State Churches through Incorporation and Taxation Dr. Greg J. Dixon


From whence deriveth the church her authority? IRS 501(c)(3) or Matthew 28:18

A part of the following was given by Dr. Greg J. Dixon as testimony before the Senate Finance  Committee in Washington, D.C. in 1983. The chairman was Senator Robert A. Dole (R) of Kansas.  Even though Ronald Reagan had been swept into office along with a large number of Republican Senators and Representatives that allowed the Republicans to control both houses of Congress for the first time in many decades it obviously meant nothing to the insiders who had only used the Christian Right to get elected because their agenda was still being implemented.  This legislation that was at issue here would eventually make the churches as well as all non profit organizations for the first time in the history of America responsible for the collection and payment of Social Security taxes on those who served in their ministries with the exception of those who serve churches who are licensed, commissioned or ordained and do sacerdotal duties. It should be noted that this definition does not include New Testament churches including Baptists and other non-conformist churches because sacerdotal refers to churches that believe that the ordinances such as baptism and communion are sacraments (saving elements) rather than ceremonial (in memoriam) of Christ’s) death.

Senator Dole asked Dr. Dixon to serve on a committee to see if a compromise could be found that would satisfy the unregistered church pastors and to meet back in Washington at a later date to give a report.  In a few weeks, Pastors, Robert McCurry, Everett Sileven Ramsey, Greg Dixon and a few others of the unregistered church leaders met along with many other Fundamental and Evangelical church, denomination and ministry leaders at the Senate office building appointed to give their report. A Dole aide named Carolyn walked into the room and said, “Gentlemen, what have you come to Washington to give us”.  There was total silence.  Then Bro. Dixon stood and said, “Carolyn, we’ve not come to Washington to give you anything because the church of the Lord Jesus Christ doesn’t belong to us it belongs to Him who purchased it with His own precious blood on the cross of Calvary.”  At that moment, almost instantaneously with one loud crescendo the entire other side of the room erupted with one voice, “He’s not talking for us, he’s not talking for us.”  Obviously he wasn’t, because Attorney David Gibbs, Jr. of the Christian Law Association, according to his own testimony, and some other attorneys had worked feverishly behind the scenes and hammered out the plan that a church could have a one time opt out opportunity. But there are two problems with this.  The law can be changed in the future and filing for the exemption is licensure plain and simple which is license not liberty under the First Amendment and simply put, an Act of Toleration which is a violation of the fundamental law of the land, the First Amendment.   In other words it’s giving to Caesar His “pinch of incense” and causing the churches to deny that Jesus is Lord. The following is what Dr. Dixon said before the committee.

Make no mistake about it: “D” day for churches of America is January 1, 1984. Maybe Orwell had the right date after all. On this date, every church in America must register and pay taxes to the Federal Government. Please remember that this has never happened since the founding of our nation more than two hundred years ago.

Starting January 1, 1984, all churches and schools, which are exempt from federal income tax under section 501(c)(3) of the internal Revenue Code, will be required to pay FICA (Federal Insurance Contributions Act) taxes for each employee who is paid $100.00 or more in a calendar year.

Be assured, regardless of what it is called, this is a tax. President Franklin D. Roosevelt said that it was a tax when it was presented to Congress originally in 1934. Congress admitted that it was a tax when it was passed. The Supreme Court since has declared it to be a tax, and two of the most well known constitutional attorneys of our times in the area of religious liberty have said that this is a tax. David Gibbs has said it over and over again on the Accelerated Christian Education fall tour. Mr. William Ball has said essentially the same thing in a memorandum from his office.

Mr. Ball says,

“The principle involved is plainly a tax on religion. Churches and religious schools are not afforded an option to pay, or not to pay, for an insurance program for their employees. The relatively small size of the tax is irrelevant (though to some the burden may be substantial). If religion may be taxed a little, why not greatly? The tax imposes obligations upon religious bodies in respect to the use and management of their own resources and with respect to the personnel of their ministries.”

This position paper should not be interpreted as advising anyone as to what he should do in regard to this tax. This paper is for the purpose of clarifying the issues and suggesting some alternatives. It also explains what some churches are doing in regard to this problem.

To get a proper perspective, let us review the social security issue. Mr. Ball writes:

“In January, 1984, non-profit organizations, including churches and Christian schools, will be swept into social security. Early this year (1983), Congress passed HR1900 which was heralded as the 75-year cure of the nation’s sagging social security program. President Reagan has signed the bill into law. Beginning January 1, Christian schools will be required to withhold 6.7% from each employee’s salary for social security payments. The Christian school and/or church will, in addition, pay 7% of each employee’s salary to social security as well. Understandably, this will have a significant financial impact on many Christian schools that have not participated in the government’s social security program.”

Of course, many churches would have to borrow money to pay these taxes since most of them do not have it in their budget.

