Miracle Ministries & the School of Miracles

Short answer, YES. Is Miracle Ministries a 501c(3) corporation? No.

In the USA, many people believe that the only way for a Church or Christian organization such as Miracle Ministries to receive Tax Exempt status is to apply to the IRS to become a Tax Exempt corporation under section 501c(3) of the Internal Revenue Code. Not So!

Churches and other religious organizations have been tax exempt since colonial days. While according to the US Federal court tax exemption isn't required under the Constitution, it is allowed and is seen in a legal sence as a subsidy. Tax exemption is granted in all states as well as federally, which brings us back to the IRS. Section 501c of the Internal Revenue Code (IRC) describes the type of operaions that an organization must do in order to be considered tax exempt (this includes the deductability of donations for the donor). Subsection c refers to Churches, etc. and so most Churches have incorporated under this section thinking that this is the only way to become tax exempt.

Is Miracle Ministries Tax Exempt?

Short answer, YES. Is Miracle Ministries a 501c(3) corporation? No.

In the USA, many people believe that the only way for a Church or Christian organization such as Miracle Ministries to receive Tax Exempt status is to apply to the IRS to become a Tax Exempt corporation under section 501c(3) of the Internal Revenue Code. Not So!

Churches and other religious organizations have been tax exempt since colonial days. While according to the US Federal court tax exemption isn't required under the Constitution, it is allowed and is seen in a legal sence as a subsidy. Tax exemption is granted in all states as well as federally, which brings us back to the IRS. Section 501c of the Internal Revenue Code (IRC) describes the type of operaions that an organization must do in order to be considered tax exempt (this includes the deductability of donations for the donor). Subsection c refers to Churches, etc. and so most Churches have incorporated under this section thinking that this is the only way to become tax exempt.

Tax exemption for Churches was available before this legislation was introduced by Sen. Lyndon Johnson in 1954. If all of a sudden all Churches were required to incorporate to maintain their status, do you think there would have been a little noise about it? Of course. They didn't care because the IRC doesn't require Churches and other religious organizations to incorporate to attain that tax exempt status. That's right, there is no requirement to incorporate. Section 501c(3)501c(3) simply provides a type of corporation that fits the roll of a Church so that they are not precluded from incorporating if they choose to do so. In fact section 508a says that organizations must incorporate unless they are granted an exception from that requirement in 508c508c. Section 508c(1A) says "churches, their integrated auxiliaries, and conventions or associations of churches" receive a mandatory exception from the requirement to incorporate. As far as the IRS is concerned, church is an undefinable term. Whether a particular organisation is considered a church or not is determined on a case by case basis but any group of Christians meeting as a Church (under the leadership of one person acting as a Pastor, meeting regularly but not necessarily on Sunday morning) would meet past precedent.

These organizations receive full 501c(3) status, provided they comply with the rules such as no political activism, without ever having to incorporate or file anything with the IRS. Despite popular opinion, the rules about politics don't prevent churches from speaking out on controversial issues such as abortion or homosexuallity. It simply prevents churches from endorsing one political candidate over another. You can say that abortion is murder and therefore against the Ten Commandments. You can even say that Candidate X supports abortion (assuming that he/she actually does of course) because it is a matter of public record. You can't say that people should vote for Candidate Y because Candidate X supports abortion which is murder, though. This, obviously, is politicking.

So why not just incorporate and make it all official?

The most obvious reason, but perhaps the least important, is the lack of any requirement to file and do paperwork. Another misconception is that just because a Church isn't incorporated under the IRS doesn't mean it isn't offical. We'll come back to that in a moment.

The real problem with incorporating is that you are then in submission to the Government instead of Jesus (not as well as). When you incorporate the State grants you permission to exist and they can take that permission away just as quickly. A Church is commissioned by God. He calls it into existance, so there is an immediate conflict there. A corporation is seen legally as an agency of the government. They collect and remit tax for the government and as it's agent they are not allowed to speak against government policy. Churches have been closed down for speaking out against abortion and homosexuallity (without infringing on the political rules) because it contradicted Government policy and so their "agency" was closed.

Tax exempt organisations are even worse off in this regard. According to the law, they are seen as tax collectors who keep the tax they collect in trust. When a Church doesn't pay corporate taxes it is legally defined as though they have but the money is retained in trust by the Church. So if the State for what ever reason deceides to revoke the tax exempt status of a church all that tax money must be given back to the Government. This naturally forces the church to close. The big problem is that the Government considers all those who have contributed to the Church over the years as shareholders (even if they have attended and given only once) and are liable for the tax money that the Church can't pay back. Do you still want to participate in a 501c(3) Church organization? I don't.

