I'm no tax expert, but in the US I would think it would depend on their income. There is a threshold below which you don't have to file taxes--5 or 6 thousand dollars as I recall.
Do circuit overseers pay income tax?
Over here, they pay income tax, as do all Bethel workers etc. There is a government-set roof not to be exceeded as to the value of private work you can do for others or what you can received as income on a "hobby basis" (stamp collectors selling their collections etc.) and they fall within the same rules. Most pay the average 20-25 % of their income after certain expenses have been deducted.
They do not make enough income in the US to file. They are paid a small monthly allowance similar to the allowance that Bethel workers receive, and they get housing paid for by the congregations along with automobile and expenses. Likely they would fall below the threshhold even if all that was counted, but I am sure it all falls under 'missionary expense' or something similar.
I don't see this as a travesty - these people don't make large amounts of money [even if they take personal cash gifts]. They have it made, so to speak, but they don't profit much from the experience. And once they lose the 'privilage' they have nothing to fall back on - no house, no car, and they gave up having kids usually.
I believe most these people are just as mislead as all of us were. Freeloaders perhaps [depending on definition], but they are not getting off easy by not having to pay income tax. It wouldn't amount to much if they were taxed.
Individual cash gifts up to $12,000 are not taxable here in the US.
What about the GB, do they pay taxes? They may not get a large "paycheck" but they do get cars, housing, air fair, gifts etc. Should all this not also be taxed.
Every year at tax time I try and and put my wifes donations to the WT on our return, and she freaks out saying that we can't tell the government that the WT gets our donations. She is affraid the government will then tax the WT, or at least use the information aginst them. And she works part time for H&R Block so she should know better.
Not on WTS stuff......
I'm pretty sure COs are in the "Special Order of Full Time Servants", a religious "brotherhood" (same as monks, bishops, etc.) set up by the Society. As members of a religious order, they would not have to pay income taxes on their "income" (the Society paying for their insurance, car, the small monthly stipend, etc.).
Not sure what the US law says about the numerous "green handshakes" they receive. They are "gifts", but those "gifts" can probably add up to thousands, or even 10s of thousands, of dollars per year. Seems like such generous "gifts" ought to be taxable, but I don't know. I am reasonably certain that even if such gifts are required to be declared, very very few COs actually do so.
There is a special Bethel department set up to help all of the "Special Order of Full Time Servants" with tax issues.
There are a couple things to keep in mind.
An individual does not have to file a tax return if their income falls below a certain level. As an example, if both spouses are 65 or older they do not have to file if their income falls below $19,600. I doubt that they receive that much from the Society.
In regards to gifts: Gifts are non-taxable to the receiver as long as it is not considered payment for a service. The giver may be subject to a gift tax. But I doubt that an individual giver is going over the theashold to make this an issue.
See the IRS guidelines for gifts:
I am not sure if the rules apply related to the religious order. I used to work as a consultant for a nursing home that was run by a religious convent. The nuns received a salary from the nursing home (they worked as nurses and various other jobs) and then turned the money over to the convent. This was non-taxable to them because they turned the money over to the religious order. This is different from COs. I doubt they turn their gifts over to the Society.
Though the Bethel or Circuit income is low, do not forget that there are a number of CO's and Bethelites with large investments that make over the tax free thresholds in rent, interests and dividends. In this case the Bethel allowance should be added as income and tax paid. I feel there is a good case for tips/donations COs receive to also be considered taxable income,
I doubt that many reach the threshold of the actual Federal income tax.
However, that still leaves the issue of Social Security tax (or Self-Employment tax if the Society doesn't pay it).
It is absolutely against the law to not pay into FICA one way or the other.
This may be the real reason they want to dissolve the CO arrangement...Society could be held responsible.