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IRS Stranglehold

April 2, 2008

In case you haven’t noticed, I added a DONATE button to the page. I thought there might be some folk out there who wanted to help us as a ministry, and I wanted to give them the opportunity to do so. The important thing is not “Give us your money,” but rather the blurb below the button.

We, the leaders of Xtreme Encounters and Rahab’s Place, have made a decision not to play the non-profit game that the IRS imposes on churches who want the tax exempt recognition of what is known as 501(c)3. We have chosen to set both organizations (Xtreme Encounters is our church and Rahab’s Place is my personal ministry identity) up as for-profit entities.

Why on earth would we do that?

First, the benefit of being tax-exempt and not paying taxes on corporate assets is outweighed for us by the need to be a part of the political dialog in our city. IRS rules state that an organization can lose it’s tax exempt status by:

attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.

So, if we decide to show up at a city council meeting as a group to express our disagreement with a proposal before the council to grant a zoning exemption for yet another nudie bar to open up in our area, that could jeopardize our tax-exempt status. To us, it is worth the amount of taxes we will have to pay as an organization to keep the right to be a part of the dialog in our city. It is imperative to us to be able to be a voice for righteousness.

Another issue is that in order to keep your tax-exempt status, a certain percentage of your income has to come from charitable contributions.  In other words, you have to badger people for money.  If there is one thing that irritates me beyond endurance it is the beg-a-thons that Christian stations engage in, as well as the “GIVE TO UUUUUUSSSSSSS” letters that some ministries send.  After studying the IRS code, I have decided that some of that is dictated not by a need for funds, but rather the need to have enough donations to cover the money they make on their other activities in order to keep their tax-exempt status.

What about paying taxes on ministry assets?  What about it?  We want to be a positive influence in our community, an example to others and an instrument for change.  In America, money talks.  We want to start some self-supporting activities and businesses that will provide employment opportunities for people coming out of maladapted lifestyles.  If the Lord blesses our efforts, we don’t want our tax-exempt status being held over our heads because we become good business people and make a profit rather than begging for money.

We also feel that we will have greater accountability as a for-profit than as tax-exempt.  We actually have to file quarterly taxes and reports.  People will know where our money comes from and where it goes.

Some in the church have used their tax-exempt status as a means to grow wealthy at the expense of people who believed that their money was being used to promote the spread of the gospel.  Currently, the Senate is investigating a number of such ministries, some of whom are refusing to provide the requested information.  We feel that the best way to keep the government out of our business is to quit taking favors from the government.  Jesus said to render unto Caesar what is Caesar’s.  So we will pay our taxes like good citizens, and believe that God will bless us as we seek to be an instrument for righteousness and change in our city.

8 Comments leave one →
  1. BWA permalink
    April 3, 2008 9:19 pm

    This is an excellent idea and I foresee many emerging churches/ministries going this route because you are beholden to the government with the tax exempt status. What will churches/ministries do when the day comes that in order to be tax exempt that they have to line up with a set of philosophical criteria that is blatantly anti Christian? I think that day is coming. Good will come out of this as it will shut down the ministries/churches that have been abusing the saints through the pocket book. Another good thing will be that people will learn to give because the Lord wants them to give and to trust him in their finances rather than giving to get a deduction in their taxes.

  2. July 12, 2008 11:51 pm

    this is GREAT:::first time i’ve encountered
    a public conffession concerning convictions
    about tythe and offerings….BLESSINGS

  3. July 27, 2008 12:03 am

    Who servers two masters has to lie to one.AnonymousAnonymous, Twents Spreukenkalendar

  4. July 27, 2008 11:18 am

    No man is so old as to believe he cannot live one more year.SeanO%27CaseySean O’Casey, Irish playwright

  5. breakthroughbanners permalink
    September 28, 2008 8:06 pm

    I did the same thing…
    And I can say anything. Quite freeing is is not?

  6. Rachel permalink
    April 23, 2009 12:56 pm

    I am so glad to hear this. I hope what you have here spreads like wildfire throughout Jesus’ body.


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