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The answer is significant because it affects how an individual reports compensation and pays taxes. Perhaps the greatest single issue this affects is how to report the value of housing provided and/or the amount of housing allowance paid.

The Church of the Nazarene has several different classifications of ministry designations. They are separated on the basis of one or more of the following criteria: experience, training, and calling. Likewise, the United States government has tax laws especially applicable to “ministers.” However, not everyone who might be recognized as a “minister” by the Church would be considered as such by the tax laws. It is the responsibility of the ministerial employee, as well as the church employer, to comply properly with such laws and regulations. The question “Who is a minister for tax purposes?” then is significant. To answer this question, answers are needed to related questions such as: Who do the IRS and tax courts consider to be a minister? To whom does the Church of the Nazarene give authority to perform these “recognized” duties of a minister?

The IRS Definition

The Internal Revenue Service uses the term “Minister of the Gospel” and, in the Income Tax Regulations, elaborates that a minister is one who is “duly ordained, licensed, or commissioned” and who performs service in the exercise of his or her ministry. This includes the ministration of sacerdotal functions, the conduct of religious worship, and the control, conduct, and maintenance of religious organizations (including integral agencies) under the authority of a church denomination.

See Memo #12 - Who is a Minister for Tax Purposes? for more details.