Rev. Rul. 55-243

Advice has been requested whether services performed by ordained, commissioned, or licensed ministers as heads of religious departments or as teachers are administrators on the faculty of a college are excepted from `employment' under section 1426(b)(9)(A) of the Federal Insurance Contributions Act (subchapter A, chapter 9, Internal Revenue Code of 1939). Similar advice has also been requested relative to services performed by an ordained, commissioned, or licensed minister as `Chaplain and Professor of Religion' at the college.

Section 1426(b) of the Federal Insurance Contributions Act contains the following exception from the term `employment,' for purposes of the taxes imposed under the Act;

(9)(A) Service performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; * * *

Revenue Ruling 55-242, page 489, this Bulletin, relates to services performed by ordained ministers as teachers and administrators on faculties of theological seminaries under oral agreements which provide only that they will receive such rights, privileges, and benefits as the seminary's policies provide for one holding that specific position and holds that such services are excepted from `employment' under section 1426(b)(9)(A) of the Act. This result is based upon the conclusion that theological seminaries are religious institutions of learning, dedicated to the training and education of ministers in the propagation of religious principles and ideals, and, hence, that the services performed by ministers as teachers and administrators at such seminaries fall within the scope of section 408.215 of Regulations 128, which provides:

Ministers of churches and members of religious orders. Services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, or by a member of a religious order in the exercise of duties required by such order, are excepted from employment. The duties of ministers include the ministration of sacerdotal functions and the conduct of religious worship, and the control, conduct, and maintenance of religious organizations (including the religious boards, societies, and other integral agencies of such organizations), under the authority of a religious body constituting a church or church denomination.

The Internal Revenue Service holds generally that services performed by ordained ministers as heads of religious departments and as teachers and administrators on the faculty of a college or university which, although not basically a religious institution, is an integral agency of a religious organization under the authority of a religious body constituting a church or church denomination, are in the exercise of their ministry and are excepted from `employment' under section 1426(b)(9)(A) of the Federal Insurance Contributions Act. However, in the instant case the Service has accepted as facts the representations which support a conclusion that although the college is an institution of the M state convention such convention is not a religious body constituting a church denomination. Therefore, it is held that services performed by ordained ministers as heads of religious departments as distinguished from schools of theology, and as teachers and administrators on the faculty of the college whose specific duties involve no ecclesiastical functions, such as the conduct of religious worship, are not excepted from `employment' under the provisions of section 1426(b)(9)(A) of the Federal Insurance Contributions Act.

An ordained minister is engaged by the college primarily as a chaplain and serves as `Chaplain and Professor of Religion' with a specification of duties embracing the ministration of sacerdotal functions and the conduct of religious worship. He is responsible for planning the chapel programs each Sunday and on one other day in each week and is required to preach at approximately one-half of the Sunday services. He is also responsible for the religious counseling of students and for supervising generally all religious activities on the campus. He devotes approximately one-half of his time to teaching, including a course in religion.

Mimeograph 6633, C.B. 1951-1, 106 (which prescribes rules to determine whether the services of a duly ordained minister of a church are performed `in the exercise of his ministry' within the meaning of section 1426(b)(9)(A) of the Federal Insurance Contributions Act), provides, in subparagraph (a), paragraph 5, that services in the conduct of religious worship or in the ministration of sacerdotal functions are `in the exercise of the ministry' whether or not they are performed for a religious organization.

Since the duties imposed upon the instant chaplain, i.e., the teaching of religion and the performance of admittedly ecclesiastical services considered in their entirety are not susceptible of segregation into two separate and distinct categories, section 1426(c) of the Federal Insurance Contributions Act, which relates to included and excluded services is not applicable. Accordingly, it is held that services performed as `Chaplain and Professor of Religion', in the circumstances stated are performed in the exercise of the ministry within the contemplation of Mimeograph 6633, supra , and are therefore excepted from employment under section 1426(b)(9)(A) of the Federal Insurance Contributions Act