Originally when this issue arose in Congress in 1934, the legislators suggested that it be voluntary for everyone. President Roosevelt said, “No!” In fact, he said that it was to be an involuntary coercive tax. Many of the old line churches asked to be included. Congress was very emphatic. They said, “No, we can’t tax God.” So they didn’t.

In 1951, however, Congress decided that God could be taxed voluntarily. Many churches since then have “opted in” and some who did participate have opted out, and many never were included. Now in 1984, fifty years later, Congress has decided that God can be taxed involuntarily.

Make no mistake about it, the penalties are unbelievably stiff. The pastor or responsible officer could receive a five-year prison term or a $10,000 fine or both, and this is just on one count.

According to Dr. David Gibbs, esq., there are three principles involved in this matter of taxation. First, the power to tax is the power to control. Secondly, this tax (FICA) is the means by which government provided benefits (subsidy or welfare) and thirdly, a tax is a test of sovereignty.

One state cannot tax another because each is sovereign. God is sovereign; He cannot be taxed.

Many pastors are asking if a church has the scriptural right to refuse to pay taxes? This issue strikes at the very core of the separation of church and State. What can join the church and State more than coercive taxes?

The principle of this division is found in the dawn of history as it is recorded in Genesis chapter 14. Abram paid tithes of all to Melchizedek, King of Salem, and refused the spoils he was offered (though legally) from the King of Sodom.

It is clear that it was the result of a solemn oath that Abram had made to God.

“Abram said to the King of Sodom, I have lift up mine hand unto the Lord, the most high God, the possessor of heaven and earth, that I will not take anything that is thine, lest thou shouldst say, I have made Abram rich.” Genesis 14:23,23

Maybe the church of the Lord Jesus Christ should restate this vow again.

The church is not to finance the government, neither is the government to finance the church. A State-financed church is a State controlled church. The pulpit must ever be free to cry out against the king. Nathan said to King David, “Thou art the man” (2 Samuel 12:7). Later, as religious freedom began to die in Israel, prophets were imprisoned or killed for such boldness.

We also see that the Levites were not taxed or conscripted for military purpose (Numbers 1:45-54; Number 18. Note especially verse 24). The tithe was to go to the Levites (Deuteronomy 14:27-29; Joshua 21).

However, I think Ezra 7:24 is as clear as crystal.

“Also we certify you, that touching any of the priests and Levites, singers, porters, Nethinims, or ministers of this house of God, it shall not be lawful to impose toll, tribute, or custom upon them.”

The New Testament is equally clear in Matthew 28:18-20 and Ephesians 5:21-33. Let’s look at some principles in these verses.

  1. The Lord Jesus Christ is the sole authority over the church (Matthew 26:18)
  2. The church is under orders from Him alone to disciple, baptize, and teach all things that He has commanded them. (vs. 19,20)
  3. If the church will do this, then He promises to be with her to the end (vs. 20)
  4. Paul compares the special relationship of Christ and His church to a man and his wife. What can be closer (Ephesians 5:21-33)?
  5. Christ is the Savior of our body (the church), not the State (vs. 23).
  6. The church is subject unto Christ, not the State (vs.24).
  7. Christ purchased the church with His own blood (vs. 25). The State can give nothing for the church and should give nothing to the church.
  8. The Lord nourishes and cherishes the church. Through the centuries, the State has tried to destroy the church.
  9. The church is a living organism with a living head and body. Therefore the church is not a religious organization. It is possible to be a religious or charitable organization without being a church.
  10. The church is to be joined unto Christ (vs. 31). The Lord Jesus uses the word cleave in Matthew 19:5.
  11. Admittedly, this is a great mystery (vs 32), and in this post-Christian era, it should not surprise us if a world who hated our Lord Jesus Christ should also hate His church (John 16:18-21).

The following is taken from Baptists and the American Tradition by Robert C Newman, Regular Baptist Press, Des Plaines, Illinois.

“Pressures upon the New England Bible commonwealth forced gradual changes in their peculiar form of church-State union. Civil magistrates continued to enforce both tables of the law, which meant the regulations of the religious as well as the civil life of the populace. The magistrates were considered the ‘nursing fathers to the church,’ and as such, they could pass and enforce legislation for tax support of Congregationalism. They could not alter the church’s beliefs and worship, a hated memory of the old days in England. But taxation for church support and the trial of heretics were within their domain. Not until 1728 did Puritan New England exempt Baptists, Anglicans and Quakers from taxation for support of the Standing Order.” Page 24, paragraph 1.

“Being a strong Baptist and an independent, he (Isaac Backus) took care to ascertain beforehand whether or not the Association would wield any control over his local congregation.” Page 33, paragraph 3.

“Religious taxation was the main issue. Backus was the alert leader in this long controversy. He resorted to newspaper attacks against the proposed Constitution for its failure to eliminate taxation to support congregationalism.  He was also opposed to tax exemption for the Baptists.

