Our Tax-Exempt Status

Why NOT 501c3?

Non-profit, or charitable, organizations, are expected to invest their income back into their community through the services and resources they provide. Thus they are qualified to be exempt from federal income tax. Typically they also can receive tax-deductible contributions, which means people and businesses can claim a tax deduction when they donate. Non-profit  tax-exempt status includes Faith-Based Organizations (FBO) like churches, temples, and other religious organizations.

To qualify for tax-exempt status under IRS code 501(c)(3), an FBO must apply to the IRS with sworn oaths and prove that it meets several requirements, including not violating “fundamental public policy”…whatever that could mean. Yet 501(c)(3) organizations must do more than conform to public policy, they must remain apolitical in their expressions, despite divine revelations demanding stronger stances.

Specifically, the code says, “No substantial part of its activity may be attempting to influence legislation.” Further, “the organization may not intervene in political campaigns on behalf of (or in opposition to) any candidate for public office.“ 

This means most FBOs can’t address public policy issues if they have to take a stance against (or for) any public policy or official. They can provide a forum to discuss things, but they can’t tell you what they feel strongest about if it goes against government mandates and protocols.

It should be clear to anyone that obtaining 501(c)(3) status they are essentially signing away the rights of a God-centered community.

Are there exceptions to this rule? Absolutely!

In IRS Publication 526, Charitable Contributions, the IRS again states that churches and other FBOs are qualified organizations and do not need to apply to the IRS:

“You can deduct your contributions only if you make them to a qualified organization. To become a qualified organization, most organizations other than churches and governments, as described below, must apply to the IRS.”

Examples. The following list gives some examples of qualified organizations.

Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations.”

This is thanks to Section 508 of the Tax Code, which is designed to protect such organizations from interference from the government. The intent of our U.S. Congress in passing Section 508(c)(1)(A) was to make sure that important First Amendment religious and speech rights were protected 

The 1969 Tax Reform Act included substantial changes in the treatment of private foundations and 501(c)(3) organizations. The changes included requirements that organizations seeking tax exempt status had to first apply, file a tax return annually, comply with rules and regulations that the IRS may from time to time prescribe, keep records of income and expenses, and render under oath statements about the organization.

Section 508 was part of the legislation passed in the Tax Reform Act of 1969 (H.R. 13270), codified as Public Law 91-17253. 

Section 508(c)(1)(A) states that “churches, their integrated auxiliaries, and conventions or associations of churches” are a mandatory exception to section 501(c)(3). 

That is, they are already tax exempt without notifying or applying to the government under section 501(c)(3). FBOs can receive the same tax exempt status and benefits as a 501(c)(3) organization, without a partnership with the government. 

Thus an FBO (church, ministry, or other God-centered community) does not have to apply to or notify the government (state or federal) of its tax exempt status, and is allowed to do so in order to maintain a separation between Church and State.

To review:

All organizations seeking tax exempt status must apply to the IRS except FBO’s.

A 508(c)(1)(a) FBO (Faith-Based Organization) tax exemption stems from the First Amendment and is not a government subsidy.

FBO’s can be organized and operate under Section 508(c)(1)(A) of the Tax Code the same as they can be organized and operate under any other section of the Tax Code. 

A 508(c)(1)(A) FBO has a constitutional and legal right to form; therefore, there is no required application to seek approval of tax exempt status.

Since 508(c)(1)(A) organizations are already tax exempt as a right they do not have to give up that right (religious exercise and free speech) as a condition of tax exemption.

FBO’s can be formed under Section 508(c)(1)(A) and enjoy “mandatory exceptions” from these requirements. Section 508(c)(1)(A) was codified in the Internal Revenue Code (IRC) in order to formally establish the right to “free” exercise of religion which had been a tacit standard upon which America was founded and governed since it gained its independence. A 508(c)(1)(A) is, by the very nature of its creation, a God-centered, non-profit, tax-exempt organization.

What is a Church? 

The term church is found, but not specifically defined, in the Internal Revenue Code. The use of the term church also includes conventions and associations of churches as well as integrated auxiliaries of a church. As many mosques, temples, and other spaces fall under this designation for the purposes of taxation (specifically exemption from taxation), the word “church” is not limited to traditional Christian places of worship and includes FBOs of all kinds.

