by BERT HALOVIAK
For more than 100 years, Seventh-day Adventists held that the functions of the licensed
and ordained ministry were different. We claimed the support of scripture and of Ellen
White for our position. By the 1970’s, however, this traditional policy was changed
in response to new IRS regulations. This paper shows the context and development of the
change.
In 1965 the U.S. Internal Revenue Service ruled that in order to receive the parsonage allowance and other tax benefits along with ordained ministers, licensed ministers "must be invested with the status and authority of an ordained minister." They must be "fully qualified to exercise all of the ecclesiastical duties" of the ordained.
On October 6, 1965, the General Conference officers affirmed that "this, of course, the denomination is unable to state." That meant the licensed ministry would receive about 9 percent less total income. This no doubt would be mollified by denominational entities making up some of the difference. The employing organization would also have to assume 50 percent of the social security payments formerly paid by the self-employed licensed minister.
General Conference President Reuben Figuhr and Secretary Walter Beach wrote to the IRS and intentionally minimized the differences between the licensed and ordained ministry, but conceded that the licensed minister did not perform all the functions of the ordained minister.
Their letter described the ministry as a one-track system where "the difference lies simply in the matter of growth in experience." The duties of licensed and ordained ministers were "substantially equivalent." At the time, seven licensed women ministers served in North America, and by definitions of this letter as well as by actions since the 1870s, when Adventist women were first licensed, women were on the track for ordination.
The IRS ruling regarding licensed ministers remained inflexible. Since the Figuhr-Beach
letter did not establish equivalency between the licensed and ordained ministry, the IRS
determined that "licensed ministers of the Seventh-day Adventist Church do not
qualify as ministers of the gospel" for tax purposes.
At the 1966 General Conference session Robert Pierson and Kenneth Emmerson replaced retiring GC President Figuhr and Treasurer Chester Torrey. Neal Wilson became the Vice President for North America. Robert Osborn had been called as an assistant treasurer of the GC earlier in 1966.
The IRS issue was discussed in at least three meetings by these newly elected officials at the Detroit GC session of 1966. North American leaders "informally agreed" to continue to treat licensed ministers the same as ordained ministers as regards tax status. At the same time, the leaders would secure legal counsel.
Osborn emphasized that the North American action "drastically altered the previous
position taken by the officers." It seemed to defy the IRS ruling. The church should
find some way to reimburse those who would now lose tax privileges they had had. He
thought the church should acknowledge the IRS letter and respond to it seriously. Thus
Osborn as well as the other General Conference treasurers preferred a very different
approach from that pursued by Neal Wilson.
In September, 1966, Attorney William Donnelly, of Washington, DC, suggested a new avenue—to claim that a licensed minister "who has also been ordained as an elder of a particular church of the denomination, is a ‘minister of the gospel’" within the IRS definitions. Donnelly suggested that "if the Church Manual spelled out affirmatively the authority of the ordained elder-licensed minister," IRS regulations might be satisfied.
Such a redefinition of the prerogatives of the licensed minister in a "positive way" seemed to offer hope. Though there were policies that precluded the licentiate from administering ordinances as a licentiate, one could do so as an ordained elder.
By August 7, 1968, various committees had extensively redefined the role of the
licensed minister. They had deleted the stipulation that the licentiate could not
administer baptism or the Lord’s Supper or perform the marriage ceremony. Instead,
the language emphasized the ability to assist in those ordinances and services. When
elected and ordained as a church elder, the licentiate could "conduct the communion
service and other services of the church and to preside at business meetings."
Deleted was the statement "among Seventh-day Adventists, only ordained ministers are
authorized to perform the marriage ceremony." On June 19, 1970, these changes breezed
through the GC session and were later incorporated into the Manual for Ministers
and the Church Manual.
A number of meetings in 1971 revealed a continuing difference between GC treasurers and NAD leadership. In conjunction with documents discussed at one such meeting, Pierson wrote in his shorthand: "Stretched every point possible to show licensed ministers very much like ordained ministers. I’d not go further. There is and should be a difference!"
Osborn pointed out that despite changes in definition of the licensed minister, church policy still did not satisfy the IRS. Yet the church continued to treat licensed ministers as full ministers for tax purposes.
An emergency meeting of GC officers, union officers and some local conference presidents occurred on December 21, 1971. Osborn presented a seven-page paper outlining the history of the tax issue since 1965. Coming to recent history, he referred to a September 22, 1971, observation of tax attorneys Prerau and Teitell: "We do not believe a further request [to the IRS] for ruling would be helpful unless the ‘licensed minister’ were given entirely the same status as the ‘credentialed minister.’"
