Chief Counsel Advice 200404048, December 16, 2003
Article summary. The IRS chief counsel has issued an opinion addressing the question of whether ministers can “requalify” for exemption from Social Security years after the deadline has expired if they change faiths, are “reordained” by their new faith, and thereafter acquire an opposition to accepting benefits from Social Security on the basis of their religious convictions. The chief counsel opinion agrees with a previous federal appeals court decision allowing ministers to requalify for exemption under these limited circumstances. It is important to note that the opinion provides no relief to ministers who failed to opt out of Social Security before the deadline expired and who have not changed faiths, been reordained by their new faith, and thereafter acquired an opposition to accepting Social Security benefits on the basis of their religious convictions. This article will explain the chief counsel’s opinion, and assess its significance to ministers.
The tax code permits ministers to exempt themselves from Social Security (self-employment taxes) if they meet several conditions. One of these conditions is that the application for exemption (Form 4361) be submitted to the IRS by the deadline of a minister’s Form 1040 for the second year in which the minister has self-employment earnings of $400, any part of which is from the performance of ministerial services. In most cases, this means that the deadline is April 15th following the second calendar year of employment as a minister. This is a fairly narrow “window” of time for filing the exemption application. In many cases, ministers do not even learn of the exemption option until after the deadline has passed.
A number of ministers have attempted to file exemption applications after the filing deadline expired. To illustrate, a number of ministers who failed to file a timely exemption application have argued that their constitutional right to freely exercise their religion is violated if they are forced to pay Social Security taxes against their will. This contention has been consistently rejected by the courts. The United States Supreme Court has observed that “if we hold that ministers have a constitutional right to opt out of the Social Security system when participation conflicts with their religious beliefs, that same right should extend as well to persons with secular employment and to other taxes, since their right to freely exercise their religion is no less than that of ministers.” United States v. Lee, 455 U.S. 252 (1982).
Other ministers have argued that (1) they were unaware of the deadline; (2) they were certain (but could not prove) that they had filed a timely election; (3) they were given incorrect advice by IRS employees regarding the requirements for exemption; or (4) their opposition to participation in the Social Security program did not arise until after the deadline for filing an exemption application had passed. The courts have rejected all of these arguments.
But what about ministers who do not qualify for exemption until after the deadline for filing an exemption application has expired? For example, what about a minister who was not opposed to accepting public insurance benefits (including Social Security) based on ministerial services prior to the deadline for filing an exemption application, but years later acquired such a belief? The IRS chief counsel’s office has received several questions from field agents raising this question, and in its recent opinion it addressed three of these questions.
Case 1: Change of Faith after Expiration of Filing Deadline
The first question the chief counsel addressed is illustrated by the following example:
Pastor G is a duly ordained minister of a church who is not opposed to the acceptance of public insurance. Pastor G subsequently has a change of faith and is ordained as a minister in another church, which results in a change in belief by Pastor G to being opposed to the acceptance of public insurance. Pastor G seeks exemption from self employment tax.
The chief counsel correctly noted that a 1994 federal appeals court decision (Hall v. Commissioner, summarized below) addressed this issue and concluded that a minister under these circumstances would requalify for exemption from Social Security. The chief counsel explained that the Hall case “provides that when an individual enters the ministry anew in a new church, having adopted a new set of beliefs about the propriety of accepting public insurance, it is logical and consistent with the [language of the tax code] to characterize that individual as a ‘new’ minister for the purposes of seeking an exemption.” As a result, the chief counsel concluded that “a minister seeking exemption from self employment tax who has a change of faith that results in a change in belief to opposing the acceptance of public insurance … merely needs to sign the Form 4361.” The chief counsel added,
There are situations in the field where taxpayers who are ordained ministers who have had a change of faith accompanied with a change in belief to opposing the acceptance of public insurance, are filing additional statements along with the Form 4361 that contain language that opposes the acceptance of public insurance. While a taxpayer may file an additional statement along with the Form 4361, the statement must contain language that meets the requirements of section 1402(e) [of the tax code]. If a taxpayer provides a statement that uses language that does not meet the requirements of these sections, the exemption must be denied.
Case 2: Opposition to Social Security Precedes Change of Faith
The second question addressed by the chief counsel is illustrated by the following example:
Pastor T is a duly ordained minister of a church who because of religious principles is opposed to the acceptance of public insurance. Pastor T filed a Form 4361 that the IRS did not approve for reasons of late filing. Pastor T subsequently has a change of faith and is ordained as a minister in another church and has no resulting change in belief regarding public insurance (taxpayer continues to be opposed to the acceptance of public insurance). May the taxpayer file another Form 4361?
