We're a "Free Church"; Not a 501(c)3

Many people are under the mistaken idea that, in order to be tax-exempt, churches must file with the IRS as a 501(c)3. What we discovered through our research is that this is not the case. Churches that are not 501(c)3's (also sometimes referred to as Free Churches) have all the protections, and tax-exempt status of non-profit corporations (501(c)3's) AND many additional ones besides. (For example, Free Churches do not file tax forms, they do not pay property tax and they can only be audited if they are running "unrelated businesses" and not reporting income from them.)

The Full Circle Family Church is also 'free' in the sense that we live by faith in the stream of God's abundance and by giving without thought of receiving have all of our needs taken care of through God's providence. Any services we provide are on a donation-only basis. We do not fund-raise by seeking grants, selling books (or any merchandise), hosting Bingo or community-dinners etc.

Follow this link to watch a video of the church's founders where we articulate the values upon which our church is founded.

Here is a copy of a letter we sent to the IRS clarifying our values and faith and new relationship with their organization:

June 22, 2010

To Whom It May Concern:

We have received your notification informing us that we are required to file a tax return for 2008. This letter is in response to that request and to inform you that we are a married couple and are no longer on the tax rolls. We have chosen to live a life based upon our faith in God and the desire to ‘give without thought of receiving’ and have relinquished any and all desire to accumulate capital wealth. All that we have has been given over in service to our fellow humans whom we regard as members of our family in God. We have chosen to follow the teachings of Jesus and his admonition that we ‘hold all things common’ (Acts 4:32-35). We have no investment in any financial markets, stocks or bonds and do not live a life based on usury. We own no house or land and devote our lives to serving those in need. Our days are spent in our gardens on land that has been donated for such use and all that we produce is given freely to those less fortunate. We are very happy knowing that God provides for us, as we provide for others, asking nothing in return.

We do not oppose the government of this land, but we do chose to live by the law set forth by the God who created it and that Law is to “love one another”. We do not see how this is possible as we continue to buy and sell our daily bread. In the Lord’s Prayer it states, “Forgive us our debts as we forgive our debtors.” We ask that you forgive us our debts.

We have nothing to hide and are forthright in presenting our beliefs and living by our faith. We know that you are doing what you believe to be right and we do not judge you. We do disagree with the basic premise upon which the tax codes are based. God “owns” this world and even our very lives. We believe humanity’s focus must shift toward seeing to it that none of God’s children go hungry or lack for the basics of shelter, clothing and all else that has been given freely by our Creator. We know that these beliefs may sound strange or foreign but they are true for us and protected by the Constitution. We are truly a “Church”, in every sense of the word; a Church in action (rather than just giving lip service). All that you may find lacking is a piece of paper, issued by the state legitimatizing our ministry. We are in the process of preparing to file the necessary paper work. We can send you a copy or our By Laws, if you like. What follows are two links for websites we have created and maintain that provide the evidence to prove that we do live by what we believe.

The Sharing Gardens - the demonstration of our beliefs

Full Circle Family Community - how we live.

If you have any further questions or comments, please feel free to contact us and we will cooperate to the best of our ability, without breaking God’s Law. We appreciate you and thank you for your time in considering our response. God be with you in these troubled times.

You’re welcome to join us! No one is excluded from the Kingdom of God.

Chris Burns

Llyn Peabody

Here is a lengthy quote from Lorraine Day, that elaborates on this distinction between Churches and 501(c)3 organizations (excerpted from a longer piece found on CLICK HERE.)

“Does the law require, or even encourage, a church to organize as a 501c3?  To answer that question we can turn to what the IRS itself has to say.

Churches Need Not Apply
In order to be considered for tax-exempt status by the IRS, an organization must fill out and submit IRS Form 1023 and 1024.  However, note what the IRS says regarding churches and church ministries, in Publication 557 

Some organizations are not required to file Form 1023.  These include:

Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men’s or women’s organization, religious school, mission society, or youth group.  These organizations are exempt automatically if they meet the requirements of section 501(c)(3).

