A: James 1:1 says, “James, a servant of God and of the Lord Jesus Christ, to the twelve tribes which are scattered abroad, greeting.” The twelve tribes are, without question, the twelve tribes of Israel. So this letter from James has to be understood in that context, of being written to the nation of Israel (the Jews), and not to the present grace dispensation church which is composed mostly of Gentiles.
Another reason we that know that James was writing to Jewish assemblies is found in James 2:2 which says, “For if there come unto your assembly a man with a gold ring, in goodly apparel, and there come in also a poor man in vile raiment ….” The word “assembly” in this verse is translated from the Greek word “sunagoge”, which means and is almost always translated as “synagogue”, a Jewish assembly. In its 57 occurrences in the new testament, “sunagoge” is never used in reference to a grace dispensation church or to any assembly of Gentiles. Nor is “sunagoge” ever used in any of Paul’s 13 letters to the Gentiles (Romans-Philemon). So this is another very clear indication that the epistle of James was written to assemblies of Jews.
Also keep in mind that in Galatians 2:7-9, James (along with Peter and John) agreed to only teach the Jews, as they had been doing. “… when they saw that the gospel of the uncircumcision (Gentiles) was committed unto me (Paul), as the gospel of the circumcision was unto Peter; (For he that wrought effectually in Peter to the apostleship of the circumcision, the same was mighty in me toward the Gentiles:) And when James, Cephas (Peter), and John, who seemed to be pillars, perceived the grace that was given unto me, they gave to me and Barnabas the right hands of fellowship; that we should go unto the heathen (Gentiles), and they unto the circumcision (Jews).” This same meeting which Paul in Galatians 2:1-10 is also described by Luke in Acts 15:1-29, where James, as the leader of the assembly in Jerusalem decreed that the Gentiles do not have to keep the law of Moses. But it is important to note that the Jews in Israel were still keeping the law of Moses and were not told otherwise. Thus we see that in Acts 21:20, which is 25 years or so after the crucifixion of Christ, James tells Paul, “… Thou seest, brother, how many thousands of Jews there are which believe; and they are all zealous of the law.”
Finally, in James 2:26, he told the Jews that, “… by works a man is justified, and not by faith only.” Contrast that with the teaching of Paul, the Apostle of the Gentiles. Paul taught the Gentiles and the Jews which were scattered among them in Romans 4:4, “But to him that worketh not, but believeth on him that justifieth the ungodly, his faith is counted for righteousness.” The rest of Romans chapter 4 expounds upon this thought. This is God’s teaching to us from “the apostle of the Gentiles” (Romans 11:13). The message of James and the message of Paul would contradict one another if it were not for the fact that these messages were written to two totally separate audiences, one under the law of Moses and the other under grace. Paul tells us in Romans 6:14, “… for ye are not under law, but under grace ….”