The chief counsel answered “no” to this question. The chief counsel’s opinion states,
The taxpayer is a duly ordained minister of a church who because of religious principles is opposed to the acceptance of public insurance. The taxpayer has previously signed and filed a Form 4361 seeking exemption from self employment tax. The taxpayer has satisfied all of the exemption requirements, except that he did not timely file this application by the due date of his income tax return for the second taxable year for which he had net earnings from self-employment of $400 or more for service performed in the exercise of taxpayer’s ministry. The IRS correctly denied the taxpayer’s application due to the late filing. Years later the taxpayer changes his faith and joins another church. Taxpayer is then ordained as a minister in his new church and because of religious principles he continues to be opposed to accepting public insurance. You ask whether the taxpayer may file another Form 4361? The question goes to whether the taxpayer may file another Form 4361, which will be considered timely filed, after his ordination in the new church if he does so by the due date of his income tax return for the second taxable year for which he has net earnings from self-employment of $400 or more for service performed in the exercise of taxpayer’s ministry in the new church.
The chief counsel noted that the filing deadline for Form 4361 generally is the due date for filing a Form 1040 for the second year in which a minister has net earnings from self employment of $400 or more, any part of which was derived from the performance of ministerial services. The chief counsel summarized two federal appeals court rulings that have addressed the filing deadline.
Ballinger v. Commissioner, 728 F.2d 1287 (10th Cir. 1984)
A federal appeals court ruled that the deadline for filing an application for exemption from self employment taxes is not renewed or extended simply because a minister undergoes a change of faith. In the Ballinger case a minister was ordained by a Baptist church in 1969 and served as a minister of that church from 1969 through 1972. He did not apply for an exemption from self employment tax. He became a minister in another faith in 1973 and performed services as a minister of a church affiliated with his new faith in 1973, 1974 and 1975. He paid the appropriate self employment tax on such earnings during each of these years.
In 1978 the minister was formally ordained by his new church, and in the same year he submitted an exemption application (Form 4361) to the IRS, claiming that he followed his new church’s teachings in opposition to accepting public or private insurance benefits, such as Social Security benefits, in the event of death, disability or old age. The IRS denied this application for exemption, and the Tax Court agreed. The Tax Court refused to interpret the time requirements for filing an exemption application as allowing an exemption after a second ordination.
The minister appealed this decision to a federal appeals court, which agreed with the IRS and Tax Court. The court noted that the question was whether an individual, who has already assumed the duties of a minister, belatedly acquires a belief in opposition to the acceptance of public insurance and that change in belief is not accompanied by a change in faith, is entitled to the exemption if he files within the statutory time frame after acquiring his new belief. The court concluded that the tax code does not provide for an exemption where a minister belatedly acquires a belief in opposition to public insurance apart from conversion to another faith.
However, it insisted that it did not agree with the Tax Court’s sweeping conclusion that an exemption is never permissible in cases of second ordinations. The court observed:
The statute makes no distinction between a first ordination and subsequent ordinations. Not all churches or religions have a formally ordained ministry, whether because of the nature of their beliefs, the lack of a denominational structure or a variety of other reasons. Courts are not in a position to determine the merits of various churches nor an individual’s conversion from one church to another. Thus, we cannot hold that an individual who functions as a minister in a church which does not ordain, license or commission that individual in a traditional or legally formal manner is not entitled to the exemption. Nor can we hold that an individual who has a change of belief accompanied by a change to another faith is not entitled to the exemption. We interpret Congress’ language providing an exemption for any individual who is “a duly ordained, commissioned or licensed minister of a church” to mean that the triggering event is the assumption of the duties and functions of a minister.
Since the minister began his duties with his new church in 1973, his deadline for filing an exemption application was April 15, 1975. It did not matter that he was not ordained until 1978, since the critical event according to this court is the date a person in fact begins performing the duties of a minister.
