不在教會事奉的教牧同工可否取得房屋津貼(Housing Allowance)

The tax law allows ministers to designate a portion of their ministry income as housing allowance. This allowance reduces the reportable income on their tax returns, and reduces their tax liabilities. However, the tax law is very clear about who qualifies as a minister. IRS Publication 517 gives the following brief definition of a minister:

Ministers Defined

Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. They are given the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination.

The tax law actually goes into more detail, and it mentions the following 5 factors:

(1)   the person must be ordained, commissioned, or licensed as a minister;

(2)   the person is involved in the administration of sacraments;

(3)   the person conducts religious worship;

(4)   the person has management responsibilities in the local church or a parent denomination;

(5)   the person is considered to be a religious leader by the church or parent denomination

While the above may seem like only ministers who works in a church would meet the definition of a minister, it is not true because the tax law, as well as tax court cases, has allowed ordained workers who are working for para-church organizations to qualify for such tax benefits. Before we go further, let me clarify that tax court cases are very clear that the first factor (ordained, commissioned or licensed as a minister) is a MUST. After the first factor is satisfied, then the IRS and the courts