(Editor’s comments: In 2004 the we published an article in the Trumpet, Pastors Must be Ordained by the IRS. We also used this theme as Chapter 12 in my book The Trail of Blood Revisited. We remember how many scoffed at our conclusions. Well here is the most prolific Church Tax advisor in the nation today that is telling pastors in no uncertain terms, that if they want their goodies they must be ordained by the IRS. Read it and weep.

Raul Rivera – December 12, 2014 09:57AM

Do not let the Christmas season distract you from time sensitive tax issues!

This time of year, pastors and leaders get caught up in the wonderful Christmas season and enjoy weeks of celebrations, plays and time with family. I personally love Christmas and make every effort to create precious memories with my wife and children. I love to read Christmas stories out loud to the family by the fire, decorating the house inside and out, and cooking plentiful meals for friends and family in our home. Christmas truly is the most wonderful time of the year. As a pastor, I always led the charge to make sure we had an annual Christmas play at our church. It was so exciting building the props, setting up the stage and seeing the congregation bring the Christmas story to life. My wife and I have so many wonderful memories from Christmas past; working late nights and early mornings to make sure everything at the church was picture perfect.

With all of that said, many pastors neglect to pay attention to a few small things that could cost them and their churches, and even members, thousands of dollars. After reading this article, it may be that you need to set aside time to focus on some things that need to be accomplished before the year comes to an end.

Get Legally Ordained

Thousands of ministers will allow the tax year to come and go without becoming legally ordained. There are several reasons why you should make every effort to ensure that you are legally ordained. Under the rules of section 1402, if you are ordained any time this year for the purposes of self employment taxes, the IRS will approve your exemption retroactive to January 1 of this year. Let me give you two real life examples.

1. Pastor XYZ, has been receiving a salary all year long. By years end, he will have received approximately $13,000.00 from his church. This salary came from love offerings, regular pay and a few weddings. His church is young and small, he hasn’t paid much attention to his taxes all year long, and though everyone at the church calls him pastor, he has not gone through a formal ordination process. After speaking with him for about 20 minutes and explaining our eight step process to ensure legal ordination with the state and IRS, he decides to use our method to become legally ordained. He now qualifies to apply for self employment tax exemption. We prepared Form 4361 for him and sent it off to the IRS. When the IRS approves his exemption, it will be retroactive to January 1, 2009. This means that he will not have to pay the self employment tax of $1989.00. If Pastor XYZ would have waited until after the new year, he would have to pay the $1,989.00 in taxes, but because he was ordained before December 31, he can now count on a retroactive exemption date of January 1, 2009 and will save big on taxes.
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2. This time of year many pastors receive special Christmas love offerings. These offerings come in many shapes and sizes. They range from cash offerings to tangible gifts. Under the requirements of section 6011, pastors are required to report such love offerings and must pay the income and self employment tax on it. Therefore, even if you do not expect to be on salary, you need to make sure you are legally ordained by your church or ministry before the year ends just in case you receive a blessing from your church this holiday season.

Taking care of these small details means you are being a good steward over your church. 1 Corinthians states that it is “required of a steward that he be found faithful.” Do not let these simple details go unattended.

We Can Teach You the 8 Step Process for Ordination

To learn the 8 step process, we recommend you attend one of our conferences. We spend ample time walking you through each of the steps. Please take a look at our conference schedule and consider attending.

About the Author

Church Planter. Speaker. Author. CEO. Raul Rivera has had ample experience in the church planting world. His current venture, StartCHURCH has helped 1000’s of churches get started on the right legal foundation. Raul has compiled an array of manuals and software tools that help churches stay compliant with the IRS. He also hosts over 35 national conferences per year, training Pastors on how to launch their church legally. Raul is married to his wife Genel, and they and their five children live in Atlanta, GA.