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Should the Church be "501 (c3) inc?

Discussion in '2004 Archive' started by C.R. Gordon, Jun 22, 2004.

  1. C.R. Gordon

    C.R. Gordon New Member

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    A few questions...I am taking a business law class.


    Should...
    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 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)
     
  2. Pastor Larry

    Pastor Larry <b>Moderator</b>
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    A church does not have to be. The government permits it; it does not require it. But we must draw a distinction between an official 501c3 and a church. A church is considered 501c3 for the purposes of taxation even if they do not officially register as a 501c3.

    Being tax exempt is a good stewardship of God's money. It is wise for a church to pursue.
     
  3. Kidz-4-HIM

    Kidz-4-HIM New Member

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    Check this out!!!!!!!!!
    Hush Money.org

    Here is just one quote that sums up the 501c3 from their website:
    When a church accepts the 501c3 status, that church:

    Waives its freedom of speech.
    Waives its freedom of religion.
    Waives its right to influence legislators and the legislation they craft.
    Waives its constitutionally guaranteed rights.
    Is no longer free to speak to the vital issues of the day.
    Becomes controlled by a spirit of fear that if it doesn’t toe the line with the IRS it will lose its tax-exempt status.
    Becomes a State-Church.
     
  4. Pastor Larry

    Pastor Larry <b>Moderator</b>
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    Being the pastor of a church that is recognized as t the equivalent of a 501c3, I can assure you without any fear of contradiction that we suffer from none of those things. Sounds like that group has a faulty view. I have told our church many times that we are tax exempt at the pleasure of hte government and anytime they want, they can have it back.

    Part of the perceived problem is that some church think they have a political mandate. They think the pulpit is the place to make political statements from. That is unbiblical. The church is never given the authority to make political statements. We are to preach the word. I have no problem when the word addresses a pressing moral or social issue of the day. But politics has no place in the pulpit. We have more than enough of God's word to preach.

    I speak regularly to the vital issues of the day. Just this past week on FAther's Day, I spoke on teh sanctity of marriage and the sinfulness of homosexuality. In recent weeks, I mentioned the blight of abortion and the fact that I believe a Christian should never vote for a candidate who supports abortion ... I said this in an area that has voted Democrat for eons ...

    I have no fear of becoming a state church. I have no fear of losing our tax exemption. My only commitment is to preach the word, in season and out of season, to reprove, rebuke, and exhort with all longsuffering. I can say what I want. We can worship how we choose. And we pay nothing to the government to do it.
     
  5. C.R. Gordon

    C.R. Gordon New Member

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    I have no disagreement with the premiss, but if the church is going to act like and compete with the world.....................what should Ceaser do
     
  6. JeffM

    JeffM New Member

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    "render unto caesar.."

    Well, for one thing, in America, where we are a republic, with an elected, representative government, we do not have a "Caesar".

    This is were Christians have been misled in my opinion, from years of an oppressive government.

    The founders set up a system of government where the people are the sovereign and the government is merely there to protect life, liberty, property, and the pursuit of happiness of the people. The States created the government for that purpose, and that purpose only. But today, the states and the people exist to support the Federal Government. It has become a predator, preying on helpless citizens. It consumes all it touches.

    In my opinion, when a church receives non-profit status, they waive many of their rights. In early America, the church was the backbone of the entire American culture. They fed the poor, helped the homeless and shared the Lords bounty with the community. We cultivated and raised future God fearing leaders in government. We made sure righteous men took the reins of government for each generation.

    When the income tax was implemented, it instantly turned the government into the master, and the people its servant. How else to protect this system but to silence the very place where peaceful change could be taught?

    Look what has happened since the income tax has been implemented in 1913. Christians took a back seat to politics and it created a vacuum that evil and unGodly men filled. Pastors stopped preaching politics from the pulpit in fear of losing their "tax except status". To explain this phenomena, Christians were taught the doctrine of "religion and politics" don't mix. Well nothing could be further from the truth.

    Our Constitution, though not religious in text, was based on Christian principles. It was the very foundation of our laws.

    Liberty is for a righteous people. It is a gift from God. But how can a person who is not a Christian understand the concepts of Constitutional liberty? They can't and that is why this country and our culture has turned rotten.

    As Christians, we put ourselves in this mess. We backed out of politics, all because we fear losing our tax exempt status. The government has secured its control all they way into our sacred churches.

    Often times I wonder what God thinks of all this. The IRS claiming authority over him and his children.
     
  7. Dr. Bob

    Dr. Bob Administrator
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    501c3 does not have anything to do with tax exempt or such.

    It is for people who GIVE money to be able to claim it on THEIR tax return.

    If a church is NOT 501c3 and someone gives to it and then is audited on their tax return, that gift will be rejected.

    Watched it happen.

    I wouldn't consider NOT being 501c3 (the list in the posts above is a farce)
     
  8. JeffM

    JeffM New Member

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    Without tax exempt status, the church itself would have to pay taxes on the income it received from it's members.
     
  9. Psalm145 3

    Psalm145 3 New Member

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    Peter Kershaw, the author of the hushmoney.org website, was on The Heart of the Matter radio program a couple weeks ago talking about 501 c3. Click here for recent archived programs&gt;&gt; The Heart of the Matter
     
  10. Pastor Larry

    Pastor Larry <b>Moderator</b>
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    A church does not "receive" non-profit status. They are non-profit by definition. And they waive no rights. I don't understand why people keep repeating this? Nothing that a church should be talking about it limited by their status as non-profit.

