Tuesday, June 8, 2010

The 501(c)3, Should Be Reconsidered

Is it time to rethink the 501(c)3 tax exemption for churches?  I think probably so.  What started as an exemption to encourage charitable giving has since morphed into a gag order on pulpits.  The government can now operate without fear of the enormous force for good resident in the Church. As a result, God has been expelled from our nation at a cost of enormous suffering to its people.

A Brief History
During WWI, taxes were increased to new highs. (15% for incomes over $546,500) This raised concerns at the time that the wealthy would stop giving to those organizations dependent on giving.  To answer those concerns exemptions for charitable giving were written into the tax code. But by the 1950's that code had morphed into a monster containing about 100 sections; albeit a baby monster compared to today's 700 or so, but a monster all the same. In the bowels of that monster were marionette's string for pulpits waiting for a savvy politician to happen along and put it to use. That politician's name would be Lyndon B Johnson.

In 1954 the section of code that interested the then Senator Johnson was numbered 501 which dealt exemptions on charitable giving.  Of particular interest to him was sub-paragraph (c)3 which exempted giving to houses of worship. The reason for this interest? Johnson saw the raw federal power enjoyed by the IRS, and since he was facing an uncertain campaign to hold a previously ill-gotten seat, he needed to use that power to squash what was at the time a powerful force, the Body of Christ. And that he did. Yanking on the strings he effectively pulled a many a preacher's mouth shut, at least as it pertained to shining a light on government evils.

For several generations now the government, through the IRS, has been supplementing the tithes of the faithful by means of a tax refund check. But thanks to Johnson, those refunds now come with strings attached; strings that are now accepted as good and right..., even Biblical. As a result of generations living with this code, there are many who now consider it a sin for a church to venture into the arena of politics. There are, as always, exceptions. It seems it is fine to talk about politics when the discussion involves the government intercepting the consequences of sin by promising promiscuous women a check for their fatherless children, and also profitable for those who want to have compassion for those less fortunate, and to assuage guilt for living a better life than those on the "other side of town", all with any personal expense. While such activity has proven to be profitable for those seeking gain in the economy of power and guilt assuagement, in the economy of love such ventures have proved to be bankrupt. As it turns out, throwing other people's money at symptoms brought about by the Church's retreat from the public square is not an act of love at all, it is idolatry.

Why Did The Church Agree To This Restriction?

Keep in mind that all governments legislate morality.  Also, modern governments have taken on the responsibility of arbitrating what is right and wrong, and then instituting their arbitrations through the public schools. These realities should raise a question in the Christian's mind.  Why would the American Church willingly agree to withdraw itself from the arena where the morality that will be taught to the next generation is decided?

One sad answer may simply be "mammon".  If this is the case, the Church has proven itself incapable of serving only one master. It perhaps could be said in defense of pastors that they may have rightly assumed that if their congregations suddenly lost those government refund checks, giving would wane. This may have been a precarious position for the man of God given the debt many of them found their organizations struggling beneath. Or, other pastors may have rightly concluded that the congregation was no longer willing or able to withstand the loss of a portion of their refunds in exchange for removing the government mandated restrictions on what is said from the pulpit.

But a sadder answer yet may be that pastors did not want to delve into the ugly world of politics.  This "law" simply gave them the cover they were looking for. Considering that the government had already become a benevolent benefactor in the minds of many congregates, politics had perhaps become a potential division bomb. "Good" may have no longer been a matter of Christ-likeness but rather seen as free handouts to the poor.

Sadder even yet is the fact that many churches then--and more now--having dumped the concept of a spiritual realm accessible through Biblical truth, aligned themselves with spiritual forces of evil that are in opposition to God's Truth. Under the guise of so-called Social Justice, a justice based on pure materialism, these churches become increasingly natural and materialistic. For these churches, there was no discernible difference between "the church" and the government party with which they had become aligned. What the party said went regardless of whether or not it agreed with Biblical teaching. The Bible is simply twisted to suit utopian fantasies. How ironic it is that this same party also now finds itself aligned with organizations that are hostile to Christianity.

