Jude 4 says, "For certain men whose condemnation was written about long ago have secretly slipped in among you. They are godless men, who change the grace of our God into a license for immorality and deny Jesus Christ our only Sovereign and Lord." So you see that in the New Testament itself, this heresy was manifested.
The writer mis-interpretated Jude 4. The grace of God is not heresy; the heresy is the abuse of the grace of God changing it into a license for immorality. This abuse denies Jesus Christ. Notice that the verse says that this heresy was propagated by godless men.
We are not godless men. We do not deny Jesus Christ. We are in Christ and Christ is in us. The power of the life-giving Spirit has freed us from the power of sin, therefore we no longer follow our sinful nature but instead follow the Spirit (Romans 8:1-4).
Romans 8:1-4 (NLT)
1 So now there is no condemnation for those who belong to Christ Jesus.2 And because you belong to him, the power of the life-giving Spirit has freed you from the power of sin that leads to death. 3 The law of Moses was unable to save us because of the weakness of our sinful nature. So God did what the law could not do. He sent his own Son in a body like the bodies we sinners have. And in that body God declared an end to sin’s control over us by giving his Son as a sacrifice for our sins. 4 He did this so that the just requirement of the law would be fully satisfied for us, who no longer follow our sinful nature but instead follow the Spirit.
In chapter 5 of Galatians, Paul argues for our Christian freedom, and yet he makes this point in the thirteenth verse of Galatians 5: "You, my brothers, were called to be free. But do not use your freedom to indulge the sinful nature." You see, people were saying, "We are free! We agree with you, St. Paul, that we are not under law, we are under grace. We are justified by grace through faith alone, and therefore we ought to have no dealings with the moral law of God. The moral law of God is not our guide to holy conduct. In fact, we probably must demonstrate that we are orthodox, that we believe in salvation by grace through faith, by violating God's law. Then we will truly pride ourselves on being people who are saved by grace through faith!"
The writer rightly quotes Galatians 5:13 and this is also what we want i.e. do not use our freedom in Christ to indulge the sinful nature. However, the writer again misreads the heart of the Christ-centered antinomian by claiming that he will think this way: "The moral law of God is not our guide to holy conduct. In fact, we probably must demonstrate that we are orthodox, that we believe in salvation by grace through faith, by violating God's law."
This is NOT what Paul teaches us. What does Paul say?
Romans 5:21 - 6:2 (NLT)
So just as sin ruled over all people and brought them to death, now God’s wonderful grace rules instead, giving us right standing with God and resulting in eternal life through Jesus Christ our Lord. Well then, should we keep on sinning so that God can show us more and more of his wonderful grace? Of course not! Since we have died to sin, how can we continue to live in it?
Romans 6: 12-15 (NLT)
Do not let sin control the way you live; do not give in to sinful desires. Do not let any part of your body become an instrument of evil to serve sin. Instead, give yourselves completely to God, for you were dead, but now you have new life. So use your whole body as an instrument to do what is right for the glory of God. Sin is no longer your master, for you no longer live under the requirements of the law. Instead, you live under the freedom of God’s grace. Well then, since God’s grace has set us free from the law, does that mean we can go on sinning? Of course not!
Titus 2:11-12 (NIV)
For the grace of God that brings salvation has appeared to all men. It teaches us to say "No" to ungodliness and worldly passions, and to live self-controlled, upright and godly lives in this present age
In 1 Corinthians 5 there was a certain man living an incestuous life. He was living with his father's wife but the church was not dealing with this person because the church was probably influenced by this heretical idea that if you are saved by grace through faith alone, then it does not matter what you do with your body. So we read, "it is actually reported that there is sexual immorality among you, and of a kind that does not occur even among pagans: A man has his father's wife." The church among not upset with that. The church was not dealing with it. Why? Look at 1 Corinthians 6:12. There was a slogan going about the Corinthian church: "Everything is permissible for me. I can do everything. I don't have to concern myself with keeping God's moral law. I am justified by grace through faith alone." Of course, Paul condemned that nonsense.
The writer is right that Paul rebuked the church for not dealing with the man living in sin. However, looking at the context of 1 Corinthians 6:12, the writer omitted two "buts" stated by Paul: ""Everything is permissible for me"—but not everything is beneficial. "Everything is permissible for me"—but I will not be mastered by anything. "
This is the advice we live by. Everything is permissible in the sense that all our sins have been forgiven and we will still go to heaven. Although there are no heavenly consequences, we must remember that there are earthly consequences to all our actions - like what Pastor Prince likes to say: "Can a Christian smoker go to heaven? Of course ... in fact he will get there faster!"
A Christian still sins now and then because his flesh is still with him. However, the church will have to deal with the Christian who lives in sin. This is done not by holding back on the gospel of grace but rather through confronting that wayward brother in private as what Jesus has taught:
Matthew 18:15-17 (NLT)
You read newspaper reports of people who drive recklessly and cause the deaths of others through traffic accidents. Do you propose that we ban cars or proclaim that cars are evil? Similarly, just because the grace of God has been abused by some, it doesn't mean that the grace gospel is heresy. What about the many others whose lives have been wonderfully transformed by the grace gospel?