Minister Waivers - Qualifying taxpayers may file for an exemption from:

This IRM contains instructions for evaluating and processing these forms.

For the Minister Waiver program:

The Director, Small Business/Self-Employed (SB/SE), Exam Field and Campus Policy is the executive responsible for the Minister Waiver program.

Management officials are responsible for:

Inventory is monitored through the use of the Control-D reporting system.

Religious Waiver - Religious waivers are requests for exemption from social security and medicare taxes and are filed with the IRS using:

The following acronyms apply to this IRM:

The following additional resource material is listed when it is determined in-depth research is required to resolve unusual technical issues not covered in this IRM. When reference to one of the related IRMs; is required, the complete IRM reference will be stated in this IRM.

Even though the IRS strives to improve its systems and provide better service, some taxpayers still have difficulty in getting solutions to their problems or appropriate responses to their inquiries. The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate. Its job is to protect taxpayers’ rights by striving to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer bill of Rights (TBOR). TAS offers free help to taxpayers, including when taxpayers face financial difficulties due to an IRS problem, when they are unable to resolve tax problems they haven’t been able to resolve on their own, or when they need assistance to address an IRS system, process, or procedure that is not functioning as it should. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

The Taxpayer Bill of Rights (TBOR) lists rights already existed in the tax code putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with Taxpayer Rights. For additional information about TBOR, see https://taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights.

Under the Right to Quality Service, taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels.

Refer taxpayers to the Taxpayer Advocate Service when the contact meets TAS criteria See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria or when Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), is attached and steps cannot be taken to resolve the taxpayer’s issues the same day. Also see IRM 13.1.7.5, Same Day Resolution by Operations, when making a TAS referral, use Form 911. and forward to TAS in accordance with your local procedures.

Minister Waiver cases are assembled into batches.

Activity Codes and/or IDRS History Items provide an audit trail for case processing. See Exhibit 4.19.6-1, Activity Codes for Minister Waiver Processing, for more information.

When inventory is assigned to the tax examiner, verify there is a case for every TIN listed on the Batch TIN Listing. If a case is missing or there is an extra case NOT on the Batch TIN listing, see IRM 4.19.6.3.1.1, Lost and/or Extra Cases, for more information.

Whenever an action is taken on the case, update the IDRS Activity Field and/or Status Code, as appropriate. See Exhibit 4.19.6-1, Activity Codes for Minister Waiver Processing, for more information.

No tax information can be sent to or discussed with an unauthorized third party. All correspondence should be sent directly to the taxpayer. Include a paragraph to notify the taxpayer we have no record that the third party is authorized to act for them, and we have replied directly to the taxpayer.

Accountants, attorneys, enrolled agents, or other representatives from whom a taxpayer has requested assistance on tax issues submit inquiries to the IRS. The third party representative expects a reply to the inquiry so the issue can be explained to the taxpayer.

To authorize the third-party reply, the representative may submit a:

POA/TIA documentation received with Form 4361 (or Form 4029) are considered "specific use" (not related to a specific tax period) and are not recorded on the Centralized Authorization File (CAF) system. To ensure valid POA/TIAs are recognized, they should be kept with the case file.

Each Form 2848 or Form 8821 must be validated before being accepted. The form must be signed by the taxpayer. Immediately reject any unsigned Form 2848 or Form 8821 and return to the taxpayer.

In addition to the required signature, a valid Form 2848 or Form 8821 also contains:

If a Form 2848 or Form 8821 is determined to be invalid, return it to the taxpayer with an explanation.

When issuing correspondence to a taxpayer with a valid POA/TIA (that is authorized to receive correspondence), generate a copy of the correspondence to the POA/TIA.

If the taxpayer submits a complete Form 2848 or Form 8821, check to see if the authorization is on file. If the authorization is not on file, fax the form for processing based on the state mapping table in IRM 21.3.7-1, State Mapping Where to File, and keep the original with the case file.

Taxpayers residing in a ZIP Code located in a designated Federal Emergency Management Agency (FEMA) Declared Disaster area will have a disaster related Freeze Code posted to their account. There are two types of disaster freeze codes, the "–O" freeze and the "–S" freeze.