Hall v. Commissioner, 30 F.3d 1304 (10th Cir. 1994)
In 1994, a federal appeals court for the tenth circuit (Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming) ruled that the deadline for filing an exemption application had to be recomputed after a minister left the ministry for five years and was then reordained by another church. Pastor Hall served as a Methodist minister in 1980 and 1981, and received net earnings from self-employment in both years of at least $400 from the exercise of his ministry. As a result, the deadline for filing an application for exemption from self-employment taxes was April 15, 1982. During this time, however, Pastor Hall was not opposed to the acceptance of Social Security or other public insurance benefits, and did not file for exemption. He left the ministry and worked as an engineer. Five years later, he was ordained as a minister by another denomination, and immediately filed an application for exemption from self-employment taxes. He insisted that he developed an opposition to accepting Social Security benefits as a result of the influence of his new denomination.
The IRS denied Pastor Hall’s exemption application, concluding that the deadline was April 15, 1982. On appeal, the Tax Court agreed with the IRS and denied Pastor Hall’s exemption application. The court noted that the tax code does not make any provision for a second application period following a second ordination. Pastor Hall appealed, and a federal appeals court concluded that the deadline for filing an exemption application is renewed when a minister is reordained by another church. The court observed:
The question before us is whether the taxpayer’s return to the ministry after a five-year absence, combined with his ordination in a new church and his acceptance of a new belief in opposition to public insurance, provides an opportunity to opt out of the social security system …. Without performing a detailed analysis, we express concern that the Tax Court’s interpretation of [the deadline requirement] could arbitrarily and unconstitutionally interfere with the adherence to sincere religious beliefs by individuals, such as the taxpayer in this case, who undergo a genuine religious conversion, are ordained in a second church, and act within the defined statutory period to exempt themselves from tax on their self-employment income …. The plain language of the statute extends the exemption to “any individual who is a duly ordained, commissioned, or licensed minister of a church … upon filing an application … together with a statement that either he is conscientiously opposed to, or because of religious principles he is opposed to, the acceptance … of any public insurance.” [Pastor Hall] fits that profile exactly. The code also requires an applicant for exemption to file on or before “the due date of the return … for the second taxable year for which he has net earnings from self-employment [from his ministerial services] of $400 or more.” As recited above, [Pastor Hall] filed during the first taxable year in which his self-employment income from his new ministry exceeded $400. When an individual enters the ministry anew in a new church, having adopted a new set of beliefs about the propriety of accepting public insurance, it is logical and consistent with the [language of the tax code] to characterize that individual as a “new” minister for the purposes of seeking an exemption. The plain language does not preclude this sensible reading.
The court noted that it was not concerned that its decision would “open the floodgates for conniving Elmer Gantrys to dupe the Internal Revenue Service and opt out of the Social Security system without documenting a legitimate religious or conscientious reason to justify their exemption from the self-employment tax.” It explained, “It seems unlikely that individuals will forgo the retirement security represented by the Social Security system without a sincere religious objection. Ministers who do not switch churches may not belatedly opt out of the system. Ministers who do switch will still have a limited time frame in which to file for exemption following their assumption of the duties and functions of the new ministry. And once ministers elect exemption, that exemption is irrevocable. Thus, taxpayer qualified for the self-employment tax exemption, by applying for exemption in the first tax year immediately following his second ordination and the commencement of his new ministry.”
The IRS chief counsel’s opinion applied the Ballinger and Hall cases to the second question summarized above, and concluded,
As in Ballinger and Hall, the taxpayer had a change of faith. But unlike these cases, he did not have a change of belief in opposing the acceptance of public insurance. He has consistently opposed such insurance beginning with his first ministry. When an individual enters the ministry anew in a new church, having adopted a new set of beliefs about the propriety of accepting public insurance, it is logical and consistent with the [language of the tax code] to characterize that individual as a ‘new’ minister for the purposes of seeking an exemption. Under the facts and circumstances presented, however, the taxpayer had his opportunity based on his beliefs to apply for an exemption after the first ordination, but the exemption was denied because he did not file the application timely as is required under the statute. The tax code does not give him a second opportunity to file a Form 4361 in the stated circumstances due only to a change in faith and entering the ministry in a new church.
Case 3: When Does the 2-Year Period Begin?
The third question addressed by the chief counsel is set forth below:
Pastor B is a duly ordained minister of a church. He applies for exemption from self employment taxes by filing a Form 4361. On line 3 of the Form 4361, he enters the date of January 1, 2000 as the date that he was ordained. Does this mean that for purposes of line 5 of the form (where taxpayer is to enter the first two years that taxpayer had net earnings from self-employment of $400 or more for service performed in the exercise of the taxpayer’s ministry after the date entered on line 3), that earnings cannot start until January 1, 2001?
