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1.
Exactly what kind of churches do you help to
start?
I work
exclusively with Christian leaders to help
them start Biblical Christian churches.
While I love and embrace all kinds of
people, and respect others' beliefs, my
calling is to help start Christian churches.
That means churches whose beliefs are
aligned with the teachings of Jesus Christ
and subscribe to traditional Christian
principles as taught in the Bible. I
strictly limit my work to Biblical Christian
churches and do not accept requests from
other kinds of churches for my consulting
services.
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2.
Is it true that only a church or church denomination can start a
church?
No,
that is not true. Although churches and church denominations
start new churches all the time, it is not necessary to already have
a church in order to start a new one. Any group of people that wants to worship
together, even a small group, may start a church. In addition, an
individual may start a church on behalf of a group. This book
will walk you through the simple but necessary steps of starting a
legitimate church.
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3.
Does a person have to be an ordained minister to start a church?
No,
a person does not need to be an ordained minister prior to starting a
church. The Bible doesn’t teach that only currently ordained
clergy may start a church. Anyone who has been called by God
into the ministry is qualified to start a church, and may thereafter
be ordained through that church. Individuals who were
previously ordained through a church or church denomination may
start a church even if their ministerial credentials have been
revoked. If you
believe that you've been called by God to enter the full-time
ministry but you'd like to be ordained in a new church that you
start or help to start, rather than in an existing one, you may be
ordained in that new church. This book will show you how.
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4.
Is a layperson (someone who is not an ordained minister) qualified
to start a church?
Yes, a
layperson is qualified to start a church for at least two reasons.
First, the Bible does not prohibit it but more likely encourages it.
The
scriptures teach that all Christian disciples are "ministers" of the Word of God.
And we’re all called to spread the gospel of Jesus Christ and to
“seek and save the lost.” Second, starting a church is a personal expression of the religious
freedom that is guaranteed to all citizens under the First Amendment of
the United States Constitution. Anyone who has been inspired by God to help start a
ministry, is qualified to start a church and may thereafter help ordain
someone else through that church.
Of course, there are those
who claim that only persons who are called
by God into the pastoral ministry should be
able to start a church. I agree that in most
cases, those whom God has called into the
pastoral ministry and given a vision to
start a church, are the ones who start
churches in America. But many who were not
called into the ministry, but rather called
to support those in the pastoral ministry,
have successfully started many churches.
This has allowed those who were called into
the ministry to focus on ministry, rather
than on the more legal and business aspects
of starting a church. The bottom line is
that we can and should do all we can to
spread the gospel. And unless God has
prohibited it in the scriptures, it comes
down to a difference of opinion as to
whether it can be done or not.
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5.
Does any government body have authority to legislate where, why, how or
who may start a church?
No, absolutely not!
Contrary to what some may believe, no government body in America,
whether local, state or federal, has authority to legislate where,
why, how or by whom a church may be started. Such legislation
would clearly be unconstitutional under the First Amendment.
Imagine a small town in America where most of the residents believe
in Jesus Christ, but where no “church" currently exists.
Consider the absurdity of a law that forbade the community from
starting a church unless it was done in a certain way, at a certain
time and place, or by someone with certain credentials. If
those requirements couldn’t be met, the people would effectively be
prohibited from worshipping together. That happens in other
countries. But it doesn’t, or shouldn’t, happen here.
When it comes to erecting an
actual church building, zoning codes are
important to keep in mind. But
erecting a building is not the same thing as
starting a church. Also, if the church
desires to incorporate, the state's
nonprofit corporation law typically has some
baseline requirements. But, forming a
corporation is not the same as starting a
church. Corporations are formed by churches
merely as "vehicles" to help churches limit
their liability and also participate in our
modern, business-oriented society. It is
essential to understand that the church and
the corporation are two completely different
"persons." And the church is superior in all
things. For example, if the corporation were
dissolved, the church would continue.
However, if the church were dissolved, the
corporation would also cease to exist.
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6.
Can a church have just one member, or
one family as its sole members?
This is an interesting question
whose answer is "Yes" and "No." As a matter of
constitutional
and religious freedom, a church can have only one member, or one
family as its sole members. One of the most wonderful things
about living in America is that we are free to believe anything we
want, and act on those beliefs, as long as they are not harmful or
dangerous to ourselves or to others, or violate any laws or any
clearly established public policy.
