Pastor Ken Peters, the head of the Christian nationalist “Patriot Church” in Knoxville, Tennessee, endorsed a political candidate during Sunday’s service… while bragging about how it was perfectly legal for him to do so because his church wasn’t subject to the IRS restrictions that other churches must follow.
He’s wrong about all of that.
The endorsement of a candidate
Let’s just get the basics out of the way first. On Sunday, Peters announced that he would be turning over his pulpit for five minutes to a candidate he hoped would get elected later this year. That candidate was Monty Fritts, a “Christian Constitutional Conservative Republican” running for the Tennessee State House in District 32. (The current Republican in that seat is retiring at the end of this term.)
Before Fritts took the stage, however, Peters explained how he was able to get away with this: He said his church was not a typical tax-exempt organization like other churches, subject to IRS rules and regulations. His church was different—and because of that, the church was allowed to endorse anyone he wanted.
We have a guest who is running for office…
In case you are thinking, “Whoa, you’re not allowed to endorse candidates at church!,” you’re at the wrong church. This is Patriot Church! We endorse whoever we want to endorse.
And you’re, like, “Well, what about your 501(c)(3)?”
Well, two things there. Number one, I had a 501(c)(3) in Spokane. That never stopped me. Okay? But when we started this church here in Tennessee, we are not a 501(c)(3), so we can do whatever the… we want! Whatever we want! We’re a free church! Feels good to be free.
Now, the 501(c)(3) never stopped me, but at least I don’t even have to think about it now. We’re a 508(1)(a), which is in the IRS code. It’s totally awesome and cool. We’re a free church. So we do endorse candidates.
Is he right about all that?
No. Not even close.
The IRS rules regarding churches
Even if you don’t care about IRS rules, here’s what you need know to make this make sense: Just about all non-profit groups (including charities, cause-based organizations, and churches) are considered 501(c)(3) groups. With that designation, the IRS is saying these groups are not looking to make a profit but rather serve a greater cause. As a way to encourage people to give money to those groups, donations to them may be deducted on your taxes. It’s theoretically a win-win for both sides.
To keep the 501(c)(3) designation, though, there are certain rules these groups must follow: They have to fill out paperwork for the government each year (a “Form 990”) detailing how much money they took in and how much is getting paid out and to whom. They also cannot endorse political candidates.
Churches get an even sweeter deal. They are automatically granted a tax-exempt status (while secular charities have to fill out paperwork to earn the designation) and they don’t have to fill out the Form 990. Church/state separation groups have argued that the government’s preferential treatment for houses of worship is unconstitutional.
But plenty of conservative pastors still argue that these rules are too onerous and they’ve deliberately tried to goad the IRS into revoking their tax-exempt status just so they can file a lawsuit over it.
For several years, hundreds of evangelical churches participated in “Pulpit Freedom Sunday” where they proudly endorsed Republican candidates and sent videos of those sermons directly to the IRS. You would think the IRS would take action… but no. They never did. Yet even though the IRS has since promised to enforce its own rules, not a single one of those churches has had its tax-exemption revoked as a result of endorsing a candidate. (Donald Trump claimed he got rid of that rule, colloquially known as the Johnson Amendment, but he never actually did.)
The irony is that the churches pushing to repeal the Johnson Amendment say they don’t want to be beholden to the government, yet they’re effectively becoming arms of the Republican Party.
What’s the deal with the 508(c)(1)(a)?
So here comes Ken Peters, saying that even though he endorsed candidates when he was at a 501(c)(3) church—which violated the IRS rules and is actually a rather appalling admission of guilt—that no longer matters anyway, because Patriot Church is a 508(1)(a) church, and he can do whatever he’d like now!
(He’s presumably referring to a 508(c)(1)(a) church, but who’s keeping track, am I right?)
What does that actually mean?
Simply put, this is the rule that says churches don’t have to file paperwork to receive a tax-exempt status. They receive that distinction by default. Peters thinks that because he never filled out the paperwork to become a registered non-profit group, he’s under no obligation to follow the IRS’ rules. But that’s not how it works. In fact, all churches are still obligated to follow 501(c)(3) rules.
In a 2019 article written by “church planting specialist” Derek Myers, he thoroughly explained this distinction before adding, with his own emphasis,
… Section 508 does not define a church, nor does it grant a church special government-free tax-exempt status. There is, in fact, no such thing as a 508 church.
Myers also noted a potential problem for churches who didn’t understand the distinction.
If you donate to a typical 501(c)(3) non-profit, you can deduct that donation on your taxes. But if you donate to a “508” church and attempt to deduct that money on your taxes, the IRS may audit you. And if they do, the burden of proof is now on you to prove you donated to an organization that meets all the requirements of a 501(c)(3) group. Failure to do this could result in large fines.
Patriot Church does not meet the requirements of a 501(c)(3) group because it’s playing politics and endorsing candidates.
Ken Peters is screwing over his own members and he doesn’t realize it. All because he doesn’t want any government oversight of his church while still receiving all the government benefits of running one.
He’s not a patriot. He’s a grifter.
The question is how long it’ll take before his church members figure that out.
(via @adhdeconstruction)