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Definition of "Religious Order"

The IRS recently issued guidance on the definition of this term.

The IRS has issued guidance on the definition of the term "religious order." The Internal Revenue Code exempts from self-employment taxes, FICA taxes, and federal income tax withholding, compensation received for services performed by a member of a religious order in the exercise of duties required by the order. Neither the Code, nor the income tax regulations, defines the term "religious order." To provide some certainty regarding the definition of a religious order, the IRS has published 7 characteristics that traditionally have been associated with religious orders. The IRS came up with this list by reviewing the court decisions that have addressed the issue. From now on, the IRS will use the following characteristics in determining whether or not an organization is a religious order:

(1) The organization is described in section 501(c)(3) of the Code. (2) The members of the organization ...

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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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Posted:
  • May 1, 1991

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