Your Church SHOULD be about your Spirituality, your Connection to Goddess, and NOT about thing's of Man, of "this world".

"When a church incorporates and applies for 501(c)(3) status, critics say, it invites government scrutiny into church finances, activities, and membership. “It lets the government into the church,” Kershaw said, “and gives the IRS access to all kinds of files.”

Why, then, do so many churches incorporate? Kershaw estimates that only 10% of America’s churches are “free” or unincorporated — a figure which is skewed, he added, because the state constitutions of Virginia and West Virginia do not allow churches to incorporate. (Since 2002, it has been legal for a church to Incorporate in Virginia.)

“The greatest benefit that being a 501(c)(3) organization brings to your church is the assurance to all your donors that their tithes, offerings, and gifts are fully tax deductible,” says a brochure for a book, How to Make Your Church a 501(c)(3) (www.startchurch.com).

Although this is true, Owens said, it’s not necessary for a church to have 501(c)(3) status in order for donations, tithes, or gifts to be tax deductible.

“It’s desirable because 501(c)(3) status helps major donors — especially in planning their estates, when they want to leave a major gift to the church in their wills,” he said. “Mostly it’s just a matter of extra reassurance.”

Many accountants and attorneys advise churches to incorporate and then seek 501(c)(3) status, Kershaw said. Churches also do it out of ignorance (“We didn’t know any better”) and because of a “bandwagon effect” (“Everybody is doing it”), he said.

In a radio interview, Kershaw said mainline churches didn’t begin to incorporate until early in the 20th century. The Methodist Church was the first denomination to do so, he said, on the advice of steel magnate and philanthropist Andrew Carnegie, who stressed the “efficiency benefits” of organizing the denomination like a business. Most of the major denominations followed suit shortly afterward, Kershaw said.

“The biggest reason not to do it is because it displeases the Lord,” he said. “It makes the church subordinate to the state, and that’s bad theology. Jesus Christ, not the state, is the head of the church.”

Chalcedon’s founder, R.J. Rushdoony, addressed this issue in Christianity and the State, pp. 116–119 (Ross House Books, Vallecito, CA: 1986). “[W]hat we know as a corporation is a Biblical doctrine,” he said, with “Israel” as the original corporation created by God, later supplanted by the church as the “new Israel.”

The early church, he said, was a corporation or “body” headed by Jesus Christ, an eternal and supernatural corporation. Later in history, European states co-opted the Biblical concept of the corporation and applied it to themselves in imitation of the church. By modern times, states like Frederick the Great’s Prussia were promoting religious toleration as a means of yoking religion to the service of the state. “The function of religion had returned to the pre-Christian Roman function, to provide social cement and support the state” (p. 119).

“In the United States,” he wrote, “the Internal Revenue Service began to grant or deny corporate status to churches. This status was given upon sufferance of the state and subject to its conditions. The church as a corporation now had only a limited existence, one conditional upon the grant and terms of the state. Limitations began to appear as to the extent of the property which could be held tax-exempt … The modern state has thus made of itself a new Christ and church” (p. 119).

Since the Middle Ages, there have been many changes in the relationship between church and state. Today in America, church construction is subject to local zoning laws, and parking regulations are sometimes invoked by municipalities when neighbors complain about believers meeting at a private home for worship or Bible study. All of these situations are subject to change, as local ordinances are debated and lawsuits are filed.

IRS: Churches Exempt from Tax

Several IRS publications are available from the agency (phone 1-800-TAX-FORM or www.irs.org) that state that churches are automatically tax-exempt, even without 501(c)(3) status.

Package 1023, Application for Recognition of Exemption, lists churches, church auxiliaries, religious schools, mission societies, and youth groups as automatically exempt.

Package 990, Return of Organization Exempt From Income Tax, p. 3, Section B of instruction booklet, includes churches, church-affiliated organizations, church schools, and mission societies on its tax-exempt list.

Publication 557, Tax-Exempt Status for Your Organization, p. 17.

Publication 1828, Tax Guide for Churches and Religious Organizations, p. 3, reiterates the tax-exempt status of churches, their auxiliaries, and associations of churches.

Conclusion

Although many church officials and members think a church must be 501(c)(3) to be exempt from taxation, this status is not necessary for a church to carry out any of its functions. There are also theological objections to it, as stated by Rushdoony and others.

The lack of a 501(c)(3) designation does not exempt a church from any legal prohibitions against “politicking,” but not being 501(c)(3) would make any politically motivated investigation of a church more difficult. (The IRS, then, would have to examine church members’ individual tax returns, financial statements, etc.)

A church’s right to speak out on controversial issues, which may cross the line into prohibited political activity, is protected by the First Amendment. No church has ever lost its tax-exempt status as a result of “political speech” by the pastor. Any survey of the national news will turn up many stories of churches and clergy speaking out.

How strictly can the IRS interpret the federal laws against a church “intervening in a political campaign”?

Marcus Owens, defending a church against just such a charge by the IRS, said he has not heard from the IRS since he sent the agency a letter in October rejecting the IRS’ contention that a sermon opposing tax cuts and the war in Iraq constituted “intervention.” “They’ve been quiet,” he said. “Perhaps they’re considering their position.”

It’s true that obtaining 501(c)(3) status unnecessarily gives the government a foot in the door of the church. It’s also true that incorporating a church simply isn’t necessary: churches in Virginia and West Virginia prosper without it.

Given the acknowledged potency of “the Christian vote” in recent elections, it’s doubtful that the IRS would find it politically prudent or practical to launch a campaign to muzzle America’s churches. If nothing else, it would touch off a political firestorm that would consume the IRS commissioner.
Meanwhile, church members and their legal representatives have the right to campaign for changes in the laws and IRS regulations, and lobby for greater independence for the church, not less."

Source
http://chalcedon.edu/research/articles/do-churches-need-501c3-status/