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The Truth About Church Incorporation

The Truth About Church Incorporation…

Is a Church required to Incorporate under the Government?

According to the Internal Revenue Code, “a church, its integrated auxiliaries, and conventions and associations of the church are excluded from taxation.” United States Code, Title 26, § 508(c)(1)(A).

Section 508(c) of the Internal Revenue Code provides that churches are not required to apply for recognition of Section 501(c)(3) status in order to be exempt from federal taxation or to receive tax deductible contributions. Churches are automatically exempt from Federal income tax, and contributions to churches are deductible by donors under section 170.

Elsewhere, the IRS states: “Although a church, its integrated auxiliaries, or a convention of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, such an organization may find it advantageous to obtain recognition of exemption (Tax Exempt Status for Your Organization, IRS Publication 557).

Just what “advantage” is there for a church in obtaining 501(c)(3) recognition and thereby exchanging its sovereignty for a subordinate status in relation to the federal government? Most people would answer that such grants the church exemption from taxation. However, we have already seen that the federal government has never been able to tax the Church of Christ; the Church is not exempt from taxation, it is immune. The “advantage” is something else entirely:

“By establishing its exemption, potential contributors are assured by the [Internal Revenue] Service that contributions will be deductible” Tax Exempt Status for Your Organization, IRS Publication 557.

The tragic irony of all this is that, according to the Internal Revenue Code, financial donations to an unregistered, unincorporated church are automatically tax-deductible (26 USC 170-B)! But is this biblical?

“God loveth a cheerful giver.” (2 Corinthians 9:7). But the government promises, “Incorporate, and I will return to you up to thirty-five percent of your tithes and offerings!” And the Bridegroom wept. Now Jesus knows that His bride “purposeth in [her] heart . . . grudgingly, or of necessity.” (2 Corinthians 9:7). God had no respect towards Cain’s offering because he did not give from the heart (Gen.4:3-6).

The IRS, of course, knows very well that it has no constitutional authority over the Church, and that it may not violate the First Amendment protection against government interference with the Church. In fact, the IRS may not violate the constitutionally secured rights of any American Citizen or group of Citizens, and is able to gain jurisdiction only when such is given to it voluntarily. Thus, the IRS holds out the unbiblical “advantage” of 501(c)(3) corporate status as bait to clergy ignorant of the law in hopes that these men will “bite,” thereby placing themselves and their congregations firmly on its jurisdictional hook…1

More Articles and Links:
Unregistered Baptist Fellowship
30 ways that the IRS tries to Control… By Dr. Greg Dixon
The Free Church
Church Incorporation: The Debate
Churchplanting Village: Incorporation and legal issues
State Churches
Church Incorporation- The Great Apostasy
Startchurch: Church Incorporation
Should you incorporate? If so, here’s how
501c3 Church Incorporate and Start a Church