Everett Ramsey DD
God's Covenant Nations | God's Covenant People
The Christian Culture Mandate

Unincorporate Your Church - With Care
Churches to Blame for IRS Involvement

By: Dr. Everett Ramsey


Why do I feel qualified to speak on this issue? I received firsthand knowledge on the subject from the judge who was holding me & my deacons in jail on contempt 1983.

In 1979, I was pastor of the Faith Baptist Church in Louisville, Nebraska. The church voted to start and run a Christian School for the families who belonged to and attended the church. The State moved immediately to close down the school for reasons not germane to this subject. On several occasions, I, my deacons and fathers of the children were jailed for refusing to close the school.

The State had brought suit against the church corporation and its officers. The officers and members of the church felt we had a Biblical call and mandate to rear our children out of any humanistic school indoctrination, which all state schools by law had to perform.

During my third incarceration, the Judge, who was a Catholic and was sympathetic to our position had the sheriff to take me up to his chambers one evening about 10PM. After dismissing the Sheriff and closing the door, the judge asked me to join him on our knees in prayer. Immediately after raising from prayer the Judge asked me about our options to close or move. I refused them all for Biblical reasons that are too extensive to detail here.

He then asked me to look at the filing documents presented by the State. He asked me to read the parties involved.

I began reading:

The State of Nebraska, ex re el Paul Douglas (Attorney general)


Faith Baptist Church, a Nebraska Corporation.

He then stopped me and asked,

“Is this a heavenly corporation?”

I answered,


He asked me,

"Is this an angelic corporation?”

Again, I answered,


He said,

“You are correct, this is a Nebraska corporation, formed in this state by this state. The corporation is the owner of the property and the trustees hold the property in trust for the State. You agreed in your incorporation papers not to violate any law on the books by and for the State of Nebraska. Your corporation does not have any constitutional rights only rights enumerated in the statutes. Therefore, the Supreme Court of the State has ordered me to bulldoze the buildings as a public nuisance. I don’t want to do that.”

I then stated that if and when I was released, I would unincorporate the church and file said unincorporation in the court. This we did. When the Supreme Court refused to release us from the order, the judge resigned the case. He saw the political pressure the State wanted, but he didn’t. However, the case was soon resolved by a change in the law to free home schools and church schools.


I joined forces with Dr. Robert McCurry from Atlanta and Dr. Greg Dixon of Indianapolis to form the ACUC (American Coalition of Unregistered Churches). The mission of this organization would be to educate pastors and churches as to the controlling limits put on churches who incorporate and obtain IRS 501(c)(3) tax exempt status.

From 1984 until this day, we have spent our lives trying to get churches to see the error of their ways with incorporation and 501(c)(3) IRS tax exemptions, especially since the IRS makes it clear that neither are required by law in order to fulfill all the Biblical duties and requirements of a Biblical church.

Today's Church Fight

I am sorry to say that churches did not listen in 1984 up until recent days. However, with the election of Barack Obama in 2008, pastors realized for the first time that our own government was a real threat to churches who want to preach the whole counsel of God. With his re-election they now see that even the people will not stand up for the protection of the true churches of Jesus Christ.

Unfortunately, now, some churches want to exercise their political power and realize they can’t. So they are taking unscriptural positions of preaching and teaching on moral subjects the government have claimed for public police and even suggesting candidates that should be elected, then sending audio and video of their action to the IRS and daring the IRS to start enforcement processes against them.

The argument of the churches is that their constitutional rights predate the IRS and its rules and 501(c)(3).

This argument will not hold up, because the rights of the individual are constitutionally protected, but corporations are not constitutionally protected individuals.

Some attorneys try to justify incorporation by stating that while the corporation is not protected, the corporate body of the church under Jesus Christ is protected.

The problem with this argument is that the corporation owns and controls all the assets of the church including funds, buildings, equipment, grounds, etc. If you are not using the assets of the church for the ministry of the church, you should not have them in the first place. If you are using them, then the corporation is forbidden to let you use them for anything the State sees as forbidden such as running an unlicensed school, teaching against homosexuality, abortion, birth control, interracial marriage or any other area the government determines it want s to take as public policy. There are many court cases that well establish this stand. We will be discussing them as we proceed.

The purpose of this book is to show the historical change in theology that has brought us to this point and the theological changes that will be necessary to save any church that wants to remain a Biblical church with God’s protection and blessing.

