requirements of IRC Section 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.

“Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because this recognition assures church leaders, members and contributors that the church is recognized as exempt and qualifies for related tax benefits. For example, contributors to a church that has been recognized as tax exempt would know that their contributions generally are tax-deductible.

“In the US, under the Federal tax code, churches are 501(c)(3) charities, and pay no federal tax, for their normal church related business.”

 Again, the motivation is purely financial. While churches may technically be tax exempt, the members’ donations in tithes and offerings cannot be deducted from their personal income tax reports unless they can prove to the satisfaction of the IRS that their charitable donations were given to a legitimate church.”

A General Religious Perspective

Is This Unneccesary Hysteria?

“It is fallen, it is fallen, Babylon that great city, and is become the habitation of devils, and the hold of all foul spirits, and a cage of every unclean and hateful bird.

“For all nations have drunken of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich of the abundance of her pleasures.

“And I heard another voice from heaven say, Go out of her, my people, that ye be not partakers of her sins, and that ye receive not of her plagues”

For her sins are come up into heaven, and [Yahuwah] hath remembered her iniquities.”(Revelation 18″

“The once separate churches of the United States have become joined to the government. They can now be forced to spread government propaganda – even that which conflicts with their denomination’s moral standards. In October, 2014, the city of Houston, Texas got court orders against five pastors who had encouraged their church members to take political action against the Houston Equal Rights Ordinance. This legislation granted civil protection to homosexuals, bisexuals, and transgender citizens. The court orders were extremely broad. They demanded all sermons, speeches, and correspondence (including private text messages) dealing with the legislation, the petition against it, homosexuality, gender issues and the Mayor, Annise Parker. These orders included not just material presented by the pastors, but included anything revised or approved by them or even in their possession.

One IRS agent, Peter Kershaw wrote:

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.7

 “Presdent of the Congressional Black Caucus, spoke of the conference, explaining to an MSNBC news reporter: We’ll have representatives from nine denominations who pastor somewhere in the neighborhood of about 10 million people and we are going to, first of all, equip them with the information they need to know about what they can say and what they cannot say in the church that would violate their 501(c)(3) status with the IRS. In fact, we’re going to have the IRS Administrator there, we’re going to have the Attorney General, Eric Holder, there, we’re going to have the lawyers organization from around the country there, the ACLU [American Civil Liberties Union] – all giving ministers guidance on what they can and cannot do.8″

NKJV  Cor 6:9-10   Do you not know that the unrighteous will not inherit the kingdom of God? Do not be deceived. Neither fornicators, nor idolaters, nor adulterers, nor [a]homosexuals, nor [b]sodomites.”

 Many fear that registering as a 501(c)3 organization opens churches to many other compromising positions, beside the homosexual threat.

Source “How did our churches become prey to the civil powers and the homosexuals demands? What is silencing our churches in this melle and forcing them to comply?  Some declare it is through the 501c3 law. In the case of Brach Ministries v. Rossotti, Branch Ministries, a church applied for and obtained 501(c)(3) exemption. The church was later found guilty of intervening in a political campaign, and its tax-exempt status was revoked.

In this instance, the revocation went back to the beginning of the tax year where it was found to be out of compliance. Had the church not applied for 501(c)(3) exemption, it would have likely been deemed a non tax-exempt organization from the beginning of its existence.

This “test” provides basic guidelines to help the IRS and courts determine which organizations can be classified as a church for tax purposes. Some of the points are weighted more heavily than others. These points include:

  1. A distinct legal existence – Does your church have its own incorporation and Federal Employer Identification Number (FEIN)?
  2. A definite and distinct ecclesiastical government – Does your church have its own pastor, minister, or ecclesiastical board?
  3. A formal code of doctrine and discipline – Does your church have a set of doctrines and beliefs that your congregants are expected to follow?
  4. Established places of worship – Do your worship services take place in a stable location, preferably a public facility instead of one’s home?
  5. Regular congregations – Do your worship services contain more than 20 people? Are multiple families represented?
  6. Regular religious services – Does your church have regularly scheduled worship services?

Now, there is no set number of “points” that must be met. However, the more points you are able to meet of the 14/15 Point Test, the better chances you have of your organization being classified as a church for federal income tax purposes.”



“Question: “Is it biblical for a church to seek 501(c)(3) incorporation?”

Answer: There certainly are many people and groups which argue against incorporating churches, but is there a biblical argument for incorporation? Jesus told His disciples in Matthew 22:21, “Give to Caesar what is Caesar’s, and to God what is God’s.” This answer was given specifically to the question of whether it was lawful to pay tribute, or taxes, to Caesar. In Jesus’ response, He asked whose image and name was on the money, and, since it was Caesar’s, it was therefore proper to give it back to him.”

If we apply this principle to the church, it will help us determine the answer to the question of incorporation. The church is a body of believers in Jesus Christ. As a body of believers, we are answerable to God for everything we do. We are also answerable directly to God as individual believers, for we “are bought for a price” (1 Corinthians 6:20). In Matthew 17:27, Jesus taught the disciples that, though they were not compelled to pay taxes, it was proper to do so to avoid offense.”

