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From time to time, we have been asked:

Why do nearly all churches in the United States register as 501(c)(3) non-profit organizations?

Doesn’t that provide limitations that they do not have to have?

Well, the answer to the second question is yes as no church is required to register to be a real charity under 501(c)(3).

As far as to why most register as a 501(c)(3) organization, that is a bit tricky.

The main reasons seem to be because:

1. Some advisor told them to.
2. The leadership believed it was safer for them personally.

Essentially, many church leaders are afraid that if the Internal Revenue Service (IRS) should declare that their group is not an actual church, and then make contributions non-tax deductible, then the leadership worries that they may have liability. Prior to 1954, there were no 501(c)(3) churches.

While non-profit organizations must register for 501(c)(3) status if they want the tax deductibility for their donors, according to statute 501(c)(3) (and other statues), churches are automatically exempted from having to do this as they are automatically considered to be public charities.  Thus, an actual church is a non-profit organization per statute 501(c)(3), without ever having to file for registration.

Here is something that the IRS has written about 501(c)(3) organizations:

While conferring benefits on 501(c)(3) organizations, federal tax law also imposes responsibilities on organizations receiving that status.

Record Keeping

Section 501(c)(3) organizations are required to keep books and records detailing all activities, both financial and nonfinancial. https://www.irs.gov/pub/irs-pdf/p4220.pdf

While churches are exempted from some requirements, there are financial costs associated with filing for 501(c)(3) registration as well as ongoing documentation requirements for those to do so.

Churches that do not register as a 501(c)(3) organization do not have the additional 501(c)(3) requirements.

That being said, it is sometimes easier to deal with certain organizations in the world if one is a 501(c)(3) organization. It was a slight complication for us when we switched banks, but once we were able provide a State of California tax-exemption letter, there were not problems.

Squelching of Speech?

Some have claimed that registering as a 501(c)(3) church means that the federal government, and/or local governments, have control of what can be preached and taught. Thus far, while there is limited truth in that, it often has been an overstatement by opponents of a 501(c)(3) status for churches.

Generally speaking, the IRS does not get involved in what churches teach unless it is considered to be ‘political speech’  (but, as we see more and secularization in the USA this could become very serious one day). Here is some of what the IRS has put out about that in its publication 1828:

Political Campaign Activity

Under the Internal Revenue Code, all IRC Section 501(c)(3) organizations, including churches and religious organizations, are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made by or on behalf of the organization in favor of (or in opposition to) any candidate for public office clearly violate the prohibition against political campaign activity. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of excise tax…. ; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention. …

Issue Advocacy vs. Political Campaign Intervention

Like other Section 501(c)(3) organizations, some churches and religious organizations take positions on public policy issues, including issues that divide candidates in an election for public office. However, 501(c)(3) organizations must avoid any issue advocacy that functions as political campaign intervention.

Since we in the Continuing Church of God do not vote in USA elections nor endorse candidates, why could this be a concern?

Well, one problem is that speech about religious moral issues, such as abortion and homosexuality are now considered to be political. And may be considered ‘political advocacy’ by some officials.

Furthermore, there are groups (including the last Church of God this writer was associated with) that worry that taking biblical stands on anything that could be considered ‘political speech,’ even by their members, puts them at risk of losing their tax exempt status. This causes them to not speak out as they should. Thus, in this writer’s view, there are areas that many 501(c)(3) churches are too unwilling to deal with issues as the remnant of the Philadelphia portion of the Church of God should.

The Bible says:

1 Cry aloud, spare not;
Lift up your voice like a trumpet;
Tell My people their transgression,
And the house of Jacob their sins. (Isaiah 58:1)

19 Go therefore and make disciples of all the nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit,  20 teaching them to observe all things that I have commanded you; and lo, I am with you always, even to the end of the age. (Matthew 28:19-20)

While being a 501(c)(3) church should not prevent groups from following the instructions in Isaiah 58:1, that registration status has affected many (including Church of God groups). We, in the Continuing Church of God, believe that must teach ALL THINGS that Jesus commanded–and this would include statements in the Word of God (cf. John 1:14) that are not directly attributed to Jesus.