However, as a matter of tax
law--where a church takes the position that
it should be tax-exempt--a church may NOT have only one member, or
one family as its sole members. If that were allowed, then
anyone could call himself, or any family could call itself, a church and stop paying taxes.
But that is not permitted under the tax laws. Therefore, any individual or
family choosing to start a church that is restricted in
membership to that individual or family,
should not expect to secure tax-exempt
status, or to otherwise reduce or eliminate
their tax liability, in connection with that
church.
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7.
Why does every state have a nonprofit
corporation law that also governs "church corporations" in some
manner?
The
purpose of the nonprofit corporation statutes of each state and the
District of Columbia is to give nonprofit organizations, including churches, the opportunity to incorporate
if they so desire. There are certain benefits and advantages to
incorporating a church. States decided some time ago to allow
churches to incorporate so they could enjoy the many benefits and
limited liability that is afforded other corporations.
Virginia and West Virginia began allowing churches to
incorporate only recently. Among other advantages, the
corporation serves as a vehicle for promoting and carrying out the
activities of a church with more seamless participation in our
modern, business-oriented society. It also helps
protect church members from legal liability.
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8.
Is church incorporation a requirement?
Doesn't it create "state-run" churches?
No, churches are not required
to incorporate. Instead, churches may be formed
as unincorporated associations of individuals who come together
for a common religious purpose. Many
church leaders choose to incorporate because
they see certain benefits and advantages in
doing so.
The primary reason that
churches incorporate is to take advantage of
limited liability protection. This means
that any liability incurred by the church,
such as a multi-million dollar verdict
against the church, is recoverable only to
the extent of the church's assets. Thus,
individual church members are shielded from
personal responsibility for those
liabilities. Churches generally appreciate
the opportunity to remove any threat of personal liability
that may otherwise hang over
their members. When a church is formed as an unincorporated association,
the individual members generally bear the
brunt of that liability. And that is not a
result most churches are willing to live
with. Moreover, church leaders arguably have
a duty to disclose to potential members when
the church is formed as an unincorporated
association, and how that form may affect
the potential member. When churches do so,
they often report that potential members are
turned away. Another benefit of
incorporation, is the fact that a corporation is qualified to own
property in its name, while an unincorporated association is not. And, a church corporation may sue
and be sued. Although no church
wants to be sued, the fact is that litigation against
churches continues to soar through the years, where not long
ago, it was unheard of. In their roles as protectors, many church leaders
would rather have the church be sued, and
not the individual members.
As for
the question whether the church becomes
"state-run" by incorporating, many church
leaders don't think so. Unlike a typical
nonprofit, churches are not generally
subject to the scrutiny of their state's
attorney general, and mandated-reporting on
charitable activities is restricted to
non-church entities. Also, most state
nonprofit corporation laws are written so
that churches can draft their organizing
documents (articles and bylaws) in ways that
acknowledge the preeminence of the church
over the corporate form. In some cases, a
board of directors can be completely
dispensed with. In others, the church can
place all the authority of a board of
directors in the hands of its ecclesiastical
body, such as an Eldership group, or the
Pastor and associate pastors. Even in
Maryland, whose nonprofit corporation law
appears to infringe on the sovereignty of
churches and their right to self-govern, its
highest court has specifically ruled that
the law "imposes no particular form of
church government or property control upon
any church incorporating thereunder, but
leaves the matter entirely to the will of
the churches involved."
The
problem arises when churches incorporate
blindly. That is, they simply file and adopt
boilerplate articles and bylaws. Or, they
hire secular lawyers or consultants with
little or no experience in drafting
governing documents from scratch that
specifically benefit the church and its
ministry. Churches should do all they can to
avoid the frustrating result of having
lay-persons completely take over a church
(unless that is the church's desire result),
or having their biblical missions "usurped"
by operation of state law. The solution is
simple. Church leaders need a qualified
professional who will carefully study their
state law and expertly draft documents that
solidify the preeminence of the church over
the corporate form. Then, it must be taken
one step further with a carefully structured
Church Constitution that establishes a very
clear structure of church authority and the
fact that the church is superior to the
corporate form in all matters. Not just
anyone can help with that.
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9.
Do you
recommend church incorporation?
