A Church With Tax Exemption is not a Tax-Exempt Church!

by Art Fisher

During the recent Senate hearings on Senate Bill 557 (the so-called "Civil

Rights Restoration Act"), it was noted that Sen. Kennedy and other

supporters consistently referred to "religious or church organizations",

whereas opponents spoke of defending "religious freedom" and "rights" of the

church. The term "organizations" may be the the key to understanding

governmental meddling in the affairs of the church.

A "religious or church organization" is a CORPORATION that functions in a

legal capacity, doing business as a church. The IRS is fully aware of this

distinction, and their publications reinforce that status. Nowhere do they

define "tax exempt churches" -- they always refer to religious or church

"organizations". Surely Congress, in writing the tax law, understands this

distinction as well!

A church that voluntarily initiates an application to the state for

corporate status expects "limited liability" and "tax exemption". It in

turn owes to the state its right to exist and prosper. It is obvious that

its legal status and that of its of its "flock" has been drastically

altered.

Churches do NOT have rights granted by the Constitution. They enjoy

INALIENABLE rights granted by God, which are secured by the Constitution.

Incorporated churches, in contrast, are artificial entities which may have

such "privileges and immunities" as are granted by the state.

The U.S. Supreme Court well understands the artificial status of

corporations:

A corporation is a creature of the state. It is presumed to be

incorporated for the benefit of the public. It receives certain

special privileges and franchises ... Its powers are limited by law ...

It's rights to act as a corporation are only preserved to it so long as

it obeys the laws of its creation. Wilson v. U.S., 221 US 382.

Corporations are not citizens ... The term citizen ... applies only to

natural persons ... not to artificial persons created by the

legislature ... Paul v. Virginia, 8 Wall 168, 177. (See also, Opinion

Field, 16 Wall 36, 99).

Whenever a corporation makes a contract it is the contract of the legal

entity ... The only rights it can claim are the rights which are given

to it in that character, and not the rights which belong to its members

as citizens of a state. Bank of Agusta v. Earle, 13 Pet 586.

According to IRS Publication 557, the instruction manual for organizations

seeking recognition of tax exemption under Section 501(c)(3); in order to beŠan "organization" in the legal sense, it is necessary to incorporate.

Black's Law Dictionary, 5th Ed. defines "organization" as:

... a corporation or governmental subdivision or agency, business

trust, partnership or association, two or more persons having a joint

or common interest, or any other legal or commercial entity. UCC 1-

201(2B).

Notice that ALL of the entities in this definition are government

franchised, and therefore under the jurisdiction of the Uniform Commercial

Code. The definition shows that a corporation (even if it functions as a

church) is recognized by law as commercial and public; an incorporated

church is legally interpreted as a commercial, public entity. Didn't Christ

say that His Father's house was NOT to be a house of merchandise? John 2:16.

Most states will not "permit" exempt status until a church applies for and

obtains an IRS 501(c)(3) status ruling. This means, of course, that the

church must willingly incorporate and submit itself to state jurisdiction.

IRS Publication 557 Sec. 508(c) 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. The IRS

fundamentally has no authority!

This would raise many ethical questions: Why are the churches of today

almost always found to be incorporated? Why would the churches

elect to place themselves under such jurisdiction to find regulation

under governmental franchise preferable to their own Divine Laws

Are theyù not in fact serving two masters?


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