This is precious—"vow of poverty" indeed!
I genuinely burst out laughing.................
"vow of poverty" is a legal term that the IRS requires for the WTS to qualify as a religious non-profit avoiding paying taxes.
If you are a member of a religious order who hasn't taken a vow of poverty, your earnings for ministerial services you perform as a member of the order are subject to SE tax. See Ministerial Services , later. However, you can request that the IRS grant you an exemption as discussed under Exemption From Self-Employment (SE) Tax , later.
Vow of poverty.
If you are a member of a religious order and have taken a vow of poverty, you are already exempt from paying SE tax on your earnings for ministerial services you perform as an agent of your church or its agencies. You don't need to request a separate exemption. For income tax purposes, the earnings are tax free to you. Your earnings are considered the income of the religious order.
Services covered under FICA at the election of the order.
However, even if you have taken a vow of poverty, the services you perform for your church or its agencies may be covered under social security. Your services are covered if your order, or an autonomous subdivision of the order, elects social security coverage for its current and future vow-of-poverty members.
The order or subdivision elects coverage by filing Form SS-16. The election may cover certain vow-of-poverty members for a retroactive period of up to 20 calendar quarters before the quarter in which it files the certificate. If the election is made, the order or subdivision pays both the employer's and employee's share of the tax. You don't pay any of the FICA tax.
Services performed outside the order.
Even if you are a member of a religious order who has taken a vow of poverty and the order requires you to turn over amounts you earn, your earnings are subject to federal income tax and either SE tax or FICA tax (including estimated tax payments and/or withholding) if you:
Are self-employed or an employee of an organization outside your religious community; and
Perform work not required by, or done on behalf of, the order.
In these cases, your income from self-employment or as an employee of that outside organization is taxable to you directly. You may, however, be able to take a charitable deduction for the amount you turn over to the order. See Pub. 526, Charitable Contributions.
Organizations and individuals may request rulings from the IRS on whether they are religious orders, or members of a religious order, respectively, for FICA tax, SE tax, and federal income tax withholding purposes. To request a ruling, follow the procedures in Revenue Procedure 2019-1. To find the revenue procedure, go to IRS.gov and type "Revenue Procedure 2019-1" in the search box.
Yes, blondie, I know all that. But there is sometimes a discrepancy between the ideal/legal and the real. That's what we have here.
But then there is a discrepancy between the ideal/legal and the real is just about everything connected to the WTS. I could call it speaking out of both sides of their mouths.