I recommend
that you carefully consider all the available options and
the reasons for each, then do what is right for your church.
Many churches elect to incorporate because of the
many benefits and advantages they perceive of doing so.
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10.
Is it possible to form a church as an association of
individuals and completely forego incorporating it?
Yes.
A church may elect to organize as an unincorporated
association. Keep in mind that ministries that choose that
form potentially submit their individual members to risks and liabilities
for the acts
or omissions of the association, and it's members. In other words, each
member of the association could face
personal responsibility for the debts and
liabilities of the church. It hardly seems right, but with
litigation against churches on the rise, this may be a
distinct possibility in a number of states. In addition, an unincorporated association
cannot legally do many things that a corporation may do, such as own
property in its name. You may or may not care about that.
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11.
Is starting a church a constitutionally guaranteed
act of religious freedom?
Yes. Starting a
church is most definitely a constitutionally guaranteed act and expression
of religious freedom. However, for the purposes of
tax law,
which is a very important matter for every church to
consider, not just every "church" will be considered tax
exempt. So long as taxation is the "law of the land,"
the state has a "compelling interest" to make
sure that only "bona fide" churches--those that are not
formed solely for the purpose of skirting the tax
laws--secure tax-exempt status.
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12.
Why does the federal government have a test for what a church is or
is not?
The simple
answer is that, as far as we know, churches have not been
recognized as having a "Constitutional right" to be free
from taxation. Having said that, it's important to
understand that, upon formation, a legitimate church is automatically
considered tax exempt by the IRS.
Nevertheless, in administering its taxing duties, the Internal Revenue
Service applies the
federal “church” test in reviewing the Section 501(c)(3) tax-exemption
applications of religious organizations. According to the IRS, the test is not meant
to infringe on religious freedoms. Rather, its
intent is to help identify a "bona fide" church for tax law purposes
only. A tax-exemption application is
filed by religious groups that want the IRS to recognize them as
churches, and therefore, exempt from federal income taxes.
If the IRS
does not receive an application from a religious group, it does not
automatically apply the test to that organization. But when it does receive an
application, it wants to make sure that the applicant is a legitimate
church, and not just a scheme to avoid paying taxes. The criteria used to evaluate church status are imperfect and
perhaps even short-sighted. They may even be legally challenged on
several constitutional grounds. But the goal of the test is to help the
IRS define the term “church” in a way that doesn’t restrict religious
freedoms, and yet prevents abuses by groups, families or individuals that may want to unfairly
avoid taxation. In the view of the IRS, if the “church test" did not exist, then anyone,
including individuals, families, and commercial and social enterprises
could claim “church” status to avoid paying taxes. And that would harm
the tax exempt opportunities of legitimate churches.
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13.
Isn’t a
church automatically tax exempt?
Yes, a legitimate
church is "automatically" extended recognition of tax exempt status under federal law.
This simply means that they need not file
IRS Form 1023, the 501(c)(3)
application for recognition of tax-exemption. However, in
the eyes of the IRS, an
organization that would not pass the federal "church test" is
NOT
automatically tax exempt, even if it elects not to file a
501(c)(3) tax-exemption application. Individuals,
families, commercial endeavors, or any other enterprise that
creates a scheme to reduce or eliminate their tax
liabilities under the guise of a "church," may be prosecuted
by the IRS
and required to pay taxes.
Please also read FAQ #18
regarding the fact that, under the IRS
regulations that govern exempt
organizations, churches are also
"automatically" prohibited from exercising
certain constitutional freedoms, unless they
choose to pay taxes.
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14.
Is filing an application
with the IRS for 501(c)(3) tax exemption required for churches?
No. As discussed above, churches
are not required to file the 501(c)(3)
tax-exemption application (IRS
Form 1023) to be recognized either as a church or as tax exempt.
However, many churches choose to file the tax-exemption application because of the advantages they
believe exist
in doing so.
For
example, a tax-exemption determination
letter makes it clear to church donors that their contributions are tax
deductible. Some church leaders believe that, otherwise, donors could never be sure
if their contributions were deductible, and that
uncertainty could discourage their willingness to make contributions,
especially substantial contributions, to the church.