    I don't see anywhere that the IRS has claimed authority over God and his children. We suffer from none of that here. I just don't understand the rhetoric.

    Bob is partially right I think. 501c3 is not the same as tax-exempt although all 501c3's are tax-exempt. It does bring the organization under a set of laws that govern certain things. I am not familiar with any governance that is oppressive for a church in the 501c3 status.

    As for giving, not being an official 501c3 does not mean that the gift is not tax deductible. In an audit, certain steps will be taken to verify that the giving was to a legitimate. I have never heard of anyone losing a tax deduction for that reason, although I am not disputing Bob's account of watching it happen.

    There are likely very few churches that are actually 501c3. There is a huge amount of paperwork to fill out for that. Most just take the recognition I think.
     
  11. Jeffrey H

    Jeffrey H New Member

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    It's a good decision to apply for 501c3 status. Church members will appreciate it when their tax returns are audited.

    501c3 status is a privalege given to non-profit charities and religious organizations to encourage charitable giving. It can be taken away at any time when the political climate changes.

    Would we still give the same amount to our church if it loses it's tax-exempt status?
     
  12. Jeffrey H

    Jeffrey H New Member

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    My church officially has 501c3 tax-exempt status. We have not encountered any of the situations noted above.
     
  13. Salty

    Salty 20,000 Posts Club
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    I have been thinking about this subject for a while now. There are several thoughts to consider.
    Basically, being 501c allows three things:
    1. Offerings are tax deductable
    2. Exemption from property tax
    3. Exemption from sales tax
    4. Exemption form income tax

    An action that could cancel your tax free status would be for the pastor to announce from the pulpit that he or she (oopps only he!) highly recommends you vote for Bush over Kerry because the Senator is Pro-abortion. So what happens?

    1. Offerings are not tax deductable
    a. if that is the reason for giving, the motive is wrong.
    b. Unless you file long form ( which means you make lots of $$$) the tax deduction is moot.

    2. Property tax must be paid
    a. if you rent, whick many churches do, this is also moot
    b. if you own, than a portion used only for non-profit could be written off

    3. Sales tax must be paid.
    So? Would it hurt us to help out our localties?

    4. Income tax - is based on profit! How much "profit' does a church make? Remember, expenses such as mortage, missions, wage, utilites, ect would all be tax-deductable.

    Are we so worried about a few dollars that we are afraid to say what we really want to say? Seems like last time I checked my Father owns the Cattle on a thousand hills!

    Sounds like a good carreer for Christian lawyers and Christian tax preparers?


    Salty

    ps didnt President (I use the term loosely) Clinton "speak" at churches during his election campaign. I assume they lost there tax deduction, didnt they?

    maybe, I will consider this in my campaign, Oh did I mention I am running for office. Need info, pm me.
     
  14. kirkguardian

    kirkguardian New Member

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    :eek: All I can say sir is that you are either very confused or very misinformed.
    </font>
    • Sec. 501. Exemptions from tax on corporations, certain trusts, etc.
      (c)List of exempt organizations.</font>


    Wrong again. The correct answer is IRC 170.

    Wrong again. Like most pastors, you are misinformed about the law. Have you read IRS Publication 526? Have you read IRC 508c1A? You are making uninformed assumptions based upon just one third-party experience that you incorrectly interpreted.

    How sad that you would reject the truth before you even investigate it. Do yourself and your church a favor and take a few minutes to actually investigate the facts at http://501c3.hushmoney.org

    [ June 26, 2004, 04:04 PM: Message edited by: kirkguardian ]
     
  15. kirkguardian

    kirkguardian New Member

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    False. Churches seldom have income, and the IRS itself knows this. Contributions from members isn't "income" and it's a huge mistake to claim that it is "income." The tax code calls gifts and tithes to churches "charitable contributions" per IRC 170. Let's get our terms straight. The income tax applies to "income," not charitable contributions. Speak of tithes and gifts to your church as "income" at your own peril.

    Furthermore, the IRS states in Publication 557 that churches are "automatically tax exempt" without ever having to apply for 501c3 status. This is nothing more than a restatement of IRC 508c1A. The IRS' own statements in Publication 557 is really just a half-truth, but it's a huge admission, nonetheless.

    The truth is that churches are nontaxable. The IRS has no jurisdiction to tax a church, per the First Amendment. "No law" means just what it says, "no law."

    Furthermore, churches are "automatically qualified" for tax deductions without ever having to apply for 501c3 status, per IRS Publication 526.

    This can all be confirmed at http://501c3.hushmoney.org
     
  16. Dr. Bob

    Dr. Bob Administrator
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    Interesting website. Thanks for the link.
     
  17. Pastor J

    Pastor J New Member

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    In 1995, our church dis-incorporated and is now at 508c1a church instead of at 501c3 non-profit organization.

    One of the major differences between these two is about taxes. The 501c3 is a tax-exempt organization. However, a 508c1a is a church that is excepted from taxation. A church cannot lose it's tax exception status, but a non-profit can.

    We notified our town, state, and IRS. We still have a Tax exempt # for buying things. We still do not pay property tax and we enjoy all the privileges that the IRS gives to a church, some of which are not available to non-profits.

    The one area that was a cause for concern was that being unincorporated, we opened ourselves up to the possibility of a lawsuit against all the members. CLA (I am not a supporter, but they helped), helped us put our church into a trust that gave us similar protection to incorporation. They do not recommend being a 508c1a because it is easier for them to defend a church that is not really a church, but a non-profit. However, we decided that we wanted the freedoms that churches have that the state has taken away with incorporation.
     
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