Ordination, Minister’s License
& Tax Breaks
Save on taxes!
Get Ordained!
Consider these examples:
- Steven thought he was called to the
ministry but after a year at Bible college he
dropped out and got a job in his home town selling satellite dish TV to
people. He’s good with computers
and helps at church where his dad is pastor. In fact he now works part time at the
church developing videos and PowerPoint presentations for his church’s
worship team. On his father’s
urging he went to his district’s committee seeking credentials as a
minister “because dad tells me the church can then pay my part time salary
as housing and I can get a tax break.”
Steven’s district committee will soon interview him.
- Robert has been a math teacher in the
public schools for 18 years then spent the last 11 years teaching in his
local Christian school that is sponsored by his church. He’s coming up for retirement in a few
years and heard from another teacher at a conference last month that he might
be able to become commissioned by his denomination and then he could roll
over some of his retirement money into the denomination’s pension fund and then he could collect that
pension and use it for housing tax free.
Robert says, “ I gave devotions every day
of the year in my classes, and some of them were certainly better than
what I hear on some Sundays.”
Robert has started taking “a few courses they require” so he can be
a commissioned minister, thinking he will then get a good tax break in
retirement. He does not intend to
pastor a church or work on staff—but he believes, “the less money good
Christians give the government the better.” Robert will soon have the required
courses for commissioning.
- Janet is a single mother who found the
Lord after she and her husband split.
She works as the church secretary at Trinity church and has been a
faithful full time church worker for nine years. Her pastor recently recommended that she
begin taking her denomination’s correspondence course “so you can move
toward ordination and get the tax breaks on your housing like the rest of
us do.” The pastor nodded
encouragement to her and said, “You have a ministry every bit as important
as any of the other staff around here.” Janet was not sure about becoming a
minister just to get the housing benefit so she called her brother in Ohio
asking him what he thought she should do.
Her brother is an Anglican priest.
- Mike, a father of three kids, owned his
own contracting business and had always been very involved in his local
church. It seemed like perfect
timing when the church had an opening for a youth worker just at the time
when the recession hit so hard he lost his business. Mike started full time youth work at the
church last year. He had no plans
to be ordained but he discovered at a seminar that he could get a $4000
tax break if he did get licensed and the church designated as housing
allowance what he was now paying for the large house he built when he was
a contractor. All of Mike’s family live in his town, and Mike never intends to move
to another town or church—if his local church can’t hire him on staff he
will “do something else—who knows what.” Mike is coming up for initial licensing
next week at his district’s ministerial credentials committee.
- Edward is president of a Christian college
and “speaks at churches quite often.”
He is approaching retirement and heard from a denominational
official that he can roll over some of his retirement accounts into the denominational
pension plan and take a half down mail order courses and become a
commissioned church worker so that the pension amount coming from his
denominational pension plan can be considered housing allowance. Edward is
taking the courses quickly before he retires so he can dodge the taxes,
but he never really intends to pastor a church.
What would you do in each of these cases? Is it OK for a church to ordain people who
want ordained to reduce their taxes? Here’s
what I think: I think it is simply
Simony for the church to sell the sacred rite of ordination so people can dodge
taxes. But there is one good thing about
this sordid and unethical practice—it is going to eventually end the special treatment
ministers get on their taxes for housing. If you are a layman and never heard of this—if
a person is a priest or minister and live in a manse for free you don’t have to
pay taxes on this value received (same with military personnel). Since priests and parsonage pastors don’t
have to pay on their supplied housing then the IRS
also considers that benefit to also apply similarly (with some limitations) to
ministers who get a housing allowance. It is like a thousand other special
deals in the tax code like the mortgage exemption, or not paying taxes on contributions
to the church, or a deduction for business lunch or advertising—the congress just
decides to give certain breaks. When
people start abusing them sooner or later they will simply cancel them
all. How do you know it is an
abuse? In my opinion if you are getting
ordained to save taxes it is outright unethical… shame on you. But you do serve one purpose—by your unethical
actions you might hasten the day when the congress cancels this tax break for
ministers—there is no reason why ministers should get a tax break, and priests
who take no salary and live in a free manse should pay taxes on that value too—and
the Catholic church should
cough up the money to pay their taxes.
And, while I’m at it—I also favor tossing out the mortgage deduction, the
health deduction, and all deductions for contributions too…NONE of these are
anything more than subsidies to favorite behaviors of government. (and I won’t even go into the huge number of tax breaks
governments gives businessmen, especially landlords. But, back to the central topic… if you are
getting ordained to save on taxes, shame on you!
That’s what I think.
So what do you think?
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So
what do you think?
To
contribute to the thinking on this issue e-mail your response to Tuesday@indwes.edu
Keith Drury
October, 2002. May be
duplicated for free distribution provided these lines are included.
Other
"Thinking Drafts" and writing by Keith Drury -- http://www.TuesdayColumn.com
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