The Technical Coordinator/Lead will monitor ZIP Codes for specific declared disaster area situations as necessary based on IRS Disaster Relief Memos.

The Technical Coordinator/Lead will provide the tax examiners instruction for the states with declared disasters.

Additional information (including special case handling requirements) is provided at www.tris.irs.gov/fema/.

Take the following action based on the application type, the disaster type and the timing of the submission:

Consider any requests for additional time to provide information, based on the taxpayer self-identifying as having been impacted by the disaster on a case-by-case basis. (example includes: a disaster Freeze Code is not present on the account).

OFP codes are used in preparation of the business operating divisions work plans/work schedules. This data shows historic staff-hour and volume usage. Because of the many uses for this data, it is imperative reporting be as accurate, consistent and error free as possible.

Organization, Function, and Program (OFP) codes are recorded on Form 3081, Employee Time Report, to identify Minister Waiver programs IRS employees perform daily.

Except as otherwise instructed, take the following actions when processing Form 4361:

Form 4361 are filed in triplicate. Maintain completed original copy of Form 4361 in a permanent file.

You may send photocopies to Internal Revenue Service offices on request.

If you have any questions about releasing the Form 4361 information, contact the Disclosure Office at https://irsgov.sharepoint.com/sites/ETD-KMT-KB003 for additional information.

You may accept a timely filed letter in lieu of a timely filed Form 4361:

Complete all Campus research and processing BEFORE corresponding for the taxpayer’s signed declaration. This allows you to identify other items needed in order to process the Form 4361. This research includes checking both the online CAF (IDRS Command Code CFINK) and the RAF (IDRS Command Code RFINK) as well as the paper file for either the Form 8821 or the Form 2848 to ensure that copies of all letters go to the taxpayer’s representative.

Input all necessary information in query database from the Form 4361 paper documents.

Five criteria must be satisfied before the application can be approved:

Form 4361 must be filed by the due date (including any extensions) of the income tax return for the second taxable year in which applicant has self-employment income of $400 or more, any part of which was from the performance of services in the exercise of his ministry.

Taxpayer enters years they have earnings from self-employment of $400 or more on Line 5 of Form 4361. It is possible only one entry will be made, or entry may not be for a recent year.

A minister may apply for exemption from self-employment tax upon changing churches and beliefs. A minister who is ordained by a second church and who previously was not conscientiously opposed to the acceptance of public insurance can qualify for the self-employment tax exemption, by claiming exemption within the prescribed period after the second ordination.

Consider the Form 4361 timely filed when:

DO NOT consider the Form 4361 timely filed when there are two years indicated on Form 4361, line 5 AND the later year is not current. See IRM 4.19.6.4.9, Disapproving Form 4361, for more information.

When Form 4361, line 5 contains only one year and the year indicated is not current, research IDRS CC:IRPTRL for the type of earned or self-employed income the taxpayer received (for example: Wages on Form W-2 or Non-Employee Compensation on Form 1099-NEC) and IDRS CC:RTVUE for indication that the applicant filed either Form 1040, Schedule C with self-employment income of $400 or more or Form 1040, Schedule SE claiming self-employment tax was reported since the year(s) indicated on Form 4361, line 5.

If Form 4361 is not received timely, disapprove the application. See IRM 4.19.6.4.9, Disapproving Form 4361, for additional information.

Consider Form 4361 complete under the following circumstances:

If Form 4361 is not complete:

To qualify for exemption, the minister must be ordained, licensed, or commissioned by an organization:

A copy of exemption letter issued to organization by Internal Revenue Service, or a letter signed by an individual authorized to act for organization, stating the organization meets requirements is sufficient to establish the organization qualifies.

If the taxpayer’s organization falls under the umbrella of a broader organization (for example: Baptist Churches in the United States) and the taxpayer’s organization does not have an EIN, the taxpayer will not be required to have an entry on Form 4361, Line 4 (EIN).

