Mandatory Exception Status in IRS
or why do 501's file a return and a Corporation Sole are not required to do so...
TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter F > PART I > Sec. 501
We will go straight to the source of the taxing requirements, and see what they have to say about tax paying, filing, and record-keeping. I know of no better source.
(c) List of exempt organizations - The following organizations are referred to in subsection (a):
(1) Any corporation organized under Act of Congress which is an instrumentality of the United States but only if such corporation [abridged - see also: 28 USC 3002(15)(C)]
(2) Corporations organized for the exclusive purpose of holding title to property, collecting income there from, and turning over the entire amount thereof, less expenses, to an organization which itself is exempt under this section. Rules similar to the rules of subparagraph (G) of paragraph (25) shall apply for purposes of this paragraph.
(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.
TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter F > PART II > Sec. 508 Available Online Here
You see here that 501(c)(3) is for corporations, which are organized for benevolent purposes, NOT for churches.
(a) New organizations must notify Secretary that they are applying for recognition of section 501(c)(3) status Except as provided in subsection (c), an organization organized after October 9, 1969, shall not be treated as an organization described in section 501(c)(3) -
(b) [not cited]
(c) Exceptions
(1) Mandatory exceptions - Subsections (a) and (b) shall not apply to -
(A) churches, their integrated auxiliaries, and conventions or associations of churches, or
The difference between a 508(C)(1)(a) Exception and a 501(C)(3) Exemption is rather startling.
EXEMPT. To release, discharge, waive, relieve from liability. To relieve, excuse, or set free from a duty or service imposed upon the general class to which the individual exempted belongs; as to exempt from military service. To relieve certain classes of property from liability to sale on execution, or from taxation, or from bankruptcy or attachment.
EXCEPTION. Act of excepting or excluding from a number designated or from a description; that which is excepted or separated from others in a general rule or description; a person, thing, or case specified as distinct or not included; an act of excepting, omitting from mention or leaving out of consideration. Express exclusion of something from operation of contract or deed. An "exception" operates to take something out of thing granted which would otherwise pass or be included. Christman v. Emineth, N.D., 212 N.W.2d 543, 552.
And further
An exception in a statute is a clause designed to reserve or exempt some individuals from the general class of persons or things to which the language of the act in general attaches. The office of an "exception" in a statute is to except something from the operative effect of a statute or to qualify or restrain the generality of the substantive enactment to which it is attached, and it is not necessarily limited to the section of the statute immediately following or preceding. Gatliff Coal Co. v. Cox, C.C.A. Ky., 142 F.2d 876, 882 [both of the above definitions come from Black's Fifth Edition]
In other words, the rules are bent when dealing with an exemption, but the rules simply DO NOT APPLY to someone who was never placed on the list, i.e., - excepted. The inclusion of the word "mandatory" in section 508(C)(1)(a) adds a little weight, and it sounds like weight of law. Because this is the U.S. Code, not CFR, this means that the law can ONLY apply to government agencies or employees.
The USC is law for government personnel, but only CFR can be applied to U.S. citizens [26 USC 7805]. The IRS rules cannot be mandatory upon Corporations Sole because Section 508(C)(1)(a) stipulates that the tax laws have absolutely nothing to do with them. The only way that you can make them mandatory is by volunteering.
A Supreme Court decision regarding "non-taxpayers" said that the Internal Revenue Code only applies to taxpayers, and nothing in the code applies to non-taxpayers. As long as the Overseer stays out of a contractual nexus with any government, he/she will maintain the "Mandatory Exception" status, and, like the Sacred Order of Predicadores, will most likely prevail in event of attack by the IRS/SEC.
The "Trinidad v. Sagrada Orden" case was pre-federal reserve and pre-bankruptcy of 1933, but even so, the contractual nexus generated by the use of FeRNs is negated by a vow of poverty.
So now you can see why 501(c)(3), as a normal corporations, are created by the government, owe their servitude to the government, and must keep certain records and submit reports to the IRS.
TITLE 26 > Subtitle F > CHAPTER 61 > Subchapter A > PART III > Subpart A > Sec. 6033
But on the other hand...
Sec. 6033. Returns by exempt organizations
(a) Organizations required to file
(1) In general - Except as provided in paragraph (2), every organization exempt from taxation under section 501(a) shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and such other information for the purpose of carrying out the internal revenue laws as the Secretary may by forms or regulations prescribe, and shall keep such records, render under oath such statements, make such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe; except that, in the discretion of the Secretary, any organization described in section 401(a) may be relieved from stating in its return any information which is reported in returns filed by the employer which established such organization.
(2) Exceptions from filing
(A) Mandatory exceptions - Paragraph (1) shall not apply to -
(i) churches, their integrated auxiliaries, and conventions or associations of churches,
(ii) any organization (other than a private foundation, as defined in section 509(a) described in subparagraph (C), the gross receipts of which in each taxable year are normally not more than $5,000, or
(iii) the exclusively religious activities of any religious order.
The problem, therefore, is not in "how to obtain tax immune status", but in how to keep from giving away your naturally immune status. We believe that we have some of the keys, in our format for the Articles of Incorporation for Corporations Sole. So you can see that you have the assistance of the IRS in securing the resources of your religious society, and should be able to count on their assistance if any of their rogue agents decide to bring false charges against your organization.
