Income Taxes for Ministers

• A federal court in Colorado rejected a minister's claim that he was not required to pay income taxes. The minister claimed that the religious tenets of his church forbid members to pay income tax, and therefore it would violate the first amendment guaranty of religious freedom for him to be required to pay taxes. The court summarily rejected this argument, noting that "imposing income taxes on individuals whose religious tenets forbid the payment of those taxes does not violate the first amendment," and that "while the minister's religious beliefs may be sincerely held, the payment of income taxes is not voluntary." In responding to the fact that the minister purposely maintained no tax records, the court observed: "Under this scenario, the federal government is entitled to reconstruct his gross receipts and costs to arrive at an assessment for the unreported income. In this case, the IRS used Bureau of Labor statistics to estimate [the minister's] gross income for the relevant years. While this method may result in some inaccuracies, such imperfections are permissible." The court also repudiated the minister's attempt to avoid an IRS lien on his property by transferring it to his church. Such a conveyance was a "fraudulent conveyance" that was void under state law. Finally, the court acknowledged that the minister had filed a timely application to exempt himself from self-employment taxes, but it noted that this exemption did not apply to any of the minister's secular earnings. United States v. Gonzalez, 91-1 USTC 50,100 (D. Colo. 1991).

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