Ministers Can Reduce Their Tax Burden


The occupation of a Minister is unique and as such it is the only occupation that carries dual status with the Internal Revenue Service. The Minister is an employee for Federal Income Tax purposes, but is self-employed for Social Security purposes. For this reason, Ministers should be very cautious as to whom they allow to prepare their annual income tax returns.


Although many Ministers have been indicted and imprisoned for violating tax law, they unfortunately are unaware of the many legal benefits the IRS allows, including some that are tax-free for those who meet the ordination requirements of the IRS four-level system. These benefits are not available to the average tax payer. The IRS will not automatically apply these deductions to ministers without the Ministers properly claiming them on their returns.


In a Church Management & Tax Conference not long ago, I was approached by the regional vice-president of a major Income Tax Preparation firm. This vice-president and the spouse, who was a Minister, had always had that firm do their income tax return. Once I taught on these benefits, that vice-president relayed to the spouse, “My firm is never doing our tax returns again. I had no idea of these benefits.”


Local CPAs May Be Costing You


Local Certified Public Accountants are great for that which they are trained and designed – accounting services for local small businesses and regular employee tax returns. Unfortunately, they, and other standard Income Tax Preparers have little clue as to properly preparing the return for a Minister. Chitwood & Chitwood, America’s foremost expert on Church & Clergy Tax Law, prepares multiplied thousands of Ministers’ tax returns each year. In addition, we review returns from other preparers. Of the returns prepared by others, Chitwood & Chitwood, usually discovers many allowable deductions that were overlooked, thereby costing the Minister thousands in unnecessary tax liability.


Many CPAs only receive the minimum Continuing Professional Education hours to maintain certification. They are busy preparing small business returns, doing audits, and negotiating loans, among countless other duties to fund their own livelihood. However, the CPAs and Tax Attorneys of Chitwood & Chitwood spend hours each month in research and training to stay abreast of all of the latest Church and Clergy Tax Laws – this is what we do! The thousands of dollars we spend monthly for training and research, and our 77 years of experience dedicated to Churches and Ministers, are what set us apart from the rest of the field.


The Catch


The Tax Preparer should know what deductions are available to the Minister and the how they should be legally applied.


If the Preparer is ignorant of those deductions to which the Minister is entitled, the Minister could end up paying thousands of dollars in tax payments that he or she was not legally required to pay.


By the same token, if the Preparer allows deductions to which the Minister is not entitled, or is unable to substantiate the deduction with the necessary required documentation, the Minister could conceivably be liable for thousands of dollars in interest and penalties.


To encapsulate the above three paragraphs, the Minister loses either way. This is why it is VITAL for Ministers to only allow their tax returns to be prepared by those who have the proven track record that can maximize the return and minimize the liability without repercussions to the Minister.


66 Allowable Reimbursements


The firm of Chitwood & Chitwood is aware of four little known codes in the Internal Revenue Code Section that are game-changers for Ministers. After that Tax Preparation vice-president learned of our knowledge to save them on their return, both retained us, and has sent us previous returns for review.


Always remember: “It’s not what you know that will hurt you – It’s what you don’t know!” Are you SURE, without fear or reservation, that the local CPA or Tax Preparer who completes your return is performing for you at the ultimate level? If there is any question in your mind, you should contact us immediately at 800-344-0076, or visit us at for more information.


Why take the gamble of paying too much because of available deductions which you did not use, or paying penalties and interest for claiming that which was not allowed? Take control of your tax future today. We are here for you and are ready to work diligently on your behalf.