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IBT Archive Reprint

State Churches Through Incorporation and Taxation
From whence deriveth the church her authority?

IRS
501(c)(3)
or  Matthew
28:18

by Dr. Greg Dixon, Pastor
Indianapolis Baptist Temple
Indianapolis, Indiana

A part of the following was given by Dr. Dixon as testimony before the Senate Finance Committee in 1983. The chairman was Senator Robert Dole (R), of Kansas.

Make no mistake about it: "D" day for the churches of America is January 1, 1984. Maybe Orwell had the right date after all. On this date every church in America must register and pay taxes to the Federal Government. Please remember that this has never happened since the founding of our nation more than two hundred years ago.

Starting January 1, 1984, all churches and schools, which are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, will be required to pay FICA (Federal Insurance Contributions Act) taxes for each employee who is paid $100.00 or more in a calendar year.

Be assured, regardless of what it is called, this is a tax. President Franklin D. Roosevelt said that it was a tax when it was presented to congress originally in 1934. Congress admitted that it was a tax when it was passed. The Supreme Court since has declared it to be a tax, and two of the most well known constitutional attorneys of our time in the area of religious liberty have said that this is a tax. David Gibbs has said it over and over again on the Accelerated Christian Education fall tour. Mr. William Ball has said essentially the same thing in a memorandum from his office.

Mr. Ball says:

"The principle involved is plainly a tax on religion. Churches and religious schools are not afforded an option to pay, or not to pay, for an insurance program for their employees. The relatively small size of the tax is irrelevant (though to some the burden may be substantial). If religion may be taxed a little, why not greatly? The tax imposes obligations upon religious bodies in respect to the use and management of their own resources and with respect to the personnel of their ministries."

This position paper should not be interpreted as advising anyone as to what he should do in regard to this tax. This paper is for the purpose of clarifying the issues and suggesting some alternatives. It also explains what some churches are doing in regard to this problem.

To get a proper perspective, let us review the social security issue. Mr. Ball writes:

"In January, 1984, non-profit organizations, including churches and Christian schools, will be swept into social security. Earlier this year (1983) Congress passed HR 1900 which was heralded as the 75-year cure of the nation's sagging social security program. President Reagan has signed the bill into law. Beginning January 1, Christian schools will be required to withhold 6.7% from each employee's salary for social security payments. The Christian school (and/or church) will, in addition, pay 7% of each employee's salary to social security as well. Understandably, this will have a significant financial impact on many Christian schools that have not participated in the government's social security program."

Of course, many churches would have to borrow money to pay these taxes since most of them do not have it in their budget.

Originally when this issue arose in congress in 1934, the legislators suggested that it be voluntary for everyone. President Roosevelt said, "No!" In fact, he said that it would be an involuntary coercive tax. many of the old line churches asked to be included. Congress was very emphatic. They said, "No, we can't tax God." So they didn't.

In 1951, however, Congress decided that God could be taxed voluntarily. Many churches since then have "opted in" and some who did participate have opted out and many never were included. Now in 1984, fifty years later, Congress had decided that God can be taxed involuntarily.

Make no mistake about it, the penalties are unbelievably stiff. The pastor or responsible officer could receive a five year prison term or a $10,000 fine or both and this is just on one count.

According to Dr. David Gibbs, esq., there are three principles involved in this matter of taxation. First, the power to tax is the power to control. Secondly, this tax (FICA) is the means to which government provides benefits (subsidy or welfare) and thirdly, a tax is a test of sovereignty.

One state cannot tax another because each is sovereign, God is sovereign; He cannot be taxed.

Many pastors are asking if a church has the scriptural right to refuse to pay taxes. This issue strikes at the very core of the separation of church and State. What can join the church and State more than coercive taxes?

The principal of this division is found in the dawn of history as it is recorded in Genesis chapter 14. Abram paid tithes of all to Melchizdek, King of Salem, and refused the spoils he was offered (though legally) from the King of Sodom.

It is clear that it was the result of a solemn oath that Abram had made to God.