Churches are “Automatically Tax-Exempt”
According to IRS Code 508(c)(1)(A):

Special rules with respect to section 501c3 organizations.
(a)  New organizations must notify secretary that they are applying for recognition of section 501c3 status.
(c) Exceptions

(1)  Mandatory exceptions.  Subsections (a) and (b) shall not apply to –

(A) churches, their integrated auxiliaries, and conventions or associations of churches.

This is referred to as the “mandatory exception” rule.  Thus, we see from the IRS’ own publications, and the tax code, that it is completely unnecessary for any church to apply for tax-exempt status.  In the IRS’ own words, a church “is automatically tax-exempt.”

Churches Are Automatically Tax-Deductible
And what about tax-deductibility?  Doesn’t a church still need to become a 501c3 so that contributions to it can be taken as a tax deduction?  The answer is No!  According to IRS Publication 526:

Organizations That Qualify To Receive Deductible Contributions:

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.

In the IRS’ own words a church “is automatically tax-deductible.”

Churches Have a Mandatory Exception To Filling Tax Returns
Not only is it completely unnecessary for any church to seek 501c3 status, to do so becomes a grant of jurisdiction to the IRS by any church that obtains that State favor.  In the words of Steve Nestor, IRS Senior Revenue Officer (ret):

“I am not the only IRS employee who’s wondered why churches go to the government and seek permission to be exempted from a tax they didn’t owe to begin with, and to seek a tax deductible status that they’ve always had anyway.  Many of us have marveled at how church leaders want to be regulated and controlled by an agency of government that most Americans have prayed would just get out of their lives.  Churches are in an amazingly unique position, but they don’t seem to know or appreciate the implications of what it would mean to be free of government control.”  From the Forward of In Caesar’s Grip, by Peter Kershaw

501c3 Problems
In Bob Jones University v. United States (461 U.S. 574), the U.S. Supreme Court noted the following about the government’s intended purpose for the 501c3:

The Court asserts that an exempt organization (one that has become a 501c3) must “demonstrably serve and be in harmony with the public interest,” must have a purpose that comports with “the common community conscience,” and must not act in a manner “affirmatively at odds with the declared position of the whole Government.”  Taken together, these passages suggest that the primary function of a tax-exempt organization is to act on behalf of the Government in carrying out governmentally approved policies.

When a church accepts the 501c3 status, that church:

·      Waives its freedom of speech
·      Waives its freedom of religion
·      Waives its right to influence legislators and the legislation they craft.
·      Waives its constitutionally guaranteed rights.
·      Is no longer free to speak to the vital issues of the day.
·      Becomes controlled by a spirit of fear that if it doesn’t toe the line with the IRS it will lose its tax-exempt status.
·      Basically, becomes a State-Church.

One need not look far to see that the church’s acceptance of the 501c3, and its significant restrictions, has had devastating consequences to not only the church, but to the entire nation. The church in America today is, by and large, not speaking to the vital issues of the day.  The church has been effectively silenced.  The inevitable result is a moral downward spiral in the culture as the church stands mute." End of quote from Lorraine Day.

Interested in starting a non-501(c)3 church?

We have had many people ask us how to start a non-501(c)3 church. As performing this role is outside the parameters of our stated purposes (LINK) and we are not qualified to offer any legal advice, we would like to steer you towards an I.R.S publication that we found useful on the way.

Tax Guide for Churches and Religious Organizations:  
www.irs.gov/pub/irs-pdf/p1828.pdf

The Full Circle Family Church is going to court June 2, 2015 to file for an exemption from paying Property Taxes. To read more about it and find how you can support us in this landmark case, CLICK HERE.

Ever wonder how we'll ever get out of this crazy mess we're in: rampant consumerism devouring the planet, with no end in sight; ever-widening the gap between the "haves" and the "have-nots"?

Enjoy this 4-minute video by Bruce Lipton that describes the metamorphosis of the caterpillar into a butterfly and how it provides a hopeful metaphor for the current stage of our society.