The chief counsel’s opinion states, “The [tax code] provides, generally, that any application for exemption from self employment taxes must be filed by the due date of the minister’s income tax return for the second taxable year for which the minister has net earnings from self-employment of $400 or more. Thus, if the minister had net earnings from self employment of $400 or more for service performed in the exercise of the taxpayer’s ministry in years 2000 and 2001, then he must file Form 4361 on or before the due date of his income tax return for the year 2001.”
Relevance to Ministers
What is the relevance of the chief counsel’s opinion summarized in this article? Consider the following points.
1. Chief counsel advice. What is the legal significance of a “chief counsel advice” memorandum? Section 6110 of the tax code defines “chief counsel advice” as any written advice or instruction prepared and issued by the Office of Chief Counsel to field employees of the IRS that contains legal interpretations or positions of the IRS or the Office of Chief Counsel concerning the tax code, regulations, or IRS rulings. While chief counsel advice are not definitive statements of IRS positions, and cannot be cited as precedent in a particular case, they do provide the public with the views of the IRS Office of Chief Counsel regarding current tax issues.
2. New hope for ministers? Does the chief counsel advice memorandum provide ministers with renewed hope to exempt themselves from Social Security after the deadline for filing an exemption application has expired? Absolutely not. As noted above, the ruling breaks no new ground, but rather simply endorses the conclusion reached by a federal appeals court in 1994 in the Hall case. The chief counsel advice memorandum no more “opens the floodgates” for ministers to requalify for exemption from Social Security than the Hall case did a decade ago. For the vast majority of ministers who fail to file an exemption application by the deadline summarized above there is no second chance. They will never be able to exempt themselves from Social Security coverage. The chief counsel advice memorandum, like the court’s decision in the Hall case, is a narrow one and applies only to those few ministers who
- change their church affiliation
- are reordained
- develop an opposition, based on their new faith, to the acceptance of Social Security benefits, and
- submit an exemption application (Form 4361) by the due date of the federal tax return for the second year in which they have net self employment earnings of $400 or more, any part of which comes from the performance of ministerial services in their new faith
Few ministers will satisfy these requirements. The chief counsel advice memorandum will not apply to ministers who do not change their church affiliation or doctrine. Ministers who did not file an exemption application within the prescribed period, and who have served a local church for several years, are not given a second chance to opt out of Social Security by this ruling. Further, the chief counsel advice memorandum affirmed an earlier case denying an exemption from Social Security to a minister who changed his religious beliefs, was reordained, and then waited five years before submitting an exemption application. Ballinger v. Commissioner, 728 F.2d 1287 (10th Cir. 1984).
The chief counsel advice memorandum also cautioned that ministers who remain opposed to Social Security benefits both before and after a change in their faith do not requalify for exemption:
When an individual enters the ministry anew in a new church, having adopted a new set of beliefs about the propriety of accepting public insurance, it is logical and consistent with the [language of the tax code] to characterize that individual as a ‘new’ minister for the purposes of seeking an exemption. Under the facts and circumstances presented, however, the taxpayer had his opportunity based on his beliefs to apply for an exemption after the first ordination, but the exemption was denied because he did not file the application timely as is required under the statute. The tax code does not give him a second opportunity to file a Form 4361 in the stated circumstances due only to a change in faith and entering the ministry in a new church.
3. Consequences of exemption from Social Security. In the Hall case, the court predicted that its ruling would not “open the floodgates” for ministers to opt out of Social Security, because doing so would be against their own best interests. The court observed, “It seems unlikely that individuals will forgo the retirement security represented by the Social Security system without a sincere religious objection.”
4. Other requirements for exemption. The recent chief counsel advice memorandum only addresses one requirement for exemption from Social Security’the deadline for filing an exemption application (Form 4361) with the IRS. Ministers should note that the following additional requirements exist for exemption:
- You are conscientiously opposed to public insurance because of your individual religious considerations (not because of your general conscience), or you are opposed because of the principles of your religious denomination.
- You file for other than economic reasons.
- You inform the ordaining, commissioning, or licensing body of your church that you are opposed to public insurance if you are a minister.
- You establish that the organization that ordained, commissioned, or licensed you is a tax-exempt religious organization.
- You establish that the organization is a church or a convention or association of churches.
- You did not make either of the following irrevocable elections to be covered under Social Security: (1) you elected to be covered under Social Security by filing Form 2031 for your 1986, 1987, 2000, or 2001 tax year; or (2) you elected before 1968 to be covered under Social Security for your ministerial services.
