Resident Alien Minister

[MelanieCPA]

Taxpayer is a resident alien (from Russia) based on the substantial presence test. He has a personal ID # and should get his green card in Summer 08. He worked here in 2006 as a religious worker and received a W-2. He became an ordained minister in March 07, and the (same) employer is now paying him on a 1099.
Question - Can he file a Form 4361 and be exempt from having to pay SE tax or does this even apply to him since he is not a US resident?? Thanks in advance.

[Corduroy Frog]

Wow - that's tough

Melanie, most of us are not going to be able to answer this, but there may be a few board members who know. One of my big stumbling blocks is that we leave tax law and get into social security law, e.g. can this minister even be covered by SS if he wants to??
That leaves us virtually nothing to research as we know it.

Does this guy WANT to be exempted? I believe I would file the 4361 - there's definitely not a lot of precedent for this. Another factor - does this minister work for a church that has an ordination program? If they don't, that does not automatically mean that the minister can't file a 4361. But if they do, and the minister hasn't been ordained, I don't think he can be exempted even if he is an alien.

Tough one, Melanie. I give you an "A" for having the good sense to consult someone other than the IRS for advice. I wish I knew enough to help.

[MelanieCPA]

Thanks...

Thanks for your response Corduroy. Yes, he does want to be exempt! He is ordained. Does it matter what church the ordination came from?? I'm 98% sure it was not through an ordination program sponsored by his organization/church. I will ask him specifically about this. He works for a very small ministry. He travels around the US raising funds for an orphanage in Russia.

[MAMalody]

I have not seen case law on this, however, he appears to fit the guidelines for being able to utilize Form 4361. I would make sure he knows this is a theological based exemption from Social Security and Medicare and not an economic one.

I am actually more interested in the reason the church/religious organization changed him from a W-2 to a Form 1099. That does not appear to make any sense, at this point. By the information available in the posting, it appears that there was no change in duties, only the fact that he received the ordination.

While I don't know all the answers, I do specialize in clergy taxes and would be happy to help here in any way I can. You may contact me direct at ClergyTaxes@aol.com. You should note, that if you contact me directly you will lose the advantage of peer review that this message board makes available.

Have a good day.

Mike

[jainen]

his primary assignment

>>He travels around the US raising funds<<

If this is his primary assignment, I'm not sure it's "ministerial" enough to qualify for the exemption, even if he is ordained. (I also wonder if he is working illegally, since he has apparently not been able to get a Social Security number or a resident alien card, and even his employer took him off the books.)

Further, there is the question MAMalody raised about his religious convictions vs economic desires. It would be an unusual Russian church that was opposed to public insurance for medical care or old age and disability pensions.