THE INFLUENCE OF TAX EXEMPT STATUS ON THE LOCAL CHURCH’S FINANCIAL STRUCTURE

Pastor Jason Cooley
Copyright © July 8, 2011
Left click the following links to go directly to the websites held
in trust by Jason Cooley, Pastor/Trustee of Old Paths Baptist church:
http://oldpathsbaptistchurch.org/
http://pastorcooley.sermon.net/sermonid/2660713
Pastor Cooley preaches the whole counsel of God, but the following will link
you to four great sermons he has preached relevant to church and state issues:
“Do We Believe in the All-sufficiency of Scripture?”
“Whose House Is It Anyway”
“Are You Heavenly Minded or Earthly”
“The Method Matters to God”
These sermons are also on the “Sermons” page at the top of this website

Many believers say that incorporating with the government has had no effect on their churches. They would even dismiss the notion of any impact incorporating has on their local church. IFB churches will state that incorporation is no big deal and does not change anything. They do not recognize the effects of incorporation on the internal workings of the church. This article will deal with some implications of incorporating a local New Testament church and seeking tax exempt status and how it has changed or altered the simplicity of the local churches financial dealings.

Incorporated churches will look to outside sources to produce revenue for their corporation (church). Yes, they treat the local church more like a business than a spiritual body or called out assembly of Jesus Christ. Many incorporated churches will look for fundraisers and other revenue generating schemes to fund their corporation. They use their government granted tax exempt status for a public fundraiser. They go to the world and in essence beg the world for money to fund God’s church. Imagine how this must grieve the Lord to see members of his body or bride go to the world for the financial needs of the church instead of going to God in Heaven to meet all their needs

This is a clear promise from God’s Word that he will supply all of our needs:  “But my God shall supply all your need according to his riches in glory by Christ Jesus” (Philippians 4:19). Picture this if you were married and your wife was standing on the street corner asking others for money to care for her because her husband could not provide for her. You would come to your wife and say “Why have you done this ? Have I not always cared for you and met your needs? You have never been without . Why would you shame me so?” I believe the Lord is saying the same thing from Heaven, knowing the answer because he is God but posing the question to us so that we search our hearts to see that we have strayed from simple bible faith in trusting God to meet the needs of HIS CHURCH.

Here is an example of a corporate church fund raising scheme: “Eat at the Wendy’s (by Menards) next Wednesday, July 13, from 5:30 PM (before church service) to 9:30 PM (right after the service). They will donate 15% of their sales during those hours to our Bus Ministry, so please patronize them at this time especially! Please remember to tell the cashiers (inside or at the drive-thru window) that you are from _______Baptist Church (the church that runs the SS Buses), and give them one of our tracts. Please also complete the phone survey on the back of the receipt. (And then get a $2 discount coupon on your next visit by entering a code on the receipt.)”

This church by the way is a soul winning church, where no doubt the pastor preaches the Word of God and his people have a zeal for the Lord and are not aware of their entanglement with the world’s model of fundraising. They are blinded to the effects of the 501c3 or tax exempt status. They are partnering with a worldly organization to fund  God’s holy church. It is in essence a partnership with the world. We are warned in scripture not to be a friend to the world system:

James 4:4: “Ye adulterers and adulteresses, know ye not that the friendship of the world is enmity with God? whosoever therefore will be a friend of the world is the enemy of God.”
James 4:5: “Do ye think that the scripture saith in vain, The spirit that dwelleth in us lusteth to envy?”

Scripture clearly shows that we are lusting when we are friendly to this world system. Many corporate churches are building empires and not simple Bible preaching churches. So, in other words, many churches are going to the world to meet their financial obligations. The problem is that churches have built kingdoms and are weighed down with such debt like a corporation that they have to generate revenue to compensate for that. The problem really lies in leaving the simplicity that is in Christ Jesus and his plan of giving for the local church. God’s Plan to provide for the local church is as follows:

1 Corinthians 16:2: “Upon the first [day] of the week let every one of you lay by him in store, as [God] hath prospered him, that there be no gatherings when I come.” Many churches will adhere to tithing and or giving whatever the Lord lays on their hearts which would mean give it all if God wants it. 2 Corinthians 9:7: Every man according as he purposeth in his heart, [so let him give]; not grudgingly, or of necessity: for God loveth a cheerful giver.” Members are instructed by God to give because of love not because they forced too upon some kind of guilt trip. I put it simply to my people if you Love God you will give to his work and you will give what GOD tells you to give. This is direct obedience to God. This is Gods pattern for the local church and the 501c3 corporate model and tax exempt model has changed all that in many churches today. We look to the world’s model instead of God’s model.

