Q&A: Who Is a Minister for Federal Tax Reporting Purpos...

We have someone on staff we call our pastor of education, but some members on our board aren’t sure she qualifies as a minister when reporting income taxes. How can we know for sure?

In deciding if a person is a minister for federal income tax reporting, the following five factors must be considered:

ordained, commissioned, or licensed status (required);
administration of sacraments;
conduct of religious worship;
management responsibilities in the local church or a parent denomination; and
whether the person is considered a religious leader by the church or parent denomination.

In general, the IRS and the courts require that a minister be ordained, commissioned, or licensed, and then they apply a "balancing test" with respect to the other four factors. The more of those factors that a person satisfies, the more likely he or she will be deemed a minister for tax reporting.

Adapted from the annual Church & Clergy Tax Guide.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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