The History of Church Incorporation

No churches were incorporated before the Civil War and even as late as the 1880s. The first church to incorporate was a religious organization in 1888.

In fact, the State of Virginia and West Virginia had laws on the books up until the 1980s that prevented any church from incorporating. We can thank Jerry Falwell for tearing down those statutes.

Change in Church Doctrine

The greatest reason for the change from unincorporated churches to incorporated churches was due to the change in Theology.

America was formed as a Christian/Biblical Law based Republic. The civil war changed our government by destroying the Republic and giving us a Democracy. Following the civil war the fight over freedom and equality for all races has been ongoing and fierce. This has bled over into the churches because the churches have failed in their Biblical mandate to be the conscience and the border or wall of resistance to evil.

As our country has been forced to accept unbiblical Democratic means of government in the civil arena, we have likewise been led by deceivers to accept democracy in the church which has destroyed the Theocracy under God and His appointed and called Bishops, Pastors, Elders and teachers.

God called Bishops, Elders and Pastors and gave them as gifts to the church. He then held them accountable to Himself for their actions and obedience in their duties. Heb.13:17

The process was simple. God called a man, he went to an area that he felt called of God to start a church, rented or built a building and started holding meetings. Preachers did not come and go because they got fired by the members, members came and went because they were fired or fried by the Word of God.

When the church changed to a democracy, the preacher became a hireling of the people. Most true preachers today are not in the pulpits but are working from underground locations through the internet and the printed and audio means.

Also A Change in Law

When God called a man and he started a work, he was the sole responsible party for all things. He may lessen his liability by appointing Elders who shared his vision, but he was the one where the bucked stopped.

However, when people started electing pastors and firing them, voting on policy and other matters, the liability shifted from the Pastor to the People.

This is why lawyers dragged the churches into incorporation. This was to limit the liability of the members as well as leaders. The people liked the authority, but they did not want the liability. Too bad, liability goes with responsibility. Then came the insurance companies who offered a new policy to cover the liability. We now have a people and leaders who have all the authority, but can’t be held accountable for the liabilities.

The Tax Problem

Next came the problem of the corporation as a taxable entity.

Therefore, church corporations became liable for all the corporate taxes that could be imposed by the State on corporations. This is when the people pressured their elected government officials to create a new corporate category called “Not for profit corporations.”

Churches had now given up their right as non-taxable entities for the privilege of seeking government approval to not be taxed, called tax exemption.

Most people went along with this because the churches still controlled the populace and the populace was generally Christian and they elected Christian officials.

The Greatest Change

In the 1930s under FDR, the immigration quotas for America were reversed. Up until this time, the immigration quotas were 90% Anglo, white, European Christians and 10% from non-Christian countries and races.

FDR changed it to 10% Christian and 90% non-Christian. As the population of the non-white Christians began to grow, the pressure for civil rights was further pushed onto the public and governmental arena.

Government taxes and spending policies became a means for changing policy in America instead of paying for constitutionally approved government.

As these policies changed and grew to include positions previously the sole jurisdiction of the church, the IRS via Congress began to limit the power of the churches to deal with these areas, especially, if the churches opposed the government position.

Abortion, birth control, the feminist movement, interracial marriage, homosexual activity now became a government protected right no longer available for attack by the church if you wanted to be incorporated and have an approved IRS tax exempt number.

Churches would now become employers and collect the taxes for the government, make reports and actually become an arm of the government.

Churches Forgot

Churches forgot that they use to start churches, build churches, attack sin in government, preach against evil candidates and call down the wrath of God on all of the sins now accepted.

So now, we have a whole generation of preachers who do not know how to start a church or run a church without government oversight and control.

No wonder the church has lost its power and saltiness. It is useless to the world, to God and to the people.

Starting A Church

Just how do you start a church?

That depends on your definition and theology of a church. The Bible Definition is, “Where two or three are gathered in His name.” Also, God gave pastors, Bishops (overseers) and Elders to the church. This is where there is a lot of difficulty with modern day theology. Lawyers want you to form a corporation, get an employee ID number and 501(c)(3) from the IRS before you ever start anything. That is not a Biblical church.

The Biblical church was a natural assembly of those who had consensus of belief concerning God, Christ, the Bible and the mission of God and Adam.

In the early church, all ministries of the gifts and callings were carried out under the authority and oversight of the Bishops and Pastors who had responsibility and accountability for the souls of God’s people. Even the Apostles where commissioned and sent out by the church at some location.