- You sign and return the statement the IRS mails to you to certify that you are requesting an exemption based on the grounds listed on the statement.
5. Examples. The recent IRS chief counsel advice memorandum is illustrated by the following examples.
opposition to Social Security occurs without a change of faith
• Example. Pastor B has served as senior pastor of a church for many years. He did not apply for exemption from Social Security before the deadline for doing so expired several years ago because he was not opposed to receiving Social Security benefits based on his ministerial employment at that time. This year, however, Pastor B learns of the IRS chief counsel advice memorandum, and begins to rethink his position on Social Security. He concludes that he in fact is opposed on the basis of religious convictions to receiving Social Security benefits, and he would like to submit a Form 4361 to claim exemption. He cannot do so. In the Hall case (which served as the basis for the recent chief counsel advice memorandum) a federal appeals court concluded that “ministers who do not switch churches may not belatedly opt out of the system.”
• Example. Pastor G has served as associate pastor of a church for many years. He did not apply for exemption from Social Security before the deadline for doing so expired because no one told him about this option. However, he was never opposed on the basis of religious convictions to receiving Social Security benefits based on his ministerial employment. This year, Pastor G learns of the IRS chief counsel advice memorandum, and views this as an opportunity to “save taxes.” He is not eligible to file a Form 4361, for two reasons. First, he does not qualify for exemption, since a desire to “save taxes” is not a valid basis for exemption. Second, in the Hall case (which served as the basis for the recent chief counsel advice memorandum) a federal appeals court concluded that “ministers who do not switch churches may not belatedly opt out of the system.”
• Example. Pastor D has served as senior pastor of a church for many years. He did not apply for exemption from Social Security before the deadline for doing so expired because he was not opposed to receiving Social Security benefits based on his ministerial employment. However, over the years Pastor D did develop a sincere opposition, based on religious convictions, to accepting any form of “public insurance,” including Social Security. He learns of the IRS chief counsel advice memorandum, and plans on filing a Form 4361 exemption application. He is not eligible to do so. In the Hall case (which served as the basis for the recent chief counsel advice memorandum) a federal appeals court concluded that “ministers who do not switch churches may not belatedly opt out of the system.”
opposition to Social Security occurs after a change of faith
• Example. Pastor J has served as senior pastor of a church for many years. He did not apply for exemption from Social Security before the deadline for doing so expired because he was not opposed to receiving Social Security benefits based on his ministerial employment. However, last year Pastor J resigned his pastoral position, joined a new faith, and was ordained as a minister by the new faith. The new faith teaches opposition to receiving any form of public assistance, including Social Security. Pastor J adopts this teaching. He learns of the IRS chief counsel advice memorandum, and plans on filing a Form 4361 exemption application this year. He is eligible to do so, since he meets all the requirements for renewal of exemption listed by the court in the Hall case and in the chief counsel advice memorandum: (1) change of church affiliation; (2) reordination by the new church; (3) develop an opposition, based on one’s new faith, to the acceptance of Social Security benefits; and (4) submit an exemption application (Form 4361) by the due date of the federal tax return for the second year in which one has net self employment earnings of $400 or more, any part of which comes from the performance of ministerial services in one’s new faith.
• Example. Pastor T was an associate pastor of a church for many years. She did not apply for exemption from Social Security before the deadline for doing so expired because she was not opposed to receiving Social Security benefits based on her ministerial employment. Five years ago, Pastor T resigned her pastoral position, joined a new faith, and was ordained as a minister by the new faith. The new faith teaches opposition to receiving any form of public assistance, including Social Security. Pastor T adopted this teaching, but did not file an exemption application (Form 4361). This year she learns of the IRS chief counsel advice memorandum, and plans on filing a Form 4361 exemption application. She is not eligible to do so, since the deadline for filing a new application for exemption has expired.
