I got some more information from Jordan Grennon on this topic: "we are a free church recognized by the IRS code 508. State churches 501c3 have to register with the state and they get benefits but can also have their status taken away. We care about being a free church to preach our sacraments and help the world!"
Note: I did some research online and found this website which explains 508 really well:
www.helpinghandoutreach.org/introduction-to-508/