How The Federal Courts Pitched The New Testament Churches A Curve
by Dr. Greg Dixon
Of those of us that were there, who will ever forget those halcyon days in Nebraska in the early eighties when the "Battle of Louisville" took place. Altogether Pastor Everette Sileven spent 297 days in the Plattsmouth jail, and then the next winter seven fathers, all members of Faith Baptist Church in Louisville, spent 97 days in the same jail. The terrible crime that these horrible criminals had committed was to dare to operate a church school without state certified teachers and the fathers had courageously placed their children in that same school. Never mind that the children tested out two and a half years ahead of their counter parts in public schools, the issue was control. The Nebraska Education Association under orders from the National NEA and UNESCO of the United Nations had determined to crush the little school of less than twenty students who met in the basement of the church. In the words of state Senator Hoagland, they needed to make sure that the children of these Christians would be ready for the New World Order that he said was coming in the year 2000.
This historic case and others will show that what the Indianapolis Baptist Temple did from 1983-'86 to get unentangled from government at all levels was based not only on a solid scriptural foundation as to the Lordship of Jesus Christ over His church, but good legal precedent as well. In fact no less than three law firms advised us at that time that what we were doing in stopping the collection of 941 "employee" taxes was correct. The Social Security/Medicare law for churches that are organized as 501(c)(3) Public Charities did not come into effect until 1984. Following are four cases that will show that the leadership of the Baptist Temple was correct in their assessment of how to begin operating under the scriptures as a New Testament Church rather than a State controlled agency to be dictated to in every aspect including the sermons preached.
Case No. 1-Faith Baptist Church-Louisville, Nebraska
In his book Lessons of Louisville Bro. Sileven gives the following account in his own words. "It was well into this case in the year 1983, after I had already been to jail a couple of times and I was serving my third round of contempt of court, when the honorable Judge Raymond Case asked the Sheriff to bring me one night from the jail cell, about 10 PM, to his office on the second floor of the Cass County Court House. The judge invited me in, spoke to me in very humble terms and said he wanted to visit with me for a few minutes...
He first began by asking me to close the school. When I refused, he asked if I would move it outside his jurisdiction. Again I refused.
He then made a statement that got my attention. He said, "Pastor you're 95% right in your arguments, but you are 5% wrong."
I responded, "if you can point out where I am wrong, I will repent and make changes."
He then pulled from the file the pleadings that had been filed and asked me to read the heading. I read, "The State of Nebraska et, al;, Attorney General Paul Douglas v. The Faith Baptist Church, a Nebraska Corporation."...He then asked me, "Is that a heavenly corporation?" I replied, No!" He asked me...,"Well, what kind of corporation is that?"
I responded, "According to the heading, it is a Nebraska corporation." He then asked me...,"Who owns your buildings?" I answered, "The Faith Baptist...Ah, I'm beginning to see the light. The corporation owns the property." I said, "Ah, Nebraska." He said, "That's right."
He told me that he was going to padlock my church again and he wanted to explain to me that that was the most charitable thing he could do since the leaders in Lincoln, Nebraska have requested that he bulldoze it down and burn it, and the State had the jurisdiction...to do so because those properties belong to a corporation owned by the State of Nebraska and it is breaking the laws of the State...which the (corporate) charter forbids.
Well, I didn't have to call my religious guru to find out if I should unincorporate. I unincorporated the church and it began to turn the case around from that point; not in the courts, but God stepped in and ended the matter very quickly after that.
Case No. 2-State St. Baptist Church-Bowling Green, Kentucky
This case involved the discipline of some members of the church. The members sued the church on the basis that they did not follow the requirements of the law when the meeting was held in which the vote was taken. Eventually the case was appealed to the Court of Appeals of Kentucky. The Court ruled against the church for the following reasons:
"The State Street Baptist Church has been in existence for over 140 years. In 1973, the membership organized a nonprofit corporation. Although the Articles of Incorporation recite that the church was incorporated pursuant to Section 271, subsequent provisions state that it would be governed by K.R.S 273 (Kentucky Rules and Statutes). In September, 1980, certain church members sought an order that the church have a business meeting and that business be transacted as permitted by K.R.S. Chapter 273...K.R.S. 273.197 requires written notice of a members' meeting within ten to thirty-five days prior to the meeting. K.R.S. 273.263 requires that written notice of proposed amendments be given to each member ten to thirty-five days prior to the meeting...
