Are You Really Legally Ordained

Written by Founder Raul Rivera on Apr 23, 2009 in IRS Compliance

We, at StartCHURCH, have always encouraged every church in America to have its own licensing and ordination program. Whether your church has been around for many years or is a brand new start up, we believe that part of the stewardship of running a ministry is the proper (legal) ordination of those whom the Lord sets apart for the ministry. Because our society has an established set of beneficial laws regarding the ordination of ministers of the gospel, as a matter of operating our ministries with excellence, we ought to take advantage of them.

For example, legally licensed or ordained ministers of the gospel have the right to perform marriages and funerals and to become chaplains in local correctional facilities and schools. Additionally, special tax breaks such as Housing Allowance, deferred compensation and self employment tax exemption can make a minister's income become mostly, if not completely, tax free.

However, many churches are nowhere close to being compliant when it comes to the licensing and ordination of ministers. While every church can create its own licensing and ordination program, the state and the IRS have the right to determine whether the ordination of a minister qualifies him or her to perform marriages or receive special tax benefits. Many ministers have done their tax returns with the assumption that they are ordained and eligible for benefits as a minister, even though they may not necessarily qualify. In order for the IRS to consider the ordination of a minister as valid, the church must make sure that certain requirements are met. We have identified at least 8 requirements that we believe should be met in order to make sure that your church's ordination of ministers meets all State and federal requirements for tax purposes. Today we will focus on one very important step: the language that needs to be stated in the church's articles of incorporation. A tax court rejected the license of a minister because the church that ordained him did not have any language in its articles of incorporation stating that it would license ministers of the gospel. In its conclusion, the court believed that in the absence of such language in the articles of incorporation, the church was simply engaging in a paperwork procedure just to get him a tax benefit. Now is a good time to look at your church's or ministry's articles of incorporation and check to see if there is language that states that your church will "license and oversee ministers of the gospel." If that language is missing, we strongly recommend that you amend your articles of incorporation to add it to your purpose statement.

We believe that the 8 steps are so important that we dedicate the first hour of every Church Management Conference to this topic.

Please feel free to comment. We always appreciate good dialogue. However, we do moderate each comment to ensure that it is on topic and not derogatory to other participants. We ask that you keep your comments brief and pertinent to the topic so that others may benefit.

Blessings,
Raul Rivera


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