So how do you make things official without the IRS involvment?

Your lawyer and accountant have probably never heard of it because it isn't taught at college. It is inherrited from British Common Law, legislated in many states and recognized by all. It is called Corporation Sole. The regular type of corporation you are familiar with is called Corporation Aggregate. The difference is that a Corporation Sole is not a legal entity (juris ficta). It is the title of a given office that is incorporated and nothing more. A single person holds the office and operates the office in accordance with Canon Law (Biblical Law). It isn't under the juristiction of the IRS or any federal/state body in any civil matter (and because it isn't a juris ficta entity it isn't subject to criminal law but the office holder, naturally, is). Because it isn't under the juristiction of any Government body, it has no filing or accounting requirements. This brings compliance costs down to $0 which means more money is available for the work of the ministry. Accounting practice is simply what the office holder needs to do his/her job efficiently. We have set up a fairly standard accounting system using Quickbooks so that if we need to show someone how the money we receive is spent then we can do so easily.

Corporation Sole was developed for the Church in England so that a Minister wouldn't own the local church and it's property, the office he held as the local Minister did. The next office holder upon his retirement, move to another parish, etc. could then become custodian of the church and property without having the complexity of change of ownership paperwork etc. It also solved another problem of a Minister dying while in office and his next of kin seeking ownership of the church rather than it passing to the next office holder.

Most large Church organisations like the Catholic Church are set up as a Corporation Sole. The British Monarchy is a Corporation Sole. The titles of the Monarch are passed to the next successor. The successor is chosen based on birth but if this were to change at any point in the future, the Monarchy wouldn't cease to exist, simply the process by which a successor is chosen. Imagine being elected King or Queen. Well if the British Parliment wanted it that way they could.

All income received by the holder of a Corporation Sole office is not their personal income but belongs to the office. The office pays their living expenses and, at it's discretion, can give them compensation for their time and effort. This is not a wage or salary and as such isn't subject to income tax. This is made possible by the office holder signing a "Vow of Poverty". Don't worry, it isn't what you think it is. Most people think that a vow of poverty is where you give away everything you have and live off charity with no possessions for the rest of your life. In reallity a vow of poverty (at least in the context of a Corporation Sole) is a formal declaration that the office will pay your expenses and all income you receive while doing the work of the office belongs to the office. You can still hold a regular job and the income you receive from that is yours. You can still own a house, car etc. Your assets and liabilities are completly separate from the assets and liabilities of the Corporation Sole and one is not liable for the liabilities of the other.

A Corporation Sole isn't an employer. Others who work for the Corporation Sole are legally considered Ministers, not employees. They sign a vow of poverty too and have their living expenses paid by the office and any monetary income they receive from the office is considered compensation and is therefore not subject to income tax. As with the office holder, they can have a regular job as well. Their assets are separate etc.

As far as the US Government is concerned, a Corporation Sole is just like an Ambassador of a foriegn country in Washington. When the new Ambassador arrives the old one doesn't transfer ownership of the Embassy and the Ambassadors residence to the new guy. Those assets are held by the office not the individual. We, as Ambassadors for Jesus Christ, are organized and recognized in the same way.

The reason for being a Corporation Sole instead of a 501c(3) corporation is because we stay separate from the Government and are under the leadership of Jesus Christ alone. We have the same benefits of a 501c(3) corporation without any of the costs. Why would a Church incorporate then? Well in Virginia and West Virginia the State Consitution says that the State is forbidden from incorporating a Church (this is the only peice of separation of Church and State law in the entire country) because they knew that Churches should be set up as Corporation Sole organizations. This has not prevented these States from incorporating thousands of Churches which could be closed tomorrow if some enterprising athiest lawyer decided to persue it. Pastors today don't know that Corporations Sole exist. As I said earlier most lawyers and accountants don't know about Corporation Sole so when God moves someone to start a Church or Ministry, they ask someone (a Pastor, lawyer etc) who tells them about incorporation under section 501c(3) because it is the only thing they know.

If your Church is incorporated, ask your Pastor if he/she is aware of the Corporation Sole. If they aren't you are welcome to pass on my email address at the bottom of this article so we can help them get in touch with lawyers who know about this. If they do know about Corporation Sole and have decided to incorporate anyway, you should wonder why they have decided to embark on a course with higher expenses and no benefits that places them in submission to the Government rather than Jesus Christ.

If you have any questions about Corporation Sole, how Miracle Ministries is set up or our Tax Exempt status then please email me. My address is webmaster@schoolofmiracles.com

Comments