“But the state only has secondary authority over the church and the individuals who comprise it, although certainly not over the direction or purpose of ministry, for that is God’s realm. Most churches own property, which is administered under the state, and while it may not be absolutely necessary to incorporate in order to hold that property, it is a proper way to do so. Gordon Johnson, in his book My Church (1957) wrote, “In our day most of our states in this country demand trustees for the legal procedure of the church.” This is still the case today, and incorporation not only serves as a way to honor the state’s realm of authority, but also serves as a legal protection for the individuals in the body. When property is held and actions are taken in the name of a recognized corporate entity, the individual members of that entity are safeguarded from being held personally liable in court actions that may be brought against the incorporated church.

“One passage that is sometimes used against incorporation is worthy of mention here. First Corinthians 7:23says, “You were bought at a price; do not become slaves of men.” This verse is irrelevant as an argument against incorporation for a couple of reasons. First of all, it is in the context of human slavery, not church organization. Also, verse 24 states that we are to abide in whatever state God calls us, even if that is slavery. Second, it does give us a warning worth considering in our discussion. Some have argued that when a church incorporates, it places itself under the control of the state (being the servants of men). As the various legal battles over church tax exemption in recent years have shown, there is a possibility of a struggle here, even if it is a remote one. The majority of cases that have come up were because key leaders chose to push the limits of the law (sometimes in order to show that the law was being misinterpreted). Certainly, if the state tries to control the ministries of any individual or church, we are obligated to answer as the apostles did in Acts 5:29, “We must obey God rather than men!”

“According to the IRS, a church, or a body of believers, is exempt from taxation by the federal government. It is because of their special protected status that churches have the potential to influence their community and beyond in ways that the government can’t.”

According to the IRS,

“Churches that meet the requirements of IRC section 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.” So it isn’t required for your church to apply for 501(c)(3) in order to be tax exempt.

“Keep in mind, Churches may lobby for legislation or ballot initiatives, but they are prohibited from showing support for political candidates. If a church is shown to be in violation of this restriction, they risk losing their exempt status. What most people don’t realize is that churches and non-profits exist under this definition whether or not they have officially received 501c3 status from the IRS.”

“Note – some advocate that churches seek tax-exempt non-profit status through 508(c)(1)(a) instead of through 501(c)(3). If you are concerned about any of the potential problems mentioned above, 508(c)(1)(a) might be worth looking into.”


Is it possible that in time you may not be able to deny homosexuals their marriage rights, if you are under 501(c)(3)? What a predicament that would be. And at the pace the world is going, that idea does not seem too far-fetched. Now, for most of the churches who fall under the radar and are not yet tried, should they feel comfortable? The homosexual culture is powerful , far-reaching, and scrupulous, needless to explain why. They will try to get their way with as much people as they can someday. It may not be now, it may not be in the near future, but they are sure to unearth every stone. It might be wise to unhinge oneself from this snare before one is tested and find oneself at sea without compass. This might be a reasonable caution if the danger is as grave as some express.

This article is not pretending to have found the answer to the 501(c)3 question. It is written on a non-judgmental basis, and that is, assuming that none of the associations have sought for tax exempt status, whether they have done so or not. And it is not concliding that it is wrong or right to seek tax exempt status either, personal opinions set aside. This is an objective approach in presenting the for-or-against arguments on the subject. Therefore, the underlying question exist for Davidia: Should we or should we not seek tax exemption? Are associations described as churches or religious organizations to begin with? Can the associations meet certain gross receipts requirements to be considered for tax exemption status in the first place? How can associations best serve God and still honor the “God-ordained” authority of the state in a 501(c)(3)relationship.

Yes, there are monetary benefits that an association can gain from exemption that may further aid the work. And because of these benefits in the work of the gospel, are the associations sheltered by the four Angels of Rev 7 from any repercussions on this side of Jordan? If so, are the concerns of some brethren needless? Some have accused the associations of being tight-lipped on their stand in this matter. I do not know this as fact. I would be more than happy to see an association defend its position in some kind of open response if they are already in the tax exempt status, putting all speculations to rest. 

NB: Churches do not have to seek for exempt status because they are by definition, automatically exempt. They seek to put their status in writing, putting it simply, so their members can claim tax deductibles at the end of the year. Because they are “…automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.” This might be one of the motivations among several, for religious bodies applying for tax exempt status from the IRS; that is taking it a step further than the shelter that’s becomes automatically effective as a religious entity. And this is where the problem lies for Davidians who are questioning this move.

So if applying for the tax exempt status is wrong, and the members knowingly benefit from it, then the members are in collusion with this practice and bear much of the culpability.

This topic can certainly be enriched by others who may have more information to share for whatever was mentioned, unavailable, or overlooked in this article. Please share. 


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