I did my taxes this weekend, and once again I was reminded of the significant perks which our government gives ordained ministers. If the government is serious about closing loopholes it should probably look at the breaks it gives us. Housing allowance saves me a lot of money each year, and I could save bushels more if I opted out of social security. But I won’t because I believe doing so is dishonest and dishonors the gospel of Jesus Christ.
IRS publication 517 states that an ordained minister may opt out of paying social security taxes if 1) “You are conscientiously opposed to public insurance because of your individual religious considerations” and 2) “You file for other than economic reasons.”
Nearly every minister who opts out, and there are many, does so precisely for economic reasons. If social security was paying 50% annual returns, how many would keep their objection to it? My uncle is a C.P.A., and he told me that he did the tax return for an Amish man who received a social security check for time he worked in a job that deducted payroll taxes from his salary. The man returned the check to the government because he didn’t believe in public insurance. That man has a conscientious objection. If you wouldn’t return the check, then you can be sure that you don’t.
Russell Moore wrote eloquently on this topic last week, and he observed that you are a conscientious objector if, like pacifists objecting to war, you would choose jail rather than pay into social security. If not, then you are faking your objection, using a loophole in the law that the government graciously intended for folks like the Amish.
Several years ago I heard financial expert Dave Ramsey encourage ministers to opt out of social security because of the “moral objection” that the government was mishandling their money. I wrote Dave to object. I don’t know if he ever received my letter (I’m sure that correspondence must go through several levels to get to him), and as far as I know he is still giving the same advice. Now that I have a blog, I’ll post the letter here.
As a frequent listener to your radio program, I appreciate the common sense and good humor that you bring to your financial advice. You are doing a lot of good for a lot of people.
However, I urge you to reconsider the counsel you often give ministers who are contemplating opting out of the social security program. IRS publication 517 states that a minister may opt out of social security if he is “conscientiously opposed to public insurance because of [his] individual religious considerations.” The very next point explicitly states that “economic reasons” do not qualify (pages 3-4).
Thus, when you encourage ministers to opt out of social security on the “religious” grounds of stewardship (you can invest your money better than the government) rather than a principled objection to public insurance (such as an Amish person might have), you are unwittingly advising ministers to break the law.
This has implications for the integrity of the minister and the testimony of Christ’s church. What would people think, especially those outside the church, if they knew that the same pastor who preaches honesty, sacrifice, and love for Christ above all lied to the government in order to save money on his taxes? If the national media should ever catch wind of this, it would be a scandal for sure. And what would be our defense—that we do have religious objections to social security, so long as you allow us to define “religious” as poor stewardship rather than opposition—on principle—to public insurance? We who criticized Bill Clinton for his disingenuous equivocation on the verb “is” should know better.
I wish I could sign Form 4361, as I paid a lot of money in self-employment taxes last year. But as I am sure you would agree, this is a small price for my integrity.
May God continue to bless your ministry,
End of letter and one final thought: I don’t think I know anyone who has what the IRS calls a conscientious objection to social security. But for argument’s sake let’s say that Pastor Jones of First Baptist Church has convinced himself that he does. Pastor Jones would still have the problem that many people, if they knew that he had opted out, would assume that he was doing so for economic rather than moral reasons. In this case he would still run the risk of bringing disrepute upon the gospel, which is not worth the thousands of dollars he saves each year. Sometimes perception is reality.