No ministry was allowed to be a work outside that body and oversight. Today, many of the requests I get about starting an unincorporated church is not a church at all, but rather a ministry of a single gift or possibly two. One man wanted to start and ministry with church rights, but it was only a music group seeking to get into churches and make money.

Another woman wanted to start a ministry of puppeteering with a church tax status, but it was not a church. If God raises up a man or woman with spiritual gifts and calling within a church, it is the responsibility of that church to commission and send them out to minister under their church. If the church sees some flaw in the minister or ministry that is not scriptural, then the church has every right to refuse to commission and use that ministry of gifts.

But this is where people rebel against the church and go out on their own. This is why many ministries become incorporated with tax ID numbers and 501(c)(3) tax exemption. They want the tax deductions which become indirect government subsidy. That is why the government tries to control them. There is no free ride. You can be controlled by the Lord's church or the government.

To start a church, the called man of God should get a place; call together the saints and start teaching, preaching, praying and ministering with what gifts the members have. There is no need to get the government involved or to file papers of do anything. I recommend that churches keep good and proper records for themselves, but not for government.

If you incorporate, the government will have rights to the financial and all other records the church may keep.

How To Unincorporate a Church

This is much harder. The expert in this matter would be Dr. Greg Dixon who pastored a church of 3,000 and was a part of the Baptist Bible Fellowship. He spent years getting unincorporated, the church experienced many miracles of God, but the government took the property. (We will discuss that separately.)

The laws of unincorporation may vary some from State to State, but generally they are the same. I recommend that you keep attorneys out of it. I recommend that you go to your Secretary of State and get a copy of your corporate papers on files and the statutes that apply to your corporation for unincorporation.

Basic steps:

1. Board of Trustees must vote to unincorporate.

2. Board resolution to unincorporate must be announced for the statutory time limit before presenting it to the members for a vote.

3. The church members must vote to approve.

4. The pastor and Elders must organize a new Church, unincorporated)(helps to change the name) and sigh up charter members.

5. The trustees and the congregation must vote to transfer all assets and liabilities of the old corporation to the new church body.

a. The pastor or someone he designates must be designated to facilitate and sign each transaction.
b. The facilitator should not have authority pertaining to the transaction beyond the transaction. In other words, you don’t want the designated authority to have the power to transfer the property to the new church and then retain power to transfer it to himself or someone else after the first transfer.

6. If there are mortgages or debts, the pastor, elders and or other members will have to provide security for these loans and debts. The property may still be mortgaged, but every lender will require the signature of some or all the members. Remember, there is no corporation for the lender to hold accountable. Someone will have to be accountable.

7. Once the assets and liabilities have been transferred, you may proceed to file the documents of unincorporation with the Secretary of State.

8. Then you must file a death notice of the corporation with the IRS letting them know that the EID and 501(c)(3) corporation no longer exists and will not be filing reports any longer.

9. This takes you to the next sore spot and where Dr. Dixon was never able to get release. 10. If you continue to use the same name and continue to function as you did in the past, the IRS will not recognize the death of your corporation.


Most us us never stop to think about the legal terms and titles that are used in a church corporation today. Have you ever read anywhere in the Bible where "Trustees" were ever commissioned, called or appointed by the Lord in His Church?

I never had, but I still had trustees in my church. They were usually deacons or Elders, but I never thought about the term "Trustee" being a government office and position with the power of the State behind them until I heard about an Assembly of God Church in California that lost a court battle over the matter.

This church had a man playing the organ who also was an Elder or Deacon and also a Trustee of the corporation. It became known that the man was a practicing homosexual. The church immediately relieved him of all his positions including the office of Trustee.

The man sued the church for discrimination on the basis of sexual preference.

The court ruled that the church could relive him of all religious positions, but that a Trustee was not based on religion but on State Statutes and discrimination laws would apply. This homosexual had to be restored to the office of trustee leaving him to some degree in control of the assets of the church through the corporation.

In another case, in Florida, a baptist church had a split. In this split, two of the three Trustees wanted the pastor to leave. The pastor refused. The two Trustees met with the third Trustee and voted to take the property and assets away for the current church and pastor so they could start a new church. The court upheld the Trustees. The pastor and the remaining members were forced to vacate the building.

You can't have a corporation without Trustees.

