Internal Revenue Service
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 Rev. Rul. 77-87

1977-1 C.B. 266

Section 1402

IRS Headnote

Exemption; minister; time for filing application. A minister who in 1973 and 1974 had net earnings from self-employment of $400 or more, some of which was from the performance of ministerial services, and during 1976 filed Form 4361 applying for exemption from the self-employment tax is not entitled to the exemption under section 1402(e) of the Code.

Full Text

Rev. Rul. 77-87

Advice has been requested whether, under the circumstances described below, a minister is entitled to exemption from self-employment tax under section 1402(e) of the Self-Employment Contributions Act of 1954 (chapter 2, subtitle A, Internal Revenue Code of 1954).

The minister had no earnings from self-employment before the year 1973. In both 1973 and 1974 the minister had net earnings from self-employment of $400 or more, some of which was from the performance of ministerial services. The minister filed income tax returns for those years before April 15, 1974 and April 15, 1975, respectively. During 1976, the minister filed a Form 4361, Application for exemption from Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners.

Section 1402(e)(1) of the Act provides that ministers may file an application for exemption from self-employment tax (Form 4361) together with a statement that either they are conscientiously opposed to, or because of religious principles are opposed to, the acceptance (with respect to services performed by them as ministers) of any public insurance that makes payments in the event of death, disability, old age, or retirement or makes payments toward the cost of, or provides services for, medical care. The Form 4361 contains a similar statement.

Section 1402(e)(2) provides that any such application must be filed by the later of (1) the due date of the return (including any extension thereof) for the second taxable year for which the minister has net earnings from self-employment of $400 or more, any part of which was from the performance of service in the exercise of the ministry or (2) the due date of the return (including any extension thereof) for the minister's second taxable year ending after 1967.

The second taxable year for which the minister had net earnings from self-employment of $400 or more, at least part of which was from the performance of services in the exercise of the ministry, was 1974. Since the minister did not file a Form 4361 by April 15, 1975, the due date for the 1974 income tax return, the minister is not entitled to exemption from self-employment tax under section 1402(e) of the Self-Employment Contributions Act of 1954.