Baptist churches need to leave the corporate model and organize in a way that honors God. PASTOR WHETHER YOU WANT TO ADMIT IT OR NOT THE CORPORATE MODEL HAS CAUSED YOU TO LEAVE THE SIMPLICITY OF GIVING IN THE CHURCH AND CAUSED YOU TO EMBRACE A WORLDY MODEL THAT IS OUTSIDE OF SCRIPTURAL AUTHORITY.

The second great effect the corporate model has had on many churches is the lust for buildings and property. As we have seen, many corporate churches today have used their tax exempt partnership with the federal government to hold fundraisers. We see many churches today that have left the simple process of a meeting house and went to a huge almost cathedral like monstrosity of a building. The churches are strapped with debt and the pastor has a constant concern of how he will keep the corporation afloat. The Lord’s church should not be bogged down with debt.

As a sidenote, there are many churches out there today that have millions of dollars in property. That would not be possible if was not for their state property tax exempt status. The taxes alone on the properties that are worth millions of dollars would be enough to cripple the tax exempt church if the government every would withdraw their tax exempt status. State property tax exemption is not related to the federal 501c3 status, but, as does 501c3 status, the property tax exemption goes to motivation for acting contrary to God’s principles as laid down in his word.

State churches are therefore beholden to the civil government. To prove that, one needs only look at the paper work for tax exempt status. The devil is in the details and when you look at the paperwork you will see that there are rules for the state church to follow or risk the heavy hand of the IRS to come in and take away their exempt status. To tax or to exempt from taxation is to show that sovereignty and authority over the taxed entity. For instance, the states are not allowed or do not have the authority to tax the  land used for the federal government even though it lies in their territory. Now the federal government does not have to file paperwork with the state because the state recognizes that they are not taxable.But when churches sign up for the tax exempt status they are agreeing with the state that they have the right to tax them but the state has granted them tax exempt status.  One need only look at history and see that Kings like Solomon and others would tax those territories that they took over and the people accepted the tax because they recognized his sovereignty over them. All of this information below can be found at this link: http://www.irs.gov/pub/irs-pdf/p1828.pdf

What is traded in for this tax exempt status? What do churches have to do? Here is the first rule that sticks out: They must not devote a substantial part of their  activities to attempting to influence legislation. This legislative rule was added after Lyndon B Johnson-when in Congress in 1954-pulled a fast one while most of Congress were leaving for break he introduced this legislation to quiet the preacher. Well this would blow the famous Baptist preacher John Leland from the famed Leland–Madison battle for the first amendment, right out of the water. Baptists in American history have always been involved in influencing legislation. SO this is used as hush money to keep preachers in line.

Another red flag to have state granted tax exempt status removed is this: The organization’s purposes and activities may not be illegal or violate fundamental public policy. A local church will preach against public policy and will reprove the wicked candidates that are running for public office and will preach against wicked public policy if they are obedient to God.

Another possible revocation of tax exempt status is required should a 501c3 organization not give equal time to opposing candidates. So if a state church had a Ron Paul speak, that church would have to give equal time to a Barrack Obama or face losing her 501c3 status.

Regardless of whether you would put any politician on your pulpit which I would not, why is a local church following government rules when Baptists historically believed in the All sufficiency of scripture as their rule of faith and practice? The answer is because they have accepted a granted tax exempt status and it has impacted their financial dealings and silenced their pulpits.

The reason they have allowed this is so they can receive donations from wealthy people who wish to have tax write offs. So they give them cars and money and other items of value to write them off. It is an unholy alliance with the state. But when you talk to the average fundamental Baptist pastor they have no intention of dropping the corporate tax exempt model because it has allowed them to build and empire. Then that same pastor will tell his rich men of the church not to tell him how to run the church because they know how to run their businesses but this is the HOUSE OF GOD. When in actuality the pastor is the president of the corporation and he is really being hypocritical in saying that. Those wealthy men understand how to run a business and make wise business decisions.

The local new testament church is a spiritual entity and is not to be ran like a business entity. But many Big name preachers will not give up their ability of write off and possibly lose big givers to the religious organization. Instead, they choose to organize or remain organized in a way that dishonors God as the sovereign head of the church. By the way, there is a Biblical and legal way for a church to utilize property for the benefit of the Lord Jesus Christ with the pastor as the man entrusted to oversee the local church which remains a spiritual, as opposed to a legal, entity.