In addition,
every state and the District of Columbia, have a set of laws that
allow churches to secure exemptions from some or all of the
following taxes: corporate, income, franchise, sales, use,
personal property, and real property taxes. Without an IRS determination letter, it
could be difficult to secure some of those exemptions. State laws
exempting churches from these taxes are
often written with the expectation that
churches will first obtain a determination letter
from the IRS. Therefore, if a church elects
not to file the IRS Form 1023, it's possible
that it won't be recognized as tax exempt
under state law.
Also, vendors
that are asked to forego sales taxes for churches often require proof
in the form of a determination letter. Otherwise, they are hesitant to
give a sales tax break to an organization that may not be a legitimate
church. With respect to ministers, religious organizations whose status and ordination
practices the IRS has evaluated and recognized as tax exempt, make it easier
for their clergy to claim “parsonage” or “housing allowance” exclusions
on their personal income tax returns, as well as other special clergy
tax privileges.
Some church
leaders conclude that, overall, a tax exemption determination letter from
the IRS gives churches a stamp of legitimacy. Not
because the government has the right to approve of churches,
because it doesn't. But rather, because Christian
churches have good reason to claim all the advantages of the
tax laws, and to allow reasonable scrutiny into their
legitimacy in doing so.
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15.
Are churches free to ordain anyone they see fit to be in the
ministry?
This is another one of those
questions whose answer is "Yes" and "No."
First, churches are
absolutely free to choose whom they believe is fit
for ordination into the ministry. In fact, churches may ordain many
different kinds of ministers, including ministers of music, of
education, of youth activities, etc…as well as ministers for the
pastoral ministry. When churches ordain their ministers, they do so in
accordance with their religious doctrine and principles. That
expression of religious freedom is a constitutional right.
However, a church's "ordained" ministers may not necessarily be
considered "ministers" for state and federal tax law purposes. To take advantage of the special tax benefits available to clergy, a minister must meet the
requirements of the federal "minister test."
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16.
Why is there a federal test for who is
a "minister?"
The federal test of who is a “minister” is
strictly for federal tax law purposes. The IRS has no right telling a
church who or how to ordain. But the IRS does not extend the
special tax privileges for bona fide ministers to every person ordained
by a church. Otherwise, a church could literally ordain all of its
employees, officers and directors for the purpose of helping them avoid
the payment of certain taxes. That would be illegal under the tax laws and potentially subject those individuals to prosecution for tax
evasion. It would also harm
legitimate churches.
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17.
Why is it important to be very careful about who we entrust
our church start-up to?
You will find that some of the
vendors and so-called "experts" who sell books and services
to assist a church start-up carefully omit specific
information about their credentials. They create the
impression that they're knowledgeable by repeating and
restating some facts about church-startups. They even peddle
resources that require legal expertise for their
effectiveness, but never mention where those resources came
from, or who wrote them. They speak as "pseudo-authorities"
hoping you'll simply ignore the fact that legally sound
resources should be written by legal professionals with
experience and expertise in the specific area of law. Some
hope you won't notice that their resources may have been
"hired out" to "Ghost Writers."
Despite their shortcomings and
lack of authority they boldly give legal advice, even on
their websites, much of which is ill-advised and plain
wrong. For example, when it comes to church-related policies
and procedures, constitutions and bylaws, and similar
documents, you should take special care not to be fooled.
Some of these vendors seem well-intentioned even if they
lack competence. Others seem to care less. In general, never
trust your church start-up to anyone who: (i) does not have the
credentials to assist you with such an important Calling;
(ii) does not exhibit a firm, ongoing commitment to Christian
ministries; (iii) does not provide you with a complete solution
including issues that are unique to churches; (iv) does not
disclose all costs up front, and (v) does not provide you
with an excellent guarantee, preferably a no-questions-asked, money back guarantee.
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18.
Is it true that we should include as many biblical concepts
as possible in our constitution or bylaws because we are
prohibited from bringing our Bibles into a courtroom?
No. Those are two of the most
dangerous fallacies that some non-authoritative vendors
create as they peddle their resources on the internet. It is
NOT true that we cannot bring or use our bibles in an
American courtroom. I can think of few suggestions more
absurd than that. If we find ourselves in a courtroom having
to convince a court that it should not entertain a
plaintiff's claim because it involves purely religious
matters, we would most definitely use our bibles to assert
that argument. This is one of the most obvious ways to help
a court understand what our specific religious convictions
are based on.