Tax Exempt vs. Non-taxable

When the Colonies were founded in America, there were States with no State Church and there were States with a State Church. States with State Churches, such as Virginia where the Anglican Church was the State Church, the citizens of the State were taxed for the support of the church even if they were not Anglicans.

States with State Churches were the greatest havens of persecution of competing Christian sects. Therefore, eventually, all States granted churches their own jurisdictions. This meant that the State laws and courts stayed out of the churches' policies, funding, and discipline.

This eventually became the basis of the First Amendment to the national Constitution barring the Government from Church jurisdiction. The State kept only the Rom 13 jurisdiction of the sword. Even in such cases as the sword could be allowed, the churches maintained sanctuary FOR criminals until they were guaranteed safe passage and safe trial.

This church jurisdiction was very crucial to the church. This jurisdiction guaranteed three things; First, the State was recognizing the equal and/or superior jurisdictional authority of Jesus Christ over His Church. Second, the state could not tax the church and third, the church could tax its members for finances. Obviously, in most churches it is voluntary.

But this ecclesiastical jurisdiction guaranteed that the church was "Non-taxable," not "Tax-exempt." Tax exemption is a privilege granted by a higher authority. It simply means that the higher authority has the right to tax you, but they have done you a favor and granted you an exemption. Exemptions can be taken away at any time. Corporations are taxable and may receive tax exemption. But this destroys the equal sovereign jurisdiction of the Lord Jesus Christ.

Sermon Exemption

More important than being non taxable is being non-sermon controlling. Under 501(c)(3), the government can take any Bible truth, make it government policy and prevent you from dealing with it from the pulpit in a negative way.

We all remember the days before Roe vs Wade, the churches preached against killing of the unborn without fear. After Roe vs. Wade, aborticide became the law of the land and eventually the government made it public policy to promote aborticide even to the extent of infanticide.

The government is not granting any sermon exemptions.

Now, if you take an open public stand against aborticide as an incorporated church, you can loose your tax exemption, which includes confiscation of the corporations assets under certain circumstances.

The same is true now with race mixing and interracial marriage, homosexuality, the feminist movement (women's rights to rebel against their husbands), no fault divorce, state oversight of child rearing and many other areas that have traditionally bee the message of the church.

With current thought attributing godhood to our White House occupant, how long will it be before you can preach no other god but him. We are already restricted by the press and public opinion to preach the exclusivity of Jesus Christ as Saviour.

State Sales Tax

A note about State sales tax.You may have to pay it, but there is a way that has worked in many States. I will share my experience here in Missouri.

In 1990, when I moved back to Missouri, we continued the Faith Baptist Church and its Ministries. I wrote the Missouri Department of Revenue for an application for tax exemption. When I got the form, I looked it over. One of the blanks requires you to identify what structure your church uses. There are several choices: corporation, association, partnership, sole proprietor, and maybe a couple of others.

We were none of these. Remember, these are statutory definitions. If you fit a statutory definition of any kind, you can be taxed.

I wrote them back and said that we would have gladly filled out the form, but we did not fit any of the statutory definitions. We included the form and circled the options listed. We stated we were a New Testament Church of Jesus Christ that had met and functioned for over 18 years.

Special Note: If they try to force you into one of these statutory definitions, you have to insist that you cannot be so classified.

I am happy to report, that we received a letter from the Director and the Department Attorney stating that it was the intent of the State Legislature to not tax churches. They granted us immunity from the taxes and told us to give a copy of the letter to any merchant from which we purchased goods and they would be clear from violation.

I know several other States where this has been used and accepted.

Bank Accounts

One question that generally comes up is, "How do you open a Bank account?"

Banks require an IRS Employer ID Number. They don't have to do this. There is no law requiring them to do this, but they have chosen to do this.

So, the question becomes, how do you get around this requirement? Ask them how other non incorporated non profits such as little league teams, Boy Scouts hold accounts in their bank.

If this fails, you can open an account using one or more Social Security numbers of individuals who sign on the account. Make sure if you do this, you require two or more signatures on every check and keep good records for yourself and people. You don't want someone taking the funds.

Loans and Debt

Churches should have none. This is a theology problem. The main reason churches get incorporated is so they can borrow money, sell bonds and open loans at financial institutions. This is business, not Scriptural Church policy.

If you really want to borrow money to buy land or build a building, then the men of the church should be willing to go down and sign as guarantors for the loans. If they are not, then this should be a sign that borrowing money is the wrong way to go.

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