Consider the Organization as "qualifying" when the name listed on Form 4361, Line 4, is included in the following:

If the taxpayer did not include a copy of an IRS exemption letter issued to organization (or a signed affidavit stating organization meets requirements) or the organization is other than those listed in (4) above, research the organization name using IDRS CC: INOLES, and CC: BMFOLO, to verify tax exempt status of the ordaining religious organization. The organization must have the following codes to qualify for tax exempt status:

See IRM 4.19.6.4.6, Religious Orders, for additional information on criteria needed to determine if a religious order qualifies for exemption.

Disapprove the Form 4361 when a determination cannot be made after performing research and contacting the taxpayer. See IRM 4.19.6.4.9, Disapproving Form 4361, for additional information.

Rev. Proc. 91–20, 1991–1 C.B. 524, provides guidance in determining whether an organization constitutes a "religious order" under the IRC. Remuneration for services performed by members of qualified religious orders in the exercise of duties required by their orders may be exempt from FICA tax, self-employment tax and federal income tax withholding.

The term "religious order" is not defined in the Code or Regulations. Organizations and individuals may request rulings from the IRS on whether they are religious orders, or members of a religious order, for FICA, self-employment and federal income tax withholding purposes by following procedures in Rev. Proc. 20XX–1 (updated annually). Also, individuals may apply for exemption from self-employment tax as members of religious orders by filing Form 4361.

When the taxpayer files Form 4361 stating they are a member of a religious order AND includes a copy of a private letter ruling issued by the IRS stating the organization is a religious order, the private letter ruling is considered sufficient evidence the organization is a religious order.

If the taxpayer files a Form 4361 stating they are a member of a religious order without a private letter ruling, determine whether the taxpayer is a member of a qualified religious order. Research the information provided on Form 4361, Line 4 to see if the religious order is part of a qualifying organization. See IRM 4.19.6.4.5, Does the Organization Qualify?, for additional information. If your research is inconclusive, issue Letter 287C and request the taxpayer provide either a private letter ruling or give detailed information based on Rev. Proc. 91-20 criteria:

As part of the Form 4361 approval process, you must obtain the taxpayer’s signature declaring they understand the grounds for the exemption. Before requesting the taxpayer’s signed declaration:

Issue Letter 287C and:

If by the 60th day after issuing the Letter 287C, the taxpayer has not provided the declaration statement, issue a follow-up Letter 287C:

Take the following actions based on taxpayer response to Letter 287C:

DO NOT disapprove Form 4361 when the taxpayer did not provide the signed declaration statement. If no response is received by the end of the Letter 287C suspense period:

Generally, if all five criteria are met (see IRM 4.19.6.4.2, Criteria for Approving Form 4361, for more information), approve the application. Process the approval as follows:

Exemption begins at ordination or commissioning if Letter 287C, Minister’s Waiver (Form 4361) Incomplete or Missing, the declaration was signed and mailed within the initial time frame allocated in the correspondence issued to the taxpayer.

Update IDRS with the applicable actions. See IRM 4.19.6.4.10, MINISTER-SE-TX-EXEMPT-CD Form 4361, for additional information.

The Form 4361 will be disapproved when:

Take the following actions when disapproving the Form 4361:

DO NOT disapprove the Form 4361 when the taxpayer did not provide the signed declaration statement. If no response is received by the end of the Letter 287C suspense period, see IRM 4.19.6.4.7, Form 4361 Declaration Statement Verifying the Grounds for Exemption and Response to Declaration Request, for additional information.

Enter IDRS CC: ENMOD, followed by CC: ENREQ, which becomes CC: INCHG, which indicates "MIN-SE-TX-EXEMP-CD" , using TC 016, Doc Code 63 for each approved or disapproved Form 4361. If TC 000 is also being input, use Posting Delay Code 1 to input the TC 016 with one cycle delay.

Input the appropriate code as follows:

Input the code on the SSN of the Form 4361 applicant, even if that person files as a secondary filer with another number. The code is then reflected on the entity of the applicant in case the taxpayer later files alone or with another spouse.

