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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13314
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a friend who has not paid social security for the past

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I have a friend who has not paid social security for the past two years, thinking they were exempt. If a 4361 is filed now, will the exemption automatically be denied? They should have filed the form no later than 4/15/13 as they have already filed their 2012 returns....thanks for any help...

Robin D :

Hello and thank you for using Just Answer,
Requesting the exemption and when the 4361 should be filed depends on the individual's reason. If they are a member of the clergy and have had the Self Employment earnings more than $400 in the past 2 years then they should have filed the 4361 by the due date of the return.

Robin D :

They can submit the 4361 and request the exemption but they will still need to pay the SE Tax for the prior 2 years (if any is owed)

Customer:

so, they will automatically be denied the exemption for the prior two years?

Robin D :

Not a certainty.

Robin D :

If they are denied they would owe no tax on the prior years for SE

Customer:

ok

Robin D :

They are clergy correct?

Customer:

yes

Robin D :

Ok

Robin D :

I just wanted to make sure

Robin D :

Religious sects and clergy have different rules

Customer:

it's a young married couple where the husband is a minister.

Robin D :

If he wants to be exempt then tell him to file the form

Robin D :

The iRS may allow and send him the approved 4361

Robin D :

Then he would not have to worry about it

Customer:

he does and basically what has happened is this:

Customer:

in 2011, he informed his employer (the church) that he was opting out of social security.

Customer:

From that point on, no FICA has been withheld from his pay or paid by the church.

Customer:

HOWEVER, he has not filed the 4361.

Robin D :

One sec, let me see something in my older files

Robin D :

The best I can find is Section 1402(e)(3) that contains the requirements for timely filing an application

Robin D :

There was a case where the court ruled a minister was allowed but that minister had left the service for 5 years

Customer:

Yeah - I think that I saw that as well...

Customer:

Probably the best option is to file the form and hope for the best..?

Robin D :

As he is still so close to teh 2 years they may accept it

Robin D :

I know that is no gaurantee but

Robin D :

I unfortunately would not be able to issue that

Customer:

yeah...that is what I am thinking too....

Customer:

I know that you cannot guarantee, I was just looking for another opinion...

Robin D :

I know

Robin D :

I just hate to not have a certain direction for you

Robin D :

I think that he has at least a chance of acceptance

Robin D :

Based on the current time frame

Robin D :

Section 1402(e)(3) of the Code provides, generally, that any application for exemption
from self employment taxes must be filed by the later of the due date (including
extensions) of the taxpayer’s income tax return for the second taxable year for which
the minister has net earnings from self-employment of $400 or more

Robin D :

I wonder if he prepares his own taxes?

Customer:

If he had filed an extension, he would be within the time frame.

Robin D :

Yes

Customer:

Yes, he does prepare his own tax returns..

Robin D :

Hmm

Robin D :

He may want, and fast, to get professional assistamce in filing the 4361

Robin D :

assistance

Robin D :

sorry

Customer:

ok - you think that would help as opposed to him completing the paperwork himself?

Robin D :

It will not hurt. The form needs to be completed accurately so as not to delay the process.

Customer:

ok

Robin D :

At this point if he thinks he can handle it fine but he has already made assumptions that were not correct

Customer:

exactly.

Customer:

I hear you.

Robin D :

I sincerely XXXXX XXXXX receives a positive responce

Customer:

hopefully...

Customer:

Thank you for your assistance...

Robin D :

You are most welcome

Robin D :

Your positive rating is always thanks enough.

Customer:

:)

Robin D :

Best wishes

Robin D. and other Tax Specialists are ready to help you

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