wfn.org | IRS issues ruling on tax status of deacons

[NewsDesk <NewsDesk@UMCOM.UMC.ORG>]

Dec. 16, 1998	Contact: Joretta Purdue((202)546-8722(Washington
{740}

By United Methodist News Service

In a private letter responding to a request for a ruling, the Internal
Revenue Service has declared that three United Methodist deacons are
clergy for federal income tax purposes. 

The IRS was answering a question posed by three ordained deacons who
serve in a Texas church.  In the private letter ruling released Dec. 10,
the IRS said the deacons were "ministers of the gospel performing
services in the exercise of their ministries" within the meaning of IRS
regulations.

Although the ruling was directed only to these three taxpayers, Mary
Logan, general counsel of the denomination's General Council on Finance
and Administration (GCFA) said she was pleased that the IRS ruling
recognizes the ordination of deacons as well as the ordination of elders
in determining clergy status for tax purposes.

"Every United Methodist deacon should review the ruling in consultation
with his or her own tax advisor," Logan added. She said local churches
and other United Methodist organizations with deacons on the staff need
to be aware of this ruling as well.

The ruling specifies that it applies only to the three individuals who
posed the question and provided specifics of their work. A footnote
contains the information that the original inquiry asked for a ruling on
any ordained deacon that church would employ, but the IRS said it would
have to examine the facts relating to each individual minister.

The private letter ruling was sought as a joint project of GCFA and the
General Board of Higher Education and Ministry to assist deacons and
their church employers. The two agencies plan to develop a question and
answer document for deacons and their church employers to answer
anticipated questions related to the ruling.

Of the three deacons, the ruling found, "As ordained members of clergy
in the Church, (they) conduct worship and assist with the sacraments."
They also "perform service in the control, conduct and maintenance of
the Church." It considers them "to be religious leaders who can perform
substantially all of the religious functions within the scope of the
Church's tenets and practices." 
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