The Ramifications

As a consequence of the Church's withdrawal from the public square, a great light has gone out in the halls of government leaving it to operate at every level without fear that that light will be shined onto its activity again. Many Christians are now at best woefully ignorant of a Biblical understanding of government in regards to its function and purpose, or worse, they have bought entirely into the social-justice lies that see Government as a God-like entity capable of ending the curse. In this darkened state many Christians also see the murder of millions of children in the womb as an acceptable price to pay in exchange for material ends that they desire. In this new world, the hunger and thirst of the spiritual man are, by decree, denied through the auspices of "separation of church and state". Simply put, government cannot give aid (tax-breaks) to philanthropic activity if that activity does not align with the morality it arbitrarily decrees.

Now, generations later, as if God gave us the ultimate desires of our heart, we, even in the midst of an economic down-turn, are a wealthy nation oblivious to the fact that we are also spiritually poor, blind, and naked. Many local churches are now either completely apostate, or they're hospitals dedicated to applying salve to the lives that have been wrecked by a culture that has institutionalized sin.  Or worse, they have simply become centers of feel-good-therapeutic-theistic entertainment that have passed the buck of the hard work of caring for the poor to those who simply confiscate wealth from one sinful man and redistribute it to another sinful man, asking only for power in return. And at the center of all this is what has become the Giant Pink Idol that no one wants to talk about standing in the of the middle of the sanctuary, the Democrat Party.


There were attempts a few years ago to change the law so as to give pastors more freedoms in the pulpit while allowing the congregants to keep their subsidies. But God would not have this. The attempt was thwarted. A bill entitled " Houses of Worship Political Speech Protection Act" was voted down. As one could reasonably expect, the votes were mostly along party lines, the true alliances of the Democratic party in plain sight for all who cared to look. But why should have Democrats voted to cut loose its control of pulpits? They are perfectly capable of selective enforcement of this code. Those who support democrats do so without fear.

It should also be remembered that nations which do not enjoy freedom of religion still have churches.  It's just that they are state-sanctioned churches. They are simply controlled, eerily, through similar restrictions on speech that we see being exacted on churches in America through the tax code.

America has only ever had one hope, the Church of Jesus Christ. Unless that Church comes to its senses, America will continue its descent into darkness and suffering. Furthermore, all our attempts to alleviate that suffering by mammon will only put us in a deeper spiral which will lead to increasingly radical "fixes".  Our nation awaits salt for its preservation, and light for its vision. Whether that salt will arise from under the foot of man, or that light will shine, remains to be seen.  But this we know, God will prevail and His Son's Bride will emerge spotless.


Dan said...

I wrote this about a year ago. I've refined it some but it has basically been sitting in my lists of drafts until now. I've been reluctant to post it as I try to be careful about what I say about the church in these public forums. I honestly believe however that it needs to be said and have noticed that the subject is increasingly being broached.

Stan said...

'bout time.

Susan said...

Praise God you have posted this!!! I have felt for years that the TRUE Church should stand up and say, we don't want any special "exemption" from the government. The TRUE Christian is not going to quit giving their tithe because it comes from the heart in obedience to God's word and not from a deduction on our taxes. This one act, of withdrawing from this exemption by any church body of believers would quickly show who is the salt and light in this dark and dying world. I believe firmly God would bless that stand above what we could hope or ask.

Jeremy D. Troxler said...


Great article. I got back from a homeschool conference last week and one of the lectures was entitled "When a Free Lunch Isn't Really Free". It had to do with government sponsored home education where in some states the government is willing to subsidize a families school expenses when they wish to home educate. Problem is when you take the money, the check comes with the accompanying curriculum requirements that you just agreed to submit to, which align with public school materials. Very clever and along the same lines as the 501(3)(c) position.