In  following the tax exempt corporate model, Pastors of corporate 501c3 churches have changed the motives for giving. Now many people give for the write off they will receive not in obedience and love for the Lord as found in  2 Corinthians 9:7: “Every man according as he purposeth in his heart, [so let him give]; not grudgingly, or of necessity: for God loveth a cheerful giver.” But remember the motives of our heart will be judged at the Judgment Seat of Christ. 1 Corinthians 4:5: “Therefore judge nothing before the time, until the Lord come, who both will bring to light the hidden things of darkness, and will make manifest the counsels of the hearts: and then shall every man have praise of God.” These pastors will answer to God for their clear disobedience to his Word and allowing the government authority in the local church. Let Jesus Christ be sovereign in his church and let churches in America get back to the simple model of giving.

For more information on organizing a church in a way that honors God contact Born Again believer and licensed attorney Brother Jerald Finney.

God Desires that Nations to Choose to Glorify Him


Jerald Finney
Copyright © July 23, 2011


Click here to go to “Self-exam Questions: God Desires that Nations Choose to Glorify Him”


Preface

This article is a continuation of Jerald Finney’s systematic development of the doctrines, application, history, and legalities of “separation of church and state.” See En1 for more on this matter; See En2 for information on books by Jerald Finney which thoroughly examine “separation of church and state law.” This article is an edited version of Section I, Chapter 6 of the book God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (Link to preview of God Betrayed). (Link to Contents of “Separation of Church and State Law” Blog which has links so that the new follower can start his study at the beginning. “Line upon line, precept upon precept.”).


God desires nations to choose to glorify Him

20

The Bible, especially in the Old Testament, deals extensively with nations and shows that God ordained nations, that He is over every nation, but that He gives every nation a temporary choice of whether to submit itself to the sovereign God. The following verses, among many others, prove that God is over all nations and wishes each nation to choose to glorify Him:

“When the Most High divided to the nations their inheritance, when he separated the sons of Adam, he set the bounds ofOld Testament Nations the people according to the number of the children of Israel” (De. 32.8).

“Be wise now therefore, O ye kings: be instructed, ye judges of the earth. Serve the LORD with fear, and rejoice with trembling. Kiss the Son, lest he be angry, and ye perish from the way, when his wrath is kindled but a little. Blessed are they which put their trust in him” (Ps. 2.10-12. See Ps. 2 in its entirety).

“The wicked shall be turned into hell and all nations that forget God” (Ps. 9.17).

“If the foundations be destroyed, what can the righteous do” (Ps. 11.3)?

“Make a joyful noise unto the LORD, all ye lands. Serve the LORD with gladness: come before his presence with singing. Know ye that the LORD he is God: it is he that hath made us, and not we ourselves; we are his people, and the sheep of his pasture” (Ps. 100.1-3).

17“The LORD is high above all nations, and his glory above the heavens” (Ps. 113.4).

“Righteousness exalteth a nation, but sin is a reproach to any people” (Pr. 14.34).

“A wise king scattereth the wicked, and bringeth the wheel over them” (Pr. 20.26).

“Mercy and truth preserve the king: and his throne is upholden by mercy” (Pr. 20.28).

“Take away the wicked from before the king, and his throne shall be established in righteousness” (Pr. 25.5).

“When the righteous are in authority, the people rejoice: but when the wicked beareth rule, the people mourn” (Pr. 29.2).

“Behold, the nations are as a drop of a bucket, and art counted as the small dust of the balance: behold, he taketh up the6 isles as a very little thing…. All nations before him are as nothing; and they are counted to him less than nothing, and vanity…. It is he that sitteth upon the circle of the earth, and the inhabitants thereof are as grasshoppers; that stretcheth out the heavens as a curtain, and spreadeth them out as a tent to dwell in: That bringeth the princes to nothing; he maketh the judges of the earth as vanity. Yea, they shall not be planted; yea, they shall not be sown: yea, their stock shall not take root in the earth: and he shall also blow upon them, and they shall wither, and the whirlwind shall take them away as stubble. Lift up your eyes on high, and behold who hath created these things, that bringeth out their host by number: he calleth them all by names by the greatness of his might, for that he is strong in power; not one faileth” (Is. 40.15, 17, 22-24, 26).