"Abram said to the King of Sodom, I have lift up mine hand unto the Lord, the most high God, the possessor of heaven and earth, that I will not take anything that is thine, lest thou shouldst say, I have made Abram rich." Genesis 14:22,23

Maybe the church of the Lord Jesus Christ should restate this vow again.

The church is not to finance the government neither is the government to finance the church. A State-financed church is a State controlled church. The pulpit must ever be free to cry out against the king. Nathan said to King David, "Thou art the man" (2 Samuel 12:7). Later, as religious freedom began to die in Israel, prophets were imprisoned or killed for such boldness.

We also see that the Levites were not taxed or conscripted for military purpose (Numbers 1:45-54; Numbers 18. Note especially verse 24). The tithe was to go to the Levites (Deuteronomy 14:27-29; Joshua 21).

However, I think Ezra 7:24 is as clear as crystal.

"Also we certify you, that touching any of the priests and Levites, singers, porters, Nethinims, or ministers of this house of God, it shall not be lawful to impose toll, tribute, or custom, upon them."

The New Testament is equally clear in Matthew 28:18-20 and Ephesians 5:21-33. Let's look at some principles in these verses.

1. The Lord Jesus Christ is the sole authority over the church (Matthew 26:18).

2. The church is under orders from Him alone to disciple, baptize, and teach all things that He has commanded them (vs. 19, 20).

3. If the church will do this then He promises to be with her to the end. (vs. 20).

4. Paul compares the special relationship of Christ and His church to a man and his wife. What can be closer (Ephesians 5:21-33)?

5. Christ is the Savior of our body (the church), not the State (vs. 23).

6. The church is subject unto Christ, not the State (vs. 24).

7. Christ purchases the church with His own blood (vs. 25). The State can give nothing for the church and should give nothing to the church.

8. The lord nourishes and cherishes the church. Through the centuries the State has tried to destroy the church.

9. The church is a living organism with a living head and body. Therefore the church is not a religious organization. It is possible to be a religious or charitable organization without being a church.

10. The church is to be joined unto Christ (vs. 31). The Lord Jesus uses the word cleave in Matthew 19:5.

11. Admittedly this is a great mystery (vs. 32), and in this post-Christian era it should not surprise us if a world who hated our Lord Jesus Christ should also hate His church (John 16:18-21).

The following is taken from Baptists and the American Tradition! by Robert C. Newman, Regular Baptist Press, Des Plaines, Illinois.

"Pressures upon the New England Bible commonwealth forced gradual changes in their peculiar form of church-State union. Civil magistrates continued to enforce both tables of the law, which meant the regulations of the religious as well as the civil life of the populace. The magistrates were considered the 'nursing fathers to the church,' and as such, they could pass and enforce legislation for tax support of Congregationalism. They could not alter the church's beliefs and worship, a hated memory of the old days in England. But taxation for church support and the trial of heretics were within their domain. Not until 1728 did Puritan New England exempt Baptists, Anglicans and Quakers from taxation for support of the Standing Order." Page 24, paragraph 1.

"Being a strong Baptist and an independent, he (Backus) took care to ascertain beforehand whether or not the Association would wield any control over his local congregation." Page 33, paragraph 3.

"Religious taxation was the main issue. Backus was the alert leader in this long controversy. He resorted to newspaper attacks against the proposed Constitution for its failure to eliminate taxation to support congregationalism.

"Backus was a man of principle. He did not simply contest tax support for the established church, but tax support of any religious body." Page 35, paragraph 1 and 2.

"In the pamphlet he (Backus) describes punishments, imprisonment's and other assorted persecutions directed at various Separates and Separate-Baptists on the part of the New England oligarchy." Page 36, paragraph 2.

"In 1783 he (Backus) wrote A Door Opened for Christian Liberty. In it he related the persecution of Richard Lee." Page 36, paragraph 3.

". . . he (Backus) argued that the Head of the Church is Christ and, since there is no earthly head, then to impose one is unbiblical. . . . since he the above is true, then a government should not govern in religious affairs. . . . he (Backus) maintained that the 'end of civil governments is the good of the governed.' Page 37, paragraph 1.