The following sections provide guidance for situations and/or taxpayer responses after the original Form 4361 was processed.

Form 4029 is:

If the SSA approval section on Form 4029is not completed, immediately forward to SSA at the following address:
Social Security Administration
Security Records Branch,
Attn: Religious Exemption Unit
P.O. Box 7
Boyers, PA 16020

Taxpayers waiting on a Form 4029 approval must inform their employers to continue to withhold and pay their share of Social Security and Medicare taxes.

For employer and employee submissions, the effective date is the first day of the first quarter, after the quarter in which the application was received or the USPS postmark date whichever is earlier. It lasts as long as both employer and employee continue to meet requirements. Exemption is effective for non-employee individual for the first year the taxpayer met the requirements.

Note on all copies of Form 4029 whether application is approved or disapproved and stamp/date with Director's signature. Distribute copies of completed Forms 4029 as follows:

Update IDRS with the final determination. See IRM 4.19.6.5.4, MINISTER-SE-TX-EXEMP-CD Form 4029, for more information.

Input all necessary information in query database from the Form 4029 paper documents.

When a loose copy of a processed Form 4029 is identified, research IDRS CC: IMFOLE to confirm the applicable Minister Self-employment (MINISTER SE CD) Code is present. If present, take no further action. If the code is not present, contact SSA for confirmation they approved the application.

If a loose unprocessedForm 4029 is received, forward it to SSA. See IRM 4.19.6.5.1, Form 4029 - Procedures, for additional information.

When an individual signs Form 4029 the jurat criteria includes an agreement the individual will notify the Internal Revenue Service within 60 days of any event resulting in the individual leaving the religious group described in the Form 4029, or in the individual disavowing the established teachings of the group.

If you receive correspondence or a copy of Form 4029 where the taxpayer is informing the IRS they have left their religious group or disavowed the established teachings of the religious group, process the request as follows:

Enter IDRS CC: ENMOD, followed by CC: ENREQ, which becomes CC: INCHG which indicates MIN-SE-TX-EXEMP-CD, using TC 016, Doc Code 63 for each approved or disapproved Form 4029. If TC 000 is also being input, use Posting Delay Code 1 to input the TC 016 with one cycle delay.

Determine and input the appropriate code as follows:

Input the code on the SSN of the Form 4029 applicant, even if that person files as a secondary filer with another number. The code is then reflected on entity of the applicant in case the taxpayer later files alone or with another spouse.

The IRS received date for a mailed response is determined by following the priority criteria listed below:

The IRS received date for a faxed response is determined by the following priority criteria listed below:

All clerical processing of Minister and Religious Waivers as well as Reconsiderations must be completed within 14 business days of IRS receipt or 3 business days from receipt into the operation, whichever is later.

Use the SB/SE DM Batcher Tool to:

Route Form 4442, Inquiry Referral, from Accounts Management, Form 1040 /Form 1040X, other referrals and previously processed applications (loose Form 4361 or Form 4029) to the appropriate technical unit. Do not input into the SB/SE DM Batcher tool.

Additional research may be required to ensure the mail belongs to the Minister and Religious Waiver program. Route all other mail as appropriate. See IRM 4.19.6.6.4, Routing Documents, for more information.

The following Organization Function Program (OFP) codes should be used with the 790 (tax account support activity - clerical) function code:

Completed work must be staged within 3 business days of being controlled/updated.

The Clerical Function is responsible for all outgoing mail. This mail may consist of internal mail, mis-routed mail, or external mail.

Internal mail is routed to other areas using Form 3210, Document Transmittal. The receiving area will acknowledge receipt by sending a signed copy of the Form 3210 back to the originating area. These forms must be maintained in a log in the Clerical Function. Refer to Document 12990 , IRS Records Control Schedules (RCS) 23, Item 36 for Form 3210 one (1) year retention and disposition requirements.

When mis-routed mail is identified, it must be routed back to the mail room for proper routing if the mail room was the originating office.