There are many types of organizations and programs covered by the exception given to FBOs. According to the IRS – Filing Requirements for Churches and Religious Organizations:

“Every organization exempt from federal income tax under Internal Revenue Code section 501(a) must file an annual information return except:

1. A church, an interchurch organization of local units of a church, a convention or association of churches
2. An integrated auxiliary of a church
3. A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs
4. A school below college level affiliated with a church or operated by a religious order
5. Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries
6. An exclusively religious activity of any religious order
7. A state institution, the income of which is excluded from gross income under section 115,
8. A corporation described in Section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States and is exempt from federal income taxes
9. A stock bonus, pension or profit-sharing trust that qualifies under Section 401(required to file Form 5500, Annual Return/Report of Employee Benefit Plan)
10. A religious or apostolic organization described in Section 501(d) (required to file Form 1065, U.S. Return of Partnership Income)
11. A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48PDF, 1995-2 C.B. 418
12. A private foundation described in Section 501(c)(3) and exempt under Section 501(a) (required to file Form 990-PF, Return of Private Foundation)
13. A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee
14. An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less and therefore is eligible to file an annual electronic notice Form 990-N instead of an annual information return)*
15. A foreign organization, or an organization located in a U.S. possession, that normally has annual gross receipts from sources within the United States of $50,000 or less and therefore is eligible to file an annual electronic notice (Form 990-N instead of an annual information return)

Note: A Section 509(a)(3) supporting organization must generally file Form 990 or 990-EZ. The exceptions listed above are not available to a supporting organization unless it is an integrated auxiliary of a church (No. 2 above) or an exclusively religious activity of a religious order (No. 6).”

Further, the U.S. Courts have allowed for religious organizations to self-define and be treated as equal to Christian churches, covered under the umbrella term Faith-based Organizations (FBO).

Judge Brattin, Eastern District of California, in Universal Life Church, Inc. vs. United States, 372 F. Supp. 770, 776 (E.D. Cal 1974):

“…neither this court nor any branch of this government will consider the merits or fallacies of a religion. Nor will the court compare the beliefs, dogmas, and practices of a newly organized religion with those of  an older, more established religion. Nor will the court praise or condemn a religion, however excellent or fanatical or preposterous it may seem. Were the court to do so, it would impinge upon the guarantee of the First Amendment.” [and create a state Church]

In Federal court decisions in Virginia, Connecticut, and several other states, Five Percenters organized under the name of the Nation of Gods and Earths won the right to be recognized and treated in the same manner as other FBOs or religious organizations, despite not designating their culture as an organized religion, temple, FBO, or church.

Similarly, Righteous Family is not a Christian church or religious organization. We are an indigenous ministry dedicated to the best for the Earth and our children.

In the 501c3 guidelines for whether an organization qualifies as a FBO (or “church”), the IRS spells out the following requirements:

1. A distinct legal existence (Incorporated in Georgia as “Righteous Family LLC”)
2. Recognized creed (concept of relationship with the divine) and form of worship (observances of the divine) (see “The Science of Self: Man, God, and the Mathematical Laws of Nature”and “Daily Meditations”)
3. A definite and distinct ecclesiastical government (see “Knowledge of Self”)
4. A formal code of doctrine and discipline (see “Knowledge of Self”)
5. A distinct history (see “The Original History”)
6. A membership not associated with any other church or denomination (see “Righteous Family – A non-religious ministry of SERVICE”)
7. An organization of ordained ministers (see “God’s Services”(in development))
8. Ordained ministers selected after completing prescribed studies (see “The Solutionary Institute”)
9. A literature of its own (see “Supreme Design Publishing”)
10. Established places of worship (see “God’s Estate” (in development))
11. Regular congregations (see “Go to the Best”)
12. Regular services (see “Our Event Calendar” (in development))
13. Sunday schools for instruction of the young (see “Our Best Schools”)
14. Schools for the preparation of its ministers (see “The Solutionary Institute”)

Righteous Family meets the above criteria through its independent State of Georgia incorporation and operation as an indigenous ministry or church. Thus, Righteous Family is established as an IRS 508c(1)(a) Compliant FBO (Faith Based Organization)/Church, otherwise known as a Ministry.

For more on how Righteous Family came to be a ministry organized under 508c1a, read “Righteous Family – A non-religious ministry of SERVICE”

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