“Backus was a man of principle. He did not simply contest tax support for the established church, but tax support of any religious body.” Page 32, paragraphs 1 and 2.

In the pamphlet, [Backus] describes punishments, imprisonments and other assorted persecutions directed at various Separates and Separate-Baptists on the part of the New England oligarchy.” Page 36, paragraph 2.

“In 1783 [Backus] wrote A Door Opened for Christian Liberty. In it, he related the persecution of Richard Lee.” Page 36, paragraph 3.

“. . . [Backus] argues that the Head of the Church is Christ and, since there is no earthly head, then to impose one is unbiblical. . . since the above is true, then a government should not govern in religious affairs . . . [Backus] maintained that the ‘end of civil government is the good of the governed.’ Page 37, paragraph 1.

“The established clergy held sole right to perform marriages and bury the dead . . . Thus, while Anglican ministers were State supported, they were also State regulated. Beginning in 1662 and continuing for nearly a century afterward, Virginia’s General Assembly required ministers to present evidence of ordination by an English bishop.” Page 40, paragraph 2.

“The Baptists were the first to enter the war for religious liberty in Virginia.” Page 42, last paragraph.

“[The New Light Baptists] were often without formal training and always without government sanction. . . Between 1768 and 1776, the colony imprisoned more than forty Baptist preachers. This was relatively easy since they had no State certification.” Page 42, paragraph 3.

“In the Fundamentalist vs. Modernist controversy in the 1920’s, the issue was “Who is Jesus?” The controversy today is “What is the Church?”

The true church of the Lord Jesus Christ should not be surprised if one of its greatest antagonists in this struggle is the interdenominationalists and para-church organizations. They believe in a universal, invisible church while the Bible teaches that His assembly is local and visible.

Who can deny that after January 1, 1984 every church in America will be required to become a State church? According to Dr. Robert McCurry in the August 14, 1983 issue of The Temple Times,

“A State church is a church that is recognized by the State, serves the State, provides revenue for the State, and serves a public purpose that is not contrary to established public policy. This is exactly what was decreed for churches of America.

Churches will be registered with the State by tax-identification numbers.  Churches will be producers of revenue for the State by paying taxes ‘to assure the solvency of the Social Security Trust Funds.’ Taxable organizations are answerable to the government – open to the inspection and dictates of the government.

Churches will be agents of the State by confiscating and remitting to the State taxes that the State has ordered the church to confiscate from the remuneration of church employees.

Churches will be servants of the State by keeping records for and remitting records to the State.

Of course, this is just the beginning. The full impact of what will be imposed on the churches is yet to be seen. Once a state church has been decreed, the door is open to an endless number of impositions.”

A Christian attorney in Indianapolis has compiled a list of forty-one different areas of conflict between the church and State today. (Ed. These are listed on page ? in The Trail of Blood Revisited and is available through The Trumpet). No wonder over 8,000 Christians and churches are currently on trial in America.

In a recent court trial, a pastor was asked by a prosecutor if his church used toilet paper. When the obvious had been established, the State tried to enforce interstate commerce laws against the church when it was showed that they had brought the paper over State lines.

Dr. McCurry also relates the following in the December 12, 1982 issue of The Temple Times:

“Several years before his death in 1976, which would be the early 70’s, and long before there emerged the type of persecution of the church and its ministries in America by the government as is now so visible, Baptist evangelist B.B. Caldwell made the following prediction in a sermon entitled, ‘Seven World-Shaking Events Soon to Come to Pass.’

“I predict that the final oppression of Christianity will start with taxation. . . there will be universal taxation. This will start with a series of independent churches and missionary associations, thereby casting a shadow upon their integrity and raising doubts in the minds of their contributors as to the validity of their ministry.

“The government will haul ministers of the Gospel into court on alleged tax irregularities and challenge ministerial authority of independent ministers of the Gospel. The government will get rid of independent ministers, churches, and associations, and a State church will be set up.”

Notice in this amazing prediction the connection between taxation and a State church. The danger of such a State church may be more real because many preachers and laymen in the United States either do not know what a State church is, or do not care. Christian Law Association attorney David Gibbs stated that there is probably a widespread feeling that State church implies uniformed guards conducting the church services. And because that seems so unlikely, the fear of a State church is often minimized.

The Congress amended HR 1900 to exempt churches who were not paying FICA taxes at the time. However, they would have to file Form 8274 with the Federal Government. Thousands of churches did so. However, because to file Form 8274 would be an admission of jurisdiction (Lordship) of the State over the church, the unregistered churches refused to file the form. The Indianapolis Baptist Temple was one of those who did not.  Exactly eighteen years later because of that decision federal marshals seized the church property and turned it over to a receiver and it was sold to the Cristel House Foundation and they established a Charter School called Christel House Academy on the property. Please see article Toleration Act is license not liberty on page ? of this issue of The Trumpet.


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