James M. McGaffin III and Deborah McGaffin - Page 5

                                        - 5 -                                         
          insurance.  Beginning with taxable years ending after 1967,                 
          ordained ministers are automatically subject to the self-                   
          employment tax with respect to services performed by them.  Sec.            
          1402(c); see Peverill v. Commissioner, T.C. Memo. 1986-354.                 
               Provided certain requirements are met, section 1402(e)                 
          exempts from the self-employment tax, the self-employment income            
          of certain ministers and others.  Under section 1402(e)(1), a               
          minister must file an application for exemption "in such form and           
          manner, and with such official, as may be prescribed by                     
          regulations".  The application must be filed no later than the              
          due date of the return (including any extension) for the second             
          taxable year for which the applicant had net earnings from self-            
          employment of at least $400, any part of which was from services            
          as a minister.  Sec. 1402(e)(3).                                            
               Section 1.1402(e)-2A(b), Income Tax Regs., specifies that              
          the application must be made on Form 4361, in triplicate, with              
          the specified office of the Internal Revenue Service, within the            
          prescribed time limit.                                                      
               The time limitations of section 1402(e) are mandatory and              
          must be complied with strictly.  Treadway v. Commissioner, T.C.             
          Memo. 1984-153; Allinson v. Commissioner, T.C. Memo. 1979-405.              
          At trial petitioners testified that the appropriate Form 4361 was           
          timely filed by the due date of the return for the second taxable           
          year of petitioner's earnings from performing services as a                 
          minister.  According to petitioner, he filled out a Form 4361 on            




Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011