If the mail was addressed to Minister Waivers, but did not fit that criteria, route the correspondence to the proper area and issue Letter 86C to the taxpayer. For additional information on issuing Letter 86C, see IRM 21.3.3.4.2.1, Use the Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, for more information. Also see http://serp.enterprise.irs.gov/databases/who-where.dr/form-4442-erroneous-referral-coordinators.html for instructions in routing mis-routed Forms 4442.

Taxpayers may request assistance from the Taxpayer Advocate Service (TAS). TAS is an independent organization within the IRS created by Congress to help taxpayers resolve issues with the IRS. Form 12412, Operations Assistance Requests (OARs), are received from TAS in the Clerical Function both by mail and FAX. The Clerical Function must take the following actions for all OARs received:

Discovered remittance is a response and/or correspondence with an original form of payment attached such as a personal check, money order or cashier’s check. Also, a loose check(s) discovered in an envelope or attached to a blank piece or paper.

If any of the items listed in (1) are discovered, both the Form 3244, Payment Posting Voucher, and Form 4287, Record of Discovered Remittance must be completed.

Two copies of Form 3244 must be completed for each discovered remittance and contain entries in the following fields:

Form 4287, Record of Discovered Remittance, must be completed to log all discovered remittances. The following fields must have entries:

If remittance is found attached to a case while working in the office, take the following steps:

If the remittance is found attached to a case while teleworking, immediately take the following steps:

IRS CHECKS- Returned IRS refund checks are handled differently than regular discovered remittance. If an IRS refund check is found, take it to the team Manager/Lead Tax Examiner to be routed to the Refund Inquiry Unit.

VOIDED CHECKS- If the response has a “VOIDED” personal check attached, remove the check from the response and attach it to the Installment Agreement (IA) request. Route the “VOIDED” check with the IA to Collections.

Managers perform the following types of reviews:

Managers are required to perform a minimum of two workload reviews per quarter for each employee. These workload reviews consist of:

Managers are required to perform evaluative case reviews. See IRM 4.19.6.7.1.2, Mandatory Evaluative Reviews, for more information.

The primary purpose of a non-evaluative review is to help the employee develop and enhance their job skills. See IRM 4.19.6.7.3.1, Non-Evaluative or Coaching Reviews, for more information.

The number of reviews should be increased when warranted.

These reviews, as in all case reviews, should be documented in a Performance Review Worksheet.

An operational review is a review of a subordinate manager and the organizational component is imperative for their growth. It provides an opportunity to improve overall effectiveness of the team and/or department. The review should cover Employee Satisfaction in the unit and include receiving feedback from the manager’s employees.

Be sure to praise all accomplishments, identify areas needing improvement, target completion dates established and schedule a follow-up review.

These reviews may be of organizational as well as individual performance. These reviews should be:

The scope of operational/team reviews by upper management should include at least the following issues (others may be added at the discretion of the reviewer):

Management performs other reviews not related to employee performance.

Statute Awareness - Communicating the importance of statutes to all employees is very important and the responsibility of every manager/statute coordinator. On an annual basis, management is expected to issue Statute reminders to the employees. These reminders will be procedures which include contact information, phone numbers, coordinator name, tour of duty (TOD), instructions to follow for last minute statutes discovered, and the local routing procedures to the statute unit or RACS (depending on time frame). Contact names and numbers can be located on the https://irsgov.sharepoint.com/sites/SbEHqStpq_DocMatch/SitePages/CAWR-SSA%20.aspx under Technical Aid (Statute Forms/Aids). It is the responsibility of the campus to alert the web master if a change in contact information is necessary.

Document 7368, Basic Guide for Processing Statute Cases, is available to all campuses and area offices. Management must maintain a sufficient supply of this document from the National Distribution Center using catalog number 10296C. Document 7368 contains valuable information on statute-specific topics; therefore, a copy will be given to each employee. No Statute imminent case will be transshipped within 90 days of the statute expiration date, the case must be worked by the campus with current ownership.

Campuses will work together to ensure Statutes receive priority.

There are various CCA reports used to track and manage inventory within the Minister Waiver program:

These reports are available on a weekly basis on Control D.