In his handwritten notes on this document, Robert Pierson worried, "6 yrs of tax exposure $1100 per lic min per yr!" The total for 850 licensed ministers would be over $5 million in back taxes owed since the 1965 IRS letter, if the church could not convince the IRS to accept its procedures of the last six years.
Osborn summarized: "Unless we are willing by amending at a General Conference Session the Church Manual and the Manual for Ministers to give our licensed ministers the same status and authority as our ordained ministers, it seems very clear that we cannot by law and IRS regulations and rules continue to consider them as ministers of the gospel for tax purposes."
Osborn left for a California appointment following the meeting and upon arrival sent a telex message to Emmerson, Pierson and Wilson. He summarized the church’s dilemma:
"We have arrived at a regrettable day as we have departed from our traditional approach to governmental authority and now apparently are going to perpetuate this untenable six year position.
"Also to recommend change of long-standing denominational practices re authority of ministers primarily for tax considerations hardly is becoming. There should be other reasons for change or we should not amend the manuals.
"When this matter comes to GC Com or NADCA tomorrow I respectfully request you to bring my viewpoint to the group as expressed in this telex."
In spite of Osborn’s appeals, the next day the North American Division Committee
on Administration voted to ask GC officers to "take whatever steps are necessary to
secure for licensed ministers full status as ministers of the gospel."
The issue remained in limbo over the next several years. In 1974, North American President Neal Wilson vigorously sought to resolve the issue. He initiated contacts with several U.S. Congressmen, including Adventist Congressman Jerry Pettis, member of the powerful House Ways and Means Committee. In March of 1974, Wilson revealed his plan to appeal the IRS ruling. He drafted a 14-page memorandum giving the basis for the Adventist appeal.
Wilson emphasized modifications formalized at the 1970 GC session that allowed the conclusion that the licensed minister "who has also been ordained as an elder of a particular church" was indeed a minister of the gospel within the IRS meaning.
Wilson sent the memo to Jerry Pettis, who sought advice from Minority Counsel Dick
Wilbur. The June 28 analysis by Wilbur, recently sworn in as judge of the U.S. Tax Court,
stressed that all hinged on "the nature of the services that the licensed ministers
are authorized to perform." Unless the licensed minister held "coextensive
authority" with the ordained ministry, "then the Service holds that the licensed
ministers are not ‘ministers of the gospel’" for tax purposes. If the
licensed minister could now solemnize marriages, then Adventists might "request the
Service to reconsider the original ruling."
GC administrators’ hopes received a setback when Jerry Pettis was tragically killed in an airplane crash on February 14, 1975. The issue intensified the next month. For the first time since 1966, the Adventist position was openly challenged by the IRS. Branches of the IRS were making "protective assessments" for tax liabilities against various conferences, preparing to seize church properties for payment of back taxes.
During the April, 1975, Spring Meeting, implications for Adventist women in ministry were becoming evident. At this meeting women became eligible for ordination as church deaconesses and elders in North America. But what if they also held the ministerial license, as in the past? This situation troubled some church leaders.
The Spring Meeting thus passed this resolution:
"[We] recommend that where Bible Instructors or other women with suitable qualifications and experience are able to fill ministerial roles, they be assigned as assistant pastors, their credentials being missionary license or missionary credential."
Women were no longer eligible for the ministerial license, since that license had been redefined to allow prerogatives that were then seen as off-limits for women. For women, a different track of ministry was being paved.
After consultation with IRS officials in late April, GC administrators decided to officially request the IRS to review their 1966 ruling against the GC. By November, Wilson had drafted a letter and memorandum making such a request. He submitted it on December 30, 1975. In his covering letter, Wilson appealed for reconsideration "in light of many changes that have developed since 1966." He enclosed an 11-page "Memorandum of the Status of Licensed Ministers in the SDA Church" that formed the basis for his appeal.
In this memo, Wilson emphasized that "the role of the licensed minister has been redefined by the Seventh-day Adventist Church." The licensed minister "can perform sacraments which are much more meaningful than the marriage ceremony—such as the holy communion, preaching the Word, baptisms, conducting funerals, etc." He stressed that the licensed minister within the Adventist Church was not a separate category of minister.
In April, 1976, the IRS informed Wilson that although the licensed minister could preside at any of the church ordinances, he still could not solemnize marriages. Thus "the licensing of a minister of the gospel by the Seventh-day Adventist Church does not, in every respect, establish a status that is the equivalent of ordination." Wilson’s appeal was rejected.