“But thou [Jeremiah] shalt say unto them, This is a nation that obeyeth not the voice of the LORD their God, nor receiveth correction: truth is perished, and is cut off from their mouth” (Je. 7.28. See the entirety of Je. 7).

10At what instant I shall speak concerning a nation, and concerning a kingdom, to pluck up, and to pull down, and to destroy it; If that nation, against whom I have pronounced, turn from their evil, I will repent of the evil that I thought to do unto them. And at what instant I shall speak concerning a nation, and concerning a kingdom, to build and to plant it; If it do evil in my sight, that it obey not my voice, then I will repent of the good, wherewith I said I would benefit them” (Je. 18.7-10).

Paul speaking to those at Lystra who would have worshiped Paul and Barnabas because Paul healed the impotent man on his 1st missionary journey said: “And saying, Sirs, why do ye these things? We also are men of like passions with you, and preach unto you that ye should turn from these vanities unto the living God, which made heaven, and earth, and the sea, and all things that are therein: Who in times past suffered all nations to walk in their own ways. Nevertheless he left not himself without witness, in that he did good, and gave us rain from heaven, and fruitful seasons, filling our hearts with food and gladness” (Ac. 14.15-17).

Paul said in his sermon on Mars’ hill: “God that made the world and all things therein, seeing that he is Lord of heaven and earth, dwelleth not in temples made with hands; … And hath made of one blood all nations of men for to dwell on the face of the earth, and hath determined the times before appointed, and the bounds of their habitation; That they should seek the Lord, if haply they might feel after him, and find him, though he be not far from every one of us: For in him we live, and move, and have our being; as certain also of your own poets have said, For we are also his offspring” (Ac. 17.24, 26-31).

“Which in his times he shall shew, who is the blessed and only Potentate, the King of kings, and Lord of lords” (1 Ti. 6.15).

21When one studies the relevant principles of God and history recorded throughout the entire Old Testament, he discovers that God ordained the nations and civil government, laid out the jurisdiction of civil government, holds every nation to account in accordance with the nation’s recognition of Him as the one and only God (as opposed to the one and only god, Satan) and according to the nations application of His principles, and makes plain the consequences of obedience and the consequences of disobedience by a nation. He tells the story of the nations from the beginning until the end. One can look at Israel to see where humanity is on God’s time line as revealed in the Word of God.

13Obviously, civil governments still exist and still have responsibility under God to rule for Him, but He still gives every civil government a choice of whether to go by His or Satan’s principles. “[The civil magistrate] ought to cherish, as a foster-father, the Lord Jesus, in his truth, in his saints, to cleave unto them himself, and to countenance them even to the death, yea, also, to break the teeth of the lions, who offer civil violence and injury unto them” (Roger Williams and Underhill, The Bloudy Tenent of Persecution for Cause of Conscience Discussed and Mr. Cotton’s Letter Examined and Answered (London: Printed for the Society, by J. Haddon, Castle Street, Finsbury, 1848 (Reprint), p. 100).

Sadly, civil governments do not choose, at least for any significant period of time, to be “under God,” to guide their actions by His principles. Patrick Henry [who led the fight in Virginia against ratifying the Constitution, and was a great defender of the Baptists who were persecuted in Virginia even though he was in favor of a state-church] understood this:

“Where are your checks in this government. Your strongholds will be in the hands of your enemies.  It is on the supposition23 that your American governors shall be honest, that all the good qualities of this government are founded; but its defective and imperfect construction puts it in their power to perpetrate the worst of mischiefs, should they be bad men. And sir, would not all the world, from the eastern to the western hemispheres, blame our distracted folly in resting our rights upon the contingency of our rulers being good or bad? Show me that age and country where the rights and liberties of the people were placed on the sole chance of their rulers being good men, without a consequent loss of liberty.” (John Eidsmoe, Christianity and the Constitution: The Faith of Our Founding Fathers (Grand Rapids, Michigan: Baker Book House, 1987), p. 309, quoting Patrick Henry, Virginia Ratifying Debates; quoted by Tyler, Patrick Henry, p. 328.).

Endnotes

En1 Why should believers, and especially pastors, be concerned about the area of church and state law? Because only through knowledge can they avoid dishonoring the Husband/Bridegroom/Head of their local church body and thereby failing to achieve their God-given goal—glorifying God and pleasing Him.