It is also NOT true that you
should include as many biblical concepts in your
constitution or bylaws as possible. That suggestion is based
on pure ignorance and a blatant lack of competence in
advising churches. You should never accept such advice from
anyone other than a legal professional with extensive
experience and expertise in working with churches. The
danger in throwing as many biblical concepts as possible
into a constitution or bylaws is that you cannot predict the
religious or biblical issues you may have to tackle in a
courtroom. But, in trying to be exhaustive, you end
up being exclusive. In other words, if you overlook
and fail to include a certain concept in your constitution
or bylaws, you give the opposition an opportunity to argue
that by not including it you intended to exclude it. This
can be very hard to overcome.
There are certain biblical
concepts that are important to include in a constitution /
bylaws. But, you should rely only on competent, experienced
guidance for these matters. Courts will not entertain claims
that require them to adjudicate purely religious matters.
Instead, they consider claims that are based on the neutral (i.e., not religious) principles of law. A main
goal of your constitution / bylaws should be to define
relationships, duties and responsibilities in biblical or
religious terms for the specific purpose of insulating them
from legal scrutiny. Merely throwing as many biblical
concepts as possible into the document can be
counter-productive to that goal.
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19.
Why should I obtain 501c3 status from the
government to be tax exempt? Isn't that just
a way for the government to bridle a
church's free speech?
It is a common
misconception among churches in America that
if they do NOT file the IRS Form 1023 (501c3
application for recognition of tax
exemption), they avoid the restrictions
placed on churches to refrain from
supporting or opposing either, candidates
for public office or pending legislation
(through propaganda, substantial
fundraising, and publishing or distributing
statements). Church leaders often assume
that since tax exemption is "automatic," so
to speak, they can still engage in these
constitutional rights by refusing to file
the 501c3 application.
If only it
were that simple. The truth is that what's
really "automatic" is the prohibition
imposed on churches against exercising those
constitutional rights. Here's another way to
put it.
The IRS is
really saying, "If you claim to be a
legitimate church, then you automatically
give up these constitutional rights. If you
want them back, then pay us taxes. In
exchange for your cooperation, we won't even
require you to turn yourself in to us by
filing Form 1023. But, should we catch you
exercising those constitutional rights, your
exemption will be revoked and you will be
forced to pay taxes."
Thus, churches
are already restricted from exercising
certain constitutional rights whether they
file the 501c3 application or not. The idea that
our government would require that churches forego certain
constitutional rights is incendiary to many
church leaders. In a perfect world, there would be no income
taxes and everyone, including churches, would be
free to exercise all their constitutional
rights. But the income tax system in America
is very real and nonprofits, including
churches, may avoid paying income taxes only
by giving up something else.
If a church
wants those constitutional rights back, all
it needs to do is pay taxes. The only other
solution I can see is no income tax.
But, it would take a presidential or
congressional act to abolish the Internal
Revenue Service. In any event, although I would
prefer that churches give up no rights, here's why this matter
doesn't keep me up at night. I know that God is
sovereign. There is no authority in heaven or earth that is
above God. And no one, including a worldly government, has
the power to hold back the hand of God or the advancement of
His kingdom. I do not believe that church incorporation or
tax exemption will ever prevent God from
fulfilling His will through His church.
Of course, should the day ever
come that churches are required to become "state"
organizations for the purpose of governmental regulation
into their religious and spiritual activities, you can count
on me to be among the first and loudest protesters.
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20.
What additional fees can I expect in
starting a church?
Unless you're
certain that your preferred church name is
available for incorporation, you may choose
to reserve the name through your Secretary
of State's office. Name reservations run
from $10 - $45 per reserved name, depending
on your state. Filing the articles of
incorporation with the Secretary of State
runs from $25 - $125. The fee to file the
IRS 501c3 Form 1023, Application for
Recognition of Tax Exemption is $750. Each
state may also charge fees for filing of
state tax exemption applications (income,
sales and property taxes). Some state tax
exempt applications are free. Others run
from $10 - $75 each. Most forms and
applications requiring a fee state the fee
amount on the form itself. In general, you
can expect to pay around $1,000, sometimes
less, in mandatory fees when starting a
church. These fees must be paid directly to
the government agency requiring submission
of the form or application.
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