"The-established clergy held sole right to perform marriages and bury the dead . . . Thus, while Anglican ministers were State supported, they were also State regulated. Beginning in 1662 and continuing for nearly a century afterward, Virginia's General Assembly required ministers to present evidence of ordination by an English bishop." Page 42, last paragraph 2.

"The Baptists were the first to enter the war for religious liberty in Virginia." Page 42, last paragraph.

"They (the New Light Baptists) were often without formal training and always without government sanction. . . . Between 1768 and 1776 the colony imprisoned more than forty Baptist preachers. This was relatively easy since they had no State certification." Page 42, paragraph 3.

In the Fundamentalist vs. Modernist controversy in the 20's the issue was, "Who is Jesus?" The controversy today is "What is the Church?"

The true church of the Lord Jesus Christ should not be surprised if one of its greatest antagonists in this struggle are the interdenominationalists and para-church organizations. They believe in a universal, invisible church while the Bible teaches that His assembly is local and visible.

Who can deny that after January 1, 1984, ever church in America will be required to become a State church. According to Dr. Robert McCurry in the August 14, 1983, issue of The Temple Times.

"A State church is a church that is recognized by the State, serves the State, provides revenue for the State, and serves a public purpose that is not contrary to established public policy. This is exactly what was decreed for churches of America.

"Churches will be registered with the State by tax-identification numbers. 

"Churches will be producers of revenue for the State by paying taxes 'to assure the solvency of the Social Security Trust Funds.' Taxable organizations are answerable to the government-open to the inspection and dictates of the government.

"Churches will be agents of the State by confiscating and remitting to the State taxes that the State has ordered the church to confiscate from the remuneration of church employees.

"Churches will be servants of the State by keeping records for the remitting records to the State.

"Of course, this is just the beginning. The full impact of what will be imposed on the churches is yet to be seen. Once a State church has been decreed, the door is open to an endless number of impositions."

A Christian attorney in Indianapolis, has compiled a list of forth-one different areas of conflict between the church and State today. No wonder over 8,000 Christians and churches are currently on trial in America.

In a recent court trial a pastor was asked by a prosecutor if his church used toilet paper. When the obvious had been established the State tried to enforce interstate commerce laws against the church when it was showed that they had brought the paper over State lines.

Dr. McCurry also relates the following in the December 12, 1982, issue of The Temple Time:

"Several years before his death in 1976, which would be the early 70s, and long before there emerged the type of persecution of the church and its ministries in America by the government as is now so visible, Baptist evangelist B.B. Caldwell made the following prediction in a sermon entitled, 'Seven World-Shaking Events Soon to Come to Pass.'

"I predict that the final oppression of Christianity will start with taxation. . . there will be universal taxation. This will start with a series of independent churches and missionary associations, thereby casting a shadow upon their integrity and raising doubts in the minds of their contributors as to the validity of their ministry.

"The government will haul ministers of the Gospel into court on alleged tax irregularities and challenge ministerial authority of independent ministers of the Gospel. The government will get rid of independent ministers, churches, and associations and a State church will be set up."

Notice in this amazing prediction the connection between taxation and a State church. The danger of such a State church may be more real because many preachers and Laymen in the United States either do not know what a State church is, or do not care. CLA Attorney David Gibbs stated that there is probably a widespread feeling that State church implies uniformed guards conducting the church services. And because that seems so unlikely, the fear of a State church is often minimized.

What Can Be Done?

I am suggesting that churches become unincorporated, both State and Federal; and that new churches not apply at all. In my opinion after studying this subject for many months, incorporation is possible the innocent trap that Satan has lured us into.

Make no mistake about it. A corporation is no fictitious entity. it is a creature of the State. It has no constitutional rights as the individual, and it must make incredible concessions today which are clearly unscriptural.

Consider what the Supreme Court of 1905 had to say in regards to incorporation in the Hale vs. Hink case.

