Churches Should Consider Unincorporation

Most churches, including my own, are incorporated by the government under section 501(c)(3) of the Internal Revenue Code. This allows our church to free from having to pay property taxes, sales tax, and allows donations to be tax deductible. There is a price to pay, however, for this incorporation. My church has a proposed amended constitution which would continue this status. It states:

“No substantial part of the activities of the Church shall be in the attempting to influence legislation, and the Church shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office.”

It’s wrong to make a deal with the government that you will keep quiet about politics in exchange for tax breaks. The Church should not be run like a business. The IRS is right in saying that churches who have 501(c)(3) status do not have the right to speak to political issues. It’s the law. When a church that supports a particular political point of view is given tax breaks, this effectively forces taxpayers to support a point of view that they don’t necessarily agree with because they have to pay a greater share of the tax burden.

In an ideal world, no one would have to pay any income tax or property tax. These are tyrannical government intrusions. (In the case of property tax, police and fire department levies are reasonable exceptions.) Sales taxes, head taxes, and tariffs on imports are fairer. But it’s not right to make the system fairer for a church at the expense of the general taxpayer.

It is fair, however, for members of an unincorporated congregation to give money to the ministers, pastors, and other workers in the church without them (the ministers, etc.) having to pay income taxes on it. This is a step of faith, however, because the ministers, etc. are then not guaranteed a salary. They simply get whatever is put into the offering plate. Anyone can legally give up to $10,000 per year per individual without the recipient having to pay any income taxes. Beyond that, the giver would have to pay additional taxes. This giving is NOT tax deductible, but at least the recipient does not have to pay income taxes on it as they would if the church were incorporated.

Any properties controlled by the church are, believe it or not, owned by Jesus Christ under the law. Trustees of the church are responsible for overseeing such property, but no one but Jesus Christ owns it.

Incorporation causes all kinds of other legal entanglements. The 501(c)(3) status allows the government to interfere with the inner workings of the church which should be under Christ alone. You can read about one such case on the website of the Ecclesiastical Law Center. The process of disincorporation is a very difficult legal process. I would encourage all churches to consider this and to contact Dr. Ben Townsend at the ELC for help in doing this. See also this article.

The use of 501(c)(3) status by the government is an attempt by them to silence the Christian Church. It is just another example of a law that can be bent or broken by the powerful at the expense of weak, making this nation more of a lawless nation.