By this time several conferences had received "final notice before seizure"
of church property in lieu of back taxes. In June, Osborn suggested a variation within the
legal line of pursuit. Rather than constantly redefining licensed ministers and their
prerogatives, why not challenge the IRS ruling as being too restrictive? "Our case
should not be based on trying to show how close our licensed ministers are to our ordained
ministers ecclesiastically speaking—there is a gap which is not bridged until
ordination." To Osborn, it was "incorrect to try to equate our licensed
ministers with our ordained ministers." In another letter written in June, Osborn
noted: "There is a definite detected feeling that it is hardly becoming to alter our
attitude toward our licensed ministers for tax considerations in a particular
country."
It soon became apparent that Osborn’s approach would be rejected. The officers instead decided "to reexamine the position we have taken on the licensed minister." The President’s Executive Advisory Committee (PREXAD) reviewed a document that suggested changing the responsibility of a fully-trained, licensed minister. Could he be authorized "on a probationary basis to perform all of the functions of an ordained minister under the supervision of his ecclesiastical superior?" PREXAD agreed "to ask the Presidential staff to study the suggestions for changing the authority of the licensed minister."
In August, the NAD union presidents approved such a proposal, and Wilson presented it to PREXAD on September 14. In his presentation, Wilson rehearsed the history of the problem since 1965. He stressed the "considerable financial involvement," of both the Adventist church and of the individual licensed ministers. He believed that the difference between the functions of the licensed and ordained ministry was not a moral or theological issue, but a matter of church policy.
According to Wilson here were two alternatives to going to court against the government: give in, or change the status of the licensed minister. It seemed wiser to change the functions of the licensed minister. After all, the functions of the licensed minister were now almost identical to those of the ordained minister. Policy was much more restrictive than practice. The crucial phrase in the Wilson proposal read:
"A licensed minister is authorized by the Conference/Mission Executive Committee to perform all the functions of the ordained minister in the church or churches where he is assigned."
PREXAD and then PRADCO approved this proposal.
Meeting just prior to the full Annual Council session, the Home and Overseas Officers and Union Presidents made it apparent that the field outside the United States would not approve the critical phrase quoted above. Thus the action voted at the October 20 afternoon Annual Council session differed from that voted at the North American section of the Annual Council held in the evening of October 20. Interestingly, the critical phrase was not printed in the Annual Council booklets for 1976, nor in the Review listing of Annual Council actions.
On December 30, Wilson explained in a Review article the reasons for modifying
the policy on the status of licensed ministers. While not giving the specifics of the
change, he noted that "the process by which the church trains its ministers obviously
is not a matter of theology nor doctrine, but one of methodology, policy." After much
prayerful discussion "with the view of preserving the unity and strength of the
church," the 1976 Annual Council "voted to amend the policy governing licensed
ministers to provide for appropriate latitude and flexibility within each division of the
General Conference."
In October of 1977, Wilson wrote the Commissioner of Internal Revenue about "some rather extensive ecclesiastical policy changes" taken by Adventists. He enclosed the 1976 NAD Annual Council action that authorized the licensed minister to "perform all the functions of the ordained minister" in his local church. There was joy at church world headquarters when it received the IRS letter of September 23, 1977: "We have reviewed the changes in your church’s ecclesiastical policy, and it is our view that licensed ministers in your church have, effective October 20, 1976, a recognized status that is the equivalent of ordination." After a decade, the licensed minister was again legally entitled to all tax advantages.
The 1977 NAD Annual Council added a new term to its policy book: "Associates in Pastoral Care." That phrase identified "persons who are employed on pastoral staffs but who are not in line for ordination." Women were formally placed upon this separate track within Adventist ministry.
Less than a year later, in August of 1978, the IRS modified its working policy. If licensed or commissioned ministers performed "substantially" all the religious functions of the ordained minister, they were eligible for tax benefits.
By this time, Adventist women were excluded from receiving the ministerial license that had been given women beginning in the 1870s. While women could once again be defined as ministerial workers, they still were not back on the track for ordination, where they had been before the IRS problems of the 1960s.
The inconsistency reached new dimensions in 1989 when the Annual Council voted not to recommend women to be ordained to the gospel ministry, but allowed women ministers to "perform essentially the ministerial functions of an ordained minister of the gospel in the churches to which they are assigned."
Ironically, even though Adventist church representatives decided that women ministers were "not in line for ordination," they were now defined by the IRS as eligible for the tax benefits of the ministry.
The interrelationship between money, theology, the IRS, and church administration had
converged to create a moral dilemma within the Seventh-day Adventist Church.
Bert B. Haloviak is a historian who works in the official Seventh-day Adventist Office of Archives and Statistics. His academic specialty is 19th century religious history.
First Printed in Adventist Today May / June 1996 Vol. 4 No. 3.