• Example. Pastor K is the senior pastor of a church. He did not apply for exemption from Social Security before the deadline for doing so expired because he was not opposed to receiving Social Security benefits based on his ministerial employment. However, last year Pastor K resigned his pastoral position and ordination and became associated with a new faith that teaches opposition to receiving any form of public assistance, including Social Security. The new faith does not “ordain” ministers, but Pastor K serves as a minister in one of its churches. Pastor K adopts the teaching of his new faith regarding Social Security. He learns of the IRS chief counsel advice memorandum, and plans on filing a Form 4361 exemption application this year. It is likely, but not certain, that Pastor K is eligible to do so. In the Hall case, a federal appeals court ruled that the following requirements must be met in order to requalify for exemption from Social Security: (1) change of church affiliation; (2) reordination by the new church; (3) develop an opposition, based on one’s new faith, to the acceptance of Social Security benefits; and (4) submit an exemption application (Form 4361) by the due date of the federal tax return for the second year in which one has net self employment earnings of $400 or more, any part of which comes from the performance of ministerial services in one’s new faith. Pastor K meets all of these requirements except for the second one (reordination by the new church). The Hall case explicitly requires that a minister not only change faiths to requalify for exemption after the original deadline has expired, but also that the minister be “reordained” by the new faith. The recent IRS chief counsel advice memorandum contains the same language. It states that the Hall case “provides that when an individual enters the ministry anew in a new church, having adopted a new set of beliefs about the propriety of accepting public insurance, it is logical and consistent with the [language of the tax code] to characterize that individual as a ‘new’ minister for the purposes of seeking an exemption.” This language strongly supports the conclusion that reordination is required. On the other hand, in the Ballinger case (discussed above) a federal appeals court made the following observation, “Not all churches or religions have a formally ordained ministry, whether because of the nature of their beliefs, the lack of a denominational structure or a variety of other reasons. Courts are not in a position to determine the merits of various churches nor an individual’s conversion from one church to another. Thus, we cannot hold that an individual who functions as a minister in a church which does not ordain, license or commission that individual in a traditional or legally formal manner is not entitled to the exemption. Nor can we hold that an individual who has a change of belief accompanied by a change to another faith is not entitled to the exemption. We interpret Congress’ language providing an exemption for any individual who is ‘a duly ordained, commissioned or licensed minister of a church’ to mean that the triggering event is the assumption of the duties and functions of a minister.”
• Example. Pastor M is the senior pastor of a church. He did not apply for exemption from Social Security before the deadline for doing so expired, because he was not opposed to receiving Social Security benefits based on his ministerial employment. This year he learns about the IRS chief counsel memorandum and is told by another pastor that if he “switches churches” the deadline for filing an exemption application (Form 4361) will start all over. This advice is incorrect. A change of faiths is only one requirement to requalify for exemption after the original deadline has expired. The other requirements, as noted above, are reordination by the new church; acquiring an opposition, based on one’s new faith, to the acceptance of Social Security benefits; and submitting an exemption application (Form 4361) by the due date of the federal tax return for the second year in which one has net self employment earnings of $400 or more, any part of which comes from the performance of ministerial services in one’s new faith. If these additional requirements are not met, then Pastor M will not requalify for exemption even if he does change faiths.
• Example. Pastor L was an associate pastor of a church for many years. This year she accepts a position as senior pastor in a different church associated with the same faith. Pastor L did not apply for exemption from Social Security before the deadline for doing so expired because she was not opposed to receiving Social Security benefits based on ministerial employment. She learns about the IRS chief counsel memorandum, and is told by another pastor that by accepting the new pastoral position she requalifies for opting out of Social Security if she so chooses. This advice is incorrect. Pastor L does not requalify for exemption since she has not had a change of faith and been reordained by a new faith.
change of faith not accompanied by opposition to accepting public insurance benefits
• Example. Pastor G has served as senior pastor of a church for many years. He did not apply for exemption from Social Security before the deadline for doing so expired because he was not opposed to receiving Social Security benefits based on his ministerial employment. However, last year Pastor G resigned his pastoral position, joined a new faith, and was ordained as a minister by the new faith. The new faith has no position on participation in Social Security. This year Pastor G learns of the IRS chief counsel advice memorandum, and sees it as an opportunity to be relieved of the burden of paying self-employment taxes. He does not requalify for exemption, for two reasons. First, he has not been reordained by a faith that is opposed to the acceptance of public insurance benefits (including Social Security). The chief counsel advice memorandum states, “When an individual enters the ministry anew in a new church, having adopted a new set of beliefs about the propriety of accepting public insurance, it is logical and consistent with the [language of the tax code] to characterize that individual as a ‘new’ minister for the purposes of seeking an exemption.” This language indicates that a change of belief about the propriety of accepting public insurance benefits must reflect the views of one’s new faith. Second, Pastor G’s desire to be relieved of the burden of paying self-employment taxes does not qualify as a basis for exemption.
© Copyright 2004 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m94 m95 c0304
