Tax Planning and Compliance for Tax-Exempt Organizations, Fifth Edition 2019 Cumulative Supplement, 5th Edition
by Jody Blazek
CHAPTER 25Employment Taxes
§ 25.2 Ministers
(a) What Is a Minister?
p. 787. Add at end of subsection:
A claim to be a minister exempt from self‐employment taxes, when activities producing profits are promotion of abusive tax arrangements, was correctly denied by the Tax Court.1 Though the taxpayers were founders of an unincorporated church ministry, the services they performed in their capacity as ministers didn't apply where they received payment for their work in setting up the aforementioned arrangements to allow persons to join a ministry.
(b) How Ministers Are Special
p. 787. Add after bulleted list:
An organization created to promote the candidacy of its pastor to the position of bishop of a church was found to provide impermissible private inurement to the minister. The support of her campaign was found to be advancing her career, which provided a substantial and direct material benefit for her. In what seems a severe result, the IRS found that activity resulting in private inurement failed the operational test so that the organization could not qualify for exemption.
p. 788. Add at end of Income Tax paragraph:
The taxability of “gifts” to ministers from grateful followers can be analyzed according to the IRS by understanding the intention of the giver. The IRS says, “The value of property acquired by gift is excluded from gross income if it:2
- Comes from a detached and disinterested generosity, ...