My understanding ... and I’ve worked for a 501(c)3, but I’m a lawyer ... is that the government does NOT require churches to file as 501(c)3 organizations, because the government actually DOES recognize the “sovereignty of the church,” as Alex would put it.
Filing as a 501(c)3 may, however, be useful to some institutional donors, such as foundations, which are required by their by-laws to give only to churches or 501(c)3 organizations, and which may be considering donating to certain church-affiliated ministries when it may not be obvious that said ministry is a ministry of the church.
In other words: John Doe has a very profitable year, and he wants to give money to charity in the future, but he’ll get taxed on the money unless he donates it before the end of the tax year. So he sets up a tax-free foundation, and gives to it. But it only stays tax-free if it only gives to tax-free charities, so he writes rules that it may only give to churches and 501(c)3 organizations. Meanwhile Pastor Bill’s church sets up a homeless shelter. The executor of John Doe’s foundation needs to be certain that donations to that shelter won’t jeopardize the foundation’s tax status.
In an ideal world, Pastor Bill could simply TELL the executor, “yep, that’s part of my church.” The problem is that Amy works for a food pantry. Her boss works at Pastor Joe’s church and named the food pantry after the church and a lot of her money comes from Pastor Joe’s congregants. And she told John Doe that her food pantry was part of Pastor Joe’s church and it wasn’t. And John Doe had to pay tax penalties because Amy never filed a 501(c)3.
So, Pastor Bill could either show John Doe a whole lot of paperwork establishing that his homeless shelter is a church-run charity, and swamp and confuse some foundation employee. Or he could file a 501(c)3.
I could understand choosing not to file the 501(c)3, and avoid entanglement with government bureaucrats. But making a moral issue of it... nah. Sounds like some Baptist churches just found a good marketing ploy.
"marketing ploy?"
I wish you would explain that.
It is not a "moral" issue with us, it is an issue of our faith, understanding of Christ as Head of the church, not civil government, and our deep desire, yea, conviction to obey the Scriptures in the matters of church polity and practice.
501(c)(3) is a kind of contractual agreement. And inside that agreement is a re-definition of church offices and officers. Further, it is a negative witness to government, implying to them that the church of Jesus Christ is something akin to civic organization like the Lion's Club and the Boy Scouts (not denigrating those organizations in any way).
Furthermore, the IRS is part and parcel of unregenerate (un-saved; non-Christian) government, which creates rules, regulations, and restrictions for 501(c)(3) organizations in the content of their oratory, publications, signage, positions, and associations. We do not believe the Church should place itself under such arrangement, where the Headship of Christ over the Church is surrendered to the whims of an increasingly paganistic government that rules according to its own public policy on myriad issues.
We take as example the underground churches in communist and other totalitarian countries (where we have actually worked underground), which to preach what they believe from the Scripture would be prohibited and punished if they were registered with the government, hence, they remain unregistered, and risk the wrath of government for conscience sake.
No, it hasn't come quite to that point yet in the United States, but it is a real potentiality, especially if government can get all "religion" registered.
If a missionary has established Biblical churches in countries where to register would mean government control, he wouldn't be inclined to register churches in the United States where there are no laws requiring it. He would, from his experience, rather see registration as a real potential danger.
Its the Sec of Treasury who directs the activities of the IRS. When I was involved with these entities, the IRS would avoid these organizations and only had a skeleton staff to administer its regulations.
Thus if such philosophical objections exist, it might be better for a church not to register since the government does not actively enforce the statues in this area.unless provoked by a specific action or individual.