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Why 501(c)(3) is Not A Valid Excuse

Published with permission from Robert E. West, retired attorney of 44 years.







 FACTS:   A few Church leaders  in Colorado report they are hesitant  to support the pro-life citizen's initiative  Petition being circulated now to get the issue on the  November 2024 Election because they think doing so might  jeopardize their Church's  IRS 501(c)(3) "tax free" status. Some Pastors and leaders say, "I will not allow the petition on my Church property!" A few are even failing to preach God's Word about terminating the lives of pre-born  children.   They are failing to educate their  members about the pro-life Petition.

  As a result many Christians in Colorado are unaware of pro-life current events.  These Christian church goers do not even know about the  Petition being circulated  or have access to the Petition.    
1.)   What is an IRS 501(c)(3)?

2.)   How can a Church lose its 501(c)(3) status?

3.)   Is it likely a Church would lose its tax status by allowing the petition to be signed on Church property or by the Pastor announcing the Petition from the pulpit?
1.  What is " the 501(c)(3)" ?

    Certain organizations such as lodges, charities,  and churches can qualify with the IRS for this  "tax exempt status."  It allows the church to collect donations that are tax deductible to the contributor,  allows the  church to be exempt from paying federal income taxes,  and  allows  other local tax exemptions and benefits.  Churches operating under this section of the IRS Code obviously need to consider it a  serious matter. We all know the IRS Code is lengthy,  complicated, and confusing so the words  "501(c)(3)"  strikes fear into the hearts of men.
2.  How can a Church lose its 501(c)(3) status?

     A Church must comply with the IRS rules or it can lose its 501(c)(3) status and most pastors are not certified tax accountants or tax attorneys so they  operate  out of fear and an abundance of caution.  They take no chances.  These  words are often mumbled with a deeply serious face before worship, 
         "Sorry, we can't do it.....  you know...501(c)(3)! "  
This  is seldom questioned by church goers.

     Relax.  The rules for how  a church can lose that status are  fairly straightforward.   See the IRS  Publication 557- Rev. January 2023, "Tax-Exempt  Status for Your Organization ,  Cat. No.  46573C 

 This is a  very  simplified summary.
You MAY lose 501(c)(3] doing the following-- A.   THE CHURCH  BENEFITS  AN INSIDER -The church activities should not "serve the private interests, or private benefit,  of any individual or organization  more than insubstantially." If the church functions mainly to benefit a member, or insiders group, or a pastor it can lose its tax free exemption. 


-This can never apply to a Christian church educating members about  saving the lives of pre-born  children  or signing  a pro-life petition  on church property.  


B.    THE   CHURCH ENGAGES IN SUBSTANTIAL CONTACTING OF LEGISLATORS OR LOBBYING -     While a 501(c)(3)  Church is allowed to do some lobbying to support "legislation of interest,"   too much lobbying can hurt its status.  Its lobbying activities cannot be more than "an insubstantial part of its overall activities."   

 -This does not apply to your church unless it tosses out its substantial activities  like Worship,  Sunday School, Bible Study, etc. and mainly focuses on  lobbying activities and influencing legislation.  If your membership frequently boards busses to Denver to take Legislators  out to lunch and the primary purpose of your church  is to influence Legislation then maybe your groups should reconsider becoming a church again.


C.  IF THE CHURCH IS A POLITICAL ORGANIZATION  -     All 501(c)(3) organizations are supposedly prohibited  from participating in  campaigns on behalf of,  or in opposition to,  any candidate running for public office.  The prohibition supposedly applies to all campaigns at the federal, state, and local levels.    

          The "Johnson Amendment," passed in 1954 by then Senator 

 Lyndon Johnson, prohibits  501s from "endorsing or opposing

 Political candidates..."    Will this prevent your church from protecting 


        -   No  From 44 years of practicing law in Colorado I am unaware of any 501(c))(3) revocations when the church's  "substantial activities" were following Jesus Christ,  worshipping  Him,  prayer, educating members about Jesus and God's Word.  

          Churches  often allow an occasional politician to come to church           

  to speak to the  members.  In fact,  across America  churches invite various politicians to speak on the "National Day of Prayer" or on "Freedom Sunday."    President Obama is a frequent guest at churches speaking on political subjects important to him;  the current  President Biden frequently is televised speaking at Black churches.  Some   pastors challenge  the  IRS "to come listen in and  take our tax exempt status!"

           Saving unborn babies is not a political issue.  It is a moral issue.

The Christian and Jewish faiths are extremely clear on the subject of murder. Your church should  not become an arm of a political party or home base for a politician.   But your church has the absolute right to stand up and speak  out on specific moral issues consistent with your faith.

          Undersigned conferred with other attorneys across Colorado, including Donald J. Banner in Pueblo, Colorado,  whose  practice has  included church law for over 45 years.   Between the two of us we have practiced over 100 years combined and set up hundreds of 501(c)(3)s  churches;  we do not know of a single case  of a church in Colorado ever  "losing its 501(c)(3) status..." for preaching and supporting issues pertinent to the Christian Faith.

          In Mr. Banner's words, "No, not at all,  the 501(c)(3) absolutely  does not apply to this pro-life petition." 

          There is no question that a pastor preaching God's Word about 

  terminating the lives of  Millions of pre-born  babies in Colorado  would not  "lose that church's  501(c)(3) tax status."    Nor would supporting a pro-life petition in the church do so. 

D.  UNRELATED  BUSINESS INCOME -     Earning too much  income generates from unrelated activities can jeopardize tax exempt status.    The disqualifying income is generated from a regularly conducted activity, trade, or business that is not substantially related to the church's  exempt  purpose.

          Not applicable.

E.  ANNUAL REPORTING OBLIGATION(S)  -     Not applicable .


         CONCLUSION:    A Christian church is well within the "issues pertinent to its religion" to preach about pro-life.  A Christian church  may support ending the current Colorado law that allows for the termination of the life of pre-born children at any time.

A  church may have the petition available on church property for a limited reasonable period of time  and announce the petition from the pulpit.

        DISCLAIMER:  After over 44 years of practice I have retired my license.  The  Colorado Supreme Court Office of Attorney Regulation can confirm that I have never had a grievance, complaint, or malpractice in all those years.  However,  my opinions herein are merely those of an unlicensed Colorado  citizen offered in the hope of helping other Christians.   You should  refer your concerns to your attorney, accountant, and the IRS Code.   Be blessed. Fear not.  Trust Him! 

      Respectfully Submitted,

        Robert E. West

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