These articles systematically examine the biblical doctrines of church, state, separation of church and state and the application of those doctrines in America. For believers and churches, the information presented is—according to God’s Word—of great importance to our Lord. By reading and studying each article using the Bible as the standard, a believer will discover that the biblical principles are correct as presented. By studying the historical and legal facts presented—without bias, prejudice, illicit motive, or an overriding opposing agenda which has a vested interest in maintaining a status quo due to loss of finances, support or something else—and examining those facts in light of biblical principle, a qualified believer (a believer who has the necessary biblical, historical, and legal qualifications and education) can understand that the conclusions are correct.

That said, understanding the biblical principles, relevant history, and legal principles and facts is, first, impossible for one who is not a born again believer who is walking in the Spirit, and, second, daunting for even the spirit filled follower of Christ. Years of honest, open minded study is required to achieve the correct knowledge and understanding of all facets of church and state law. First, one must interpret Scripture correctly (See 2 Ti. 2:15) as to the relevant topics. After mastering the biblical principles, one must then labor through the annals of history, and the intricacies of law. In order to be qualified to comment upon the law, one must have an extensive legal education. He must understand how to do legal research and how to reach correct legal conclusions. Legal commentary by a pseudo lawyer can sound good to the untrained, while he may be correctly understood as frivolous and unlearned and probably heretical by the educated believer.

This is not to say that a non-lawyer cannot understand the legal and historical aspects of spiritual matters. In fact, the author knows some pastors and other believers who, having already correctly divided the Word of Truth and determined to seek to please God in all matters, have open minds and who have eagerly sought truth in the historical and legal church and state law arena. He is working with such a young pastor at this very moment. He is a brilliant young man who had mastered the Scriptures and Baptist history before the author met him. He excels the author in those matters, as do some other pastors and believers known by the author. Unlike most pastors, he does not have the disadvantages of having gone to either a secular or ecclesiastical (Baptist or otherwise) institution of higher learning. Secular colleges and universities usually corrupt even the most devout child of God; and religious colleges, institutions, and seminaries generally (with few exceptions, one of which the author has personal knowledge of)—by either mixing an ample dose of humanism with whatever biblically correct teaching they dose out; or by having totally having abandoned truth—likewise usually corrupt their students to one degree or another.

On the other hand, the author is vexed by what he reads in some books and websites concerning church and state law; particularly by some vicious, unfounded attacks upon the Biblical Law Center Declaration of Trust by unqualified, biased assailants who are attempting to mislead believers and churches through incorrect biblical and legal analyses and personal attacks upon and outright lies about those with whom they disagree in such matters.

Being a believer alone, even a pastor, does not by itself qualify one to teach on church and state law. The author has been a believer and faithful member of independent Baptist churches since his salvation. He was called by God to go to law school for His glory and to please Him. As a result of that calling, he obtained a Doctor of Jurisprudence degree from one of the best law schools in the country and has practiced law for seventeen years. He has no motive for dishonesty. By design, he has never made a dime above expenses in his work in the church and state law arena. In fact, he has spent tens of thousands of dollars with total income of at most three to four thousand dollars in all the years he has worked in this area of law. Because of this he is beholden to no one and nothing but the truth and his Lord and Savior. Since becoming a lawyer, he has devoted untold thousands of hours in biblical, historical, and legal study and analysis of church and state law.

As always, he declares that if anyone can show him where he is in error, he will recant. Honest, loving believers have taught him much and caused him to modify some of his positions. He has also, in his continued studies, modified some of his conclusions and positions. However, he maintains his primary positions because neither he, through his continued studies, or others have shown him to be wrong about his basic church and state law principles and conclusions.

En2 God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (Link to preview of God Betrayed): may be ordered from Amazon by clicking the following link: God Betrayed on Amazon.com or from Barnes and Nobel by clicking the following link: God Betrayed on Barnes and Noble. All books by Jerald Finney as well as many of the books he has referenced and read may also be ordered by left clicking “Books” (on the “Church and State Law” website) or directly from Amazon by going to the following links: (1) Render Unto God the Things that Are His: A Systematic Study of Romans 13 and Related Verses (Kindle only); (2) The Most Important Thing: Loving God and/or Winning Souls (Kindle only); (3) Separation of Church and State/God’s Churches: Spiritual or Legal Entities? (Link to preview of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?) which can also be ordered by clicking the following Barnes and Noble link: Separation of Church and State on Barnes and Noble.