Tax Question

10/14/2014

Hello, My name is Luis, a former pastor of (a well-known denomination). I have been called to start a home fellowship and have questions regarding taxes. What do I need to do if people choose to support this home ministry financially? For example, if we need to insulate a garage and someone gives for that, how will that need to look? If someone wants to support me so I can spend more time doing ministry type things, how should that be handled tax wise? I would love to learn about these things so I can serve Christ without withholding from the government. Can I have a church without becoming a”person” under the law? (non-profit). -Luis

Hi Luis, great questions. Some of this was answered in the Philippines of all places :) Here and elsewhere in HomeChurchMovement.com. https://homechurchmovement.com/Home-Church-Questions/Leaders-Wanting-Change/We-Don't-Need-Refunds

In short, there is no legal requirement in this country to register as a church or be a not for profit organization. 501c-3 really only relates to people who desire to get a tax rebate from the government. If people are merely giving gifts to do work for God with no desire for Caesar to pay them back anything, then that is totally legal. Kind hearted and generous people do it every day all over this country and the world, for the needy and family and neighbors. No one gives a wheelbarrow as a gift to a neighbor anywhere in America and asks for a receipt, and then attempts to get a rebate of reduced taxes. That would be crass. And we as lovers of people and of God are no different. Acts of kindness toward friends and relatives is certainly not illegal or immoral. And so, 501c-3 does not apply to us, as we desire no rebate.

If a person desires a tax rebate from the federal government then that organization should be registered as a not-for-profit organization. If they would like tax breaks for sales tax purposes then they would need to register obviously. 30 years ago, the group of believers, the church that I’m a part of did write a very lengthy essay to the IRS rather than just fill out a simple form for 501(c)(3) status. We figured that if we told our whole story about exactly what we were doing with no interest in building a building or having an organization, but just a bunch of friends who love Jesus with all their heart wanting to share good news with their neighbors and around the world, that if the IRS appreciated that and wanted to grant that status, then that was up to them. If we didn’t fit their paradigm and rejected that status, that was totally fine with us also. We just thought we would shoot it straight and answer essays where there were short blanks to fill in and let them decide. They actually very quickly approved our status. And then within a year or two, rather than have Board of Directors meetings and treasurer and a president or all the things that they understandably require for their purposes, including annual meeting reports and such, we felt that was fairly inappropriate and unnecessary to create an artificial structure when no one was wanting to get money back from the government anyway. So we returned their 501(c)(3) status to them with a thank you note and have spent the last nearly 30 years without any such thing. No one tries to get a refund, they simply do whatever God wants them to do with their money without expecting any repayment or even needing thanks from anyone. We think Christians should just be kind and generous as God directs them, without anyone second-guessing or pushing them or watching them do what they do for God alone and whatever they deem to be His purposes. Basic Christianity I think.

If people are supporting some saints to have more free time to Work for Jesus between “making tents” - that is certainly a first Corinthians chapter 9 possibility. A person whose personal needs are met by others because they are busy leading and serving other saints will need to report that as income to the IRS and pay taxes on it. And rightfully so. That’s very different, because it’s their livelihood and the IRS expects them to report this income, and one should. Since the idea of “pastor” is entirely unbiblical, it’s difficult to imagine writing this as an “occupation” on a 1040 form for taxes. Who and what you are as you provide for your own needs and the needs of others may defy common description, so that will be interesting. Maybe there is a fun place to start your thought process :-).

Love in Christ, Michael and many :-)