Consider also the following:

37 “For yet a little while,
And He who is coming will come and will not tarry.
38 Now the just shall live by faith;
But if anyone draws back,
My soul has no pleasure in him.”

39 But we are not of those who draw back to perdition, but of those who believe to the saving of the soul. (Hebrews 10:37-39)

The Bible also says:

14 And this gospel of the kingdom will be preached in all the world as a witness to all the nations, and then the end will come. (Matthew 24:14)

28 For He will finish the work and cut it short in righteousness, Because the Lord will make a short work upon the earth. (Romans 9:28)

Although there is a time for the prudent to be silent (Amos 5:13), many, when they should boldly cry out, seem to prefer a ‘lukewarm,’ Laodicean‘ (Revelation 3:14-20), approach for fear of men (cf. Acts 5:29).

Does this mean that if a church never has registered as a 501(c)(3) non-profit that there is nothing any government entity can ever do about what is taught?

No.

But on practical terms, it means that if the federal government is going to attempt to squelch any type of so-called ‘political’ or ‘hate speech’ by churches, they are (at this instant) more likely to chose a 501(c)(3) registered church. The government would likely plead that it has a true public interest in a 501(c)(3) church, which would be theoretically harder to prove in court for a church not registered as 501(c)(3).

So, while the Continuing Church of God is tax-exempt, etc. under 501(c)(3), we have not registered to be under additional 501(c)(3) regulations and possibly future burdens.

The Continuing Church of God  chose a better option, as we believe that is best for us to fulfill Matthew 24:14, Matthew 28:19-20, etc.

The Continuing Church of God Chose Another Way

In addition to being exempt under 501(c)(3), as well as the protections under the first amendment to the Constitution of the United States, the Continuing Church of God is basically considered, legally, to function under 508(a)(c)(1)(A):

Sec. 508. — Special rules with respect to section 501c3 organizations

(a) New organizations must notify Secretary that they are applying for recognition of section 501(c)(3) status

Except as provided in subsection (c), an organization organized after October 9, 1969, shall not be treated as an organization described in section 501(c)(3)

(c) Exceptions

(1) Mandatory exceptions

(A) churches, their integrated auxiliaries, and conventions or associations of churches,

As far as tax-deductibility of donations, that is covered under IRS publication 526 that states:

Deductible As Charitable Contributions

Money or property you give to: Churches, synagogues, temples, mosques, and other religious organizations.

But, because the home office of the Continuing Church of God is in the State of California, we were required by State statute to have our tax exempt status reviewed by the State of California. And that tax exempt status was approved when we submitted the mandated documentation in 2013 and remains in effect.

Unlike 501(c)(3), there was no filing fee and the State of California imposes no additional requirements for record-keeping. Nor does it have regulatory speech restrictions that are in any legal way connected to attaining of the tax-exemption letter from the Franchise Tax Board of the State of California.

Here is some of what the State of California’s Franchise Tax Board’s Exempt Determination Letter to the Continuing Church of God Overseer and Successors, a Corporation Sole states:

To retain tax-exempt status, the organization must be organized and operating for nonprofit purposes within the provisions of the above R&TC section. An inactive organization is not entitled to tax-exempt status

So, basically to remain a tax-exempt organization, we must continue to operate. And the plan is for the Continuing Church of God to operate until we flee to the wilderness (Revelation 12:14-16) just prior to the start of the Great Tribulation.

In a sense, being based in the State of California is the best of both worlds as far as the USA is concerned: we do not need to register as a 501(c)(3) nor be under its requirements and restrictions and we have governmental certification that the Continuing Church of God is specifically approved as a tax-exempt organization.

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