Who is a minister for federal tax purposes? The tax court's 5-factor test
Who is a minister for federal tax purposes? The Tax Court ruled in 1987 that a minister is one who:
- Administers sacraments
- Conducts religious worship
- Has management responsibility in a local church or religious denomination (control, conduct, or maintenance of a religious organization)
- Is ordained, commissioned, or licensed, and
- Is considered to be a religious leader by his or her church denomination
In 1989, the Tax Court ruled that only the fourth factor is required (ordained, commissioned, or licensed) and that a balancing test should be applied with respect to the remaining four factors. This more flexible test was adopted by the IRS in its audit guidelines for ministers.*
*Excerpt from the Church & Clergy Tax Guide, 2006 edition by Richard R. Hammar, J.D., LL.M., CPA
|