The business of the church was conducted in a rather informal manner in accordance with its customs. Although this kind of conduct might be suited to church tradition, it does not comply with the requirements of the statutes regarding nonprofit corporations. As the trial judge phrased it--once the church determined to enter the realm of Caesar by forming a corporation it was required to abide by the rules of Caesar, or in this case, the statutes of the Commonwealth of Kentucky.
The members who instituted this action had the capacity to do so. Willis, Supra, contemplates that any active member of the corporation can seek relief in the courts from directors' refusal to hold a meeting... It is the general holding of this Court that those organizations choosing to incorporate under the provisions of Chapter 273 must comply with the requirements of that law..."
Case No. 3-Corpus Christi People's Baptist Church, Inc.
This is the celebrated case where Bro. Lester Roloff, pastor of People's Baptist Church in Corpus Christi, Texas had refused to take a license for the 35 year old Rebecca Home for girls. The church won at the trial level but lost at the appeal level in Texas. Following is the remarks of the Appeals Court:
"Suit was instituted by the State to enjoin a church operating child-care facilities without a license...The issue is not whether People's Baptist is performing a service that falls beneath licensing standards. The three homes have a good record of high quality service. People's Baptist, from this record, could no doubt easily satisfy licensing requirements but has chosen not to do so...People's Baptist does not, however, resist all licensing to do business in Texas. In fact, it does its business and service as a corporation under the separate name of Corpus Christi People's Baptist church, Inc., and it complies with all business licensing requirements.
The record reveals that People's Baptist has provided excellent physical facilities, a dedicated staff and a list of many children who have been successfully treated by its programs. These facts show how readily the homes can be approved for licensing...We reverse the judgments of the courts below and remand the cause to the trial court with instructions to enjoin People's Baptist from operating these homes unless and until such time as it procures a license from the State."
Case No. 4-Bob Jones University
The following are excerpts from a letter written by Bob Jones 111 President of Bob Jones University to a Mr. Rich Blackstock of Independence, Missouri. It is dated August 23, 1987:
"From 1971 until 1983 Bob Jones University was in controversy with the IRS over its tax-exempt status. The issue culminated in a 1983 ruling against this institution by the U.S. Supreme Court declaring that since we held views that were contrary to prevailing "federal public policy," we would forfeit our exemption. That was their punishment to us for being unwilling to let the state dictate our religious beliefs...
The court ruled in our case that tax exemption was a subsidy (the first time that has ever been held) and that religious organizations had to yield their religious beliefs in favor of "overriding government interests." It was a horrible decision that has wide implications and upon which several horrible court rulings have been based.
The IRS then assessed, with a punitive retroactive tax settlement going back to 1971, something that was not mandated by the court and was optional on the IRS's part."
Case No. 5-Hale v. Hinkle-Supreme Court (1905)
In this important case on the nature of a corporation the Supreme Court said these things that are relevant to this issue:
Court: "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."
Court: "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."
Court: "There is a clear distinction between an individual and a corporation and the latter 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."
We could mention many more cases but these we believe are sufficient to explain that the Indianapolis Baptist Temple and other unregistered N.T. churches had reason to believe that they were on solid legal as well as constitutional grounds when they severed all relationship with government at all levels in order to preserve their constitutional guarantees. And to be able to conduct their ministries on both the state and national level according to the word of God. Now lets examine what these cases taught us.
They taught us that corporations and other legal entities such as Trusts and unincorporated associations or religious societies have no constitutional guarantees. They have only those those that the courts will allow and that are interpreted by the courts. Corporations and other legal entities enter the realm of Caesar through their legal structure and must operate by statute law rather than by the Holy Scriptures.
Incorporation is considered by the Courts as the same as a license.
If one license is applied for no matter what or how reasonable it may be it proves that there is not a conviction against State licenser of other ministries.
Incorporation or licenser destroys the scriptural polity of a New Testament Church.
It allows law suits contrary to the commands of scripture. I Cor. 6:1-8
It exposes the membership to the courts or other governmental agencies.
It exposes the records of the church to the courts or other governmental agencies.
It causes the leadership of the church to be an informer for the government.
It teaches the erroneous doctrine that the New Testament Church has a spiritual nature and a legal nature simultaneously which is totally contrary to the bible.
