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Social Security - Part 3

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• Can ministers who have exempted themselves from social security coverage participate in an IRA funded through certificates of deposit? This question was correctly answered in the affirmative in the previous issue of Church Law & Tax Report. In summary, to qualify for the exemption, a minister must be opposed on the basis of religious convictions to the acceptance of benefits under any "public insurance system" (including the social security program). Regulation 1.1402(e)-2A(2) specifies that the term "public insurance … refers to governmental, as distinguished from private insurance, and does not include insurance carried with a commercial insurance carrier." A well-known tax periodical recently reported that in IRS Technical Advice Memorandum 8741002, the IRS held that a minister who was exempt from social security could not participate in an IRA. Unfortunately, this advice ...

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

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  • January 1, 1988

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