That's the thing about free lunches, oftentimes we're surprised at much those suckers cost.

Thanks for the post. I look forward to seeing some more of those drafts after you blow the dust off. Blessings.

timothymatters said...

You have said so well and so much clearer what I was trying to say in a post last week. Very well done. I plan on doing a post about this post when I get back to my home computer. People need to read this. It's excellent.

Dan said...




I agree. There once was a time that I felt that it really wasn't necessary to withdraw from the exemption, that plenty could be said while still complying with the restraint. But I've been pondering as of late the impact in the spiritual realm when we even agree to this arrangement. I would love to see a movement in churches to move away from this. I know the objections however. They will go something like this. Ok, you do this and the IRS will come and take this, and this, and this. And there will be the crux. Who will we trust? 2 Kings 18 has, I think, some wonderful insight on this.

Kathy said...

"Our nation awaits salt for its preservation, and light for its vision."

Danny, I love this. In fact, all of creation is groaning for this very thing. Wonderful post, as always. Sometimes it takes more than a paragraph or two to pry us out of our comfortable seats, and this post accomplishes such. Now, come home! We await!

Dan said...


I read that article before I published this one and realized the similarities. I'm hoping to write an article soon on seeing what our Father in heaven is doing and then doing it also.


It was of your article and Stan's that I spoke when I said "...the subject is increasingly being broached.

Craig and Heather said...

It should also be remembered that nations which do not enjoy freedom of religion do have churches. They are simply controlled by the state through similar restrictions on speech about the state.

Don't forget the "illegal" house churches that are regularly raided as hostile govts attempt to snuff out the light of the Gospel!!!!

Good piece, Dan. I have often thought the church made a huge mistake in taking govt. help.

Jesus said we will have trouble in this world. And the epistles are full of exhortation to persevere in spite of the abuse that Christ's family should expect.

While Paul wrote to Timothy that Christians should pray for our rulers and desire peace with our govt (1 Timothy 2:2), he didn't offer any guarantees.

We are certainly living in Laodicea. And we need to wake up and face reality.


christian soldier said...

good post - Dan-
the Founders never intended the church to be taxed- it was understood --according to the first 5 books of the OT of the Bible--

L. Johnson pushed the 501c3 through to shut his critics up--

because the church leaders did not know their US history much less their Biblical history - they bought into it--

so --by giving way to not being taxed they left the door open to be taxed ! and free speech squelched..

it should have been fought in the 50s when it was being sold by Johnson...

timothymatters said...

Hi Dan,
I had to write about the subject again, this time using your comments as well.


Thanks for your work on it.

Z said...

Man, Dan, can you think and write...I'm going to link to this. Thanks...

Elmers Brother said...

execellent. the Church should not be silent and sit idly by while the government supplants our freedoms in this way.

beamish said...

I wonder if you've considered the impact this might have had on the nemesis of LBJ, the civil rights movement which began in conservative Christian congregations such as Martin Luther King's.

timothymatters said...

Was Martin Luther King a conservative Christian? I'm not sure that he was from what I have read. Interesting that you would say that.

Z said...

Hey, Dan, I just got this email from a friend:

"BTW, I just heard on the radio news that church's which use wireless microphones for the Pastors will have to get rid of them. The government is claiming that 700 MHZ is the frequency needed for emergency response. What a transparent crock! We obviously know the real agenda. "

what's up with THIS? !!! you think my friend's right in his assessment of it being a 'crock'? Sounds real weird to me.

Dan said...

My thinking is that churches get these sorts of electronic devices at the same places everyone else does. The FCC regulates frequencies so that this sort of thing doesn't happen, although I have heard of it happening. My immediate response is that this is not true. My second is that if it is true, then it will affect anyone who is using such a device in this frequency range.

Also Z, again, thanks for the kind words.

timothymatters said...

BTW, I just posted a video on a pastor speaking to the issue at the Alliance Defense Fund's annual meeting.