It makes the N.T. Church accountable to God biblically and the state legally contrary to the scriptures. God's church is not a dichotomy.
It limits the N.T. Church in its divine mission of preaching the gospel to every creature through zoning laws, etc.
It places all ministries of the N.T. Church under governmental control including the pulpit ministry.
These things that have been mentioned are just the tip of the iceberg. We could mention over a hundred similar problems. But these should be sufficient.
However the minute that we were dragged into court the judges totally ignored the principles mentioned above and began to carve out new legal territory. The first example is Judge Sarah Evans Barker, Chief Judge of the Federal Court in Indianapolis who was the trial judge in our case.
She began immediately belittling our faith by saying, "IBT is an independent Baptist church, defining itself as a New Testament Church." She refused to allow us to define who we are. Do you think for a moment that Judge Barker would not allow homosexuals to define themselves as "gays?" She also knows that churches defining themselves as "Independent Baptist Churches" have lost significant cases dealing with taxes and wanted to hang IBT with those cases by saying that we are just like them. However at no time did those churches declare themselves to be N.T. Baptist churches.
She recognizes that IBT went from a corporation to an unincorporated association (religious society) in 1983 but refuses to say that the church went from the society to operating as a New Testament church in 1986 although she recognizes according to the record that we did.
She also acknowledges that the old corporation used EIN# 35-1037016 but then declares that even though the church did not have a number from 1984 on and that the IRS assigned the tax to an entity with that number it doesn't make any difference. Her exact words were, "Although Defendant (IBT) may not be the same entity assessed by the IRS, we must note that Defendant nonetheless could be held liable for the assessed taxes."
She also admits that Plaintiff (U.S.) concedes that the federal tax scheme conflicts with IBT's religious doctrine. However she says that it doesn't make any difference.
She refused to recognize this case as a case of First Impression because if she did she knows that she would have no precedent cases to rule against us. The Seventh Circuit Court of Appeal played the same game with us, even demanding that we give federal law to back up our case. Thankfully Mr. Cunningham could site two such cases. This means that they are not interested in a case that has no precedent for them to rule on.
She says, "IBT attempts to distinguish all of the applicable case law by pointing out that none of the cases involve a New Testament Church. For the Court's purposes, this is a distinction without a difference. We find no reason not to apply the clear principles set forth by the Supreme Court to IBT simply because it designates itself as a New Testament Church." Is this not the height of arrogance for a federal judge to say that a church cannot define its own doctrinal nature but must accept a legal status that the court says that it must have. The state will be more than happy to define what that legal nature is which would be totally contrary to the scriptures and the First Amendment by establishing a state defined church.
She uses the Lee case as the precedent among others to rule against IBT. She said that Lee who was an Old Order Amish cabinet maker had to collect and pay the tax therefore IBT did too. By saying this she declared that the church was involved in commercial activity but doesn't say what it was.
She even mocked our faith by saying, "IBT even suggests that it is neither a corporation nor an unincorporated religious society. Rather, it is a New Testament Church and nothing more. This position fails to recognize the legal nature of IBT, which the record establishes to be that of an unincorporated society." Her reason was, that's just the way it is. She implies that all other churches are religious societies such as St. Luke's Methodist Church in Indianapolis therefore IBT must be too. In essence she is saying that we are delusional. Sort of like what Festus said with a loud voice, "Paul, thou art beside thyself; much learning doth make thee mad." (Acts 26:24)
The Seventh Circuit declaration written by Judge Ann Williams is even more incredible, if that's possible. The three judge panel said, "...IBT takes issue with the district court's characterization of it as an unincorporated religious society under Indiana law. IBT contends that it is a "New Testament Church," not an unincorporated religious society, and that by characterizing it as such an entity, the district court "established" a state church and imposed on IBT a form of worship contrary to its beliefs. The district court did neither of these things. It simply described the legal (not religious) nature of an already existing church. In any event, it does not matter what sort of entity IBT is. Whatever it is, it must comply with the federal employment tax laws. Thus, IBT's objection to the district court's characterization of it is both without merit and beside the point. IBT's challenges to the application of the federal employment tax laws to it are without merit. Accordingly, we AFFIRM the judgment of the district court."
Now as Paul Harvey always says, "Now you know the rest of the story." This is the reason that the Congress and the state legislatures who have the fiduciary responsibility must straighten this mess out or there will be no freedom to worship the God of the Bible in America.