Quote: "The benefits of the Fifth Amendment are exclusively for a witness compelled to testify against himself in a criminal case and he cannot set them up on behalf of a corporation."

Quote: "A corporation is a creature of the State and there is a reserved right in the legislature to investigate its contracts and to find out whether it has exceeded its power."

Quote: "There is a clear distinction between an individual and a corporation and the later being a creature of the State has no constitutional right to refuse to submit its books and papers for an examination at the Suit of the State."

Quote: "Franchises of the corporation chartered by the State are, so far as they involve questions of interstate commerce, ('denominations') exercise in subordination of the power of congress may not have general visitorial power over state corporations, its powers in indication of its own law are the same as if the corporation had been created by an act of congress."

In reality there are only three purposes for incorporation: Liability (limited), respectability, and perpetuity (if the owner dies the corporation lives on.) Why should the Blood-bought Church of Jesus Christ have to have any of the three? First of all, the Church has the promise that the gates of Hell shall not prevail against it (Matthew 16:18). And then, why should we have the approval of man if we are approved in Heaven by God Himself? And then, we certainly do not need to worry about the owner of the church dying for He is alive forevermore and has promised us in Matthew 28:20, "and, lo, I am with you alway, even unto the end of the world."

The Congress amended HR 1900 to exempt churches who were not paying FICA taxes at the time. However, they would have to file Form 8274 with the Federal Government. Thousands of churches did so. However, because to sign file Form 8274 would be an admission of jurisdiction (Lordship) of the State over the church, the unregistered churches refused to file the form.

Following are eleven reasons why the Indianapolis Baptist Temple refused to sign form 8274:

1. It would deny the Lordship of Christ over His church (Ephesians 5:23-24).

2. The IRS has no right to tell a Baptist church its definition of a minister.

3. The IRS definition of a minister is a Roman Catholic definition.

4. We would have to admit that a religious organization and a church are the same thing.

5. Must admit that we are a not-for-profit business organization.

6. We must say that we have employees, not ministers.

7. We must admit that we are not opposed to taxing the church.

8. It automatically makes the church an agent of the State.

9. It opens the church records automatically to the State.

10. There are no regulations written, which means that we would be signing a blank check.

11. The Blood-bought Church of the Lord Jesus Christ cannot participate in a tax scheme that is a hoax and a fraud.

The Indianapolis Baptist Temple unincorporated June 23, 1983. At that time we severed all relations with the State and Federal Government that would entangle us and hinder the church from operating strictly under the Headship of the Lord Jesus Christ.

We stopped collecting and remitting taxes to the State, as an example. Can you imagine the Book-bought Church of Jesus Christ being a publican (tax collector) for a wicked State that murders a million and a half unborn infants per year, finances sodomy, and supports communism around the world?

The Baptist Temple stopped withholding taxes and twenty-five to thirty other things to get disconnected from the State, local and federal governments. A complete list is available on request by writing:

Indianapolis Baptist Temple
19th Judicial District
2711 South East Street
Indianapolis, Indiana
(317) 783-6753 (phone)
(317) 781-2775 (fax)

(Webmaster's note: see the end of the article for current contact information)

Churches that are interested in unincorporating should contact Mr. Al Cunningham of the Biblical Law Center, at P.O. Box 415, Montgomery Creek, California 96065, Phone 916-337-6492

Mr. Cunningham is the only attorney in the United States that understands the jurisdictional, or Lordship position.

When our forefathers signed the Declaration of Independence they also declared themselves to be dependent on Divine Providence. Those men knew that if God did not help them that they would be destroyed.

Is it not time for the Blood-bought church of Jesus Christ to cast herself on her Heavenly Bridegroom who is the Provider and Protector of the church, "The Savior of the Body?"

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Biblical Law Center

Biblical Law Center - Helping Churches Since 1984 to organize or reorganize churches to leave the IRS 501 (c ) (3) tax exempt Scheme and become non-taxable New Testament Churches In the area of church polity.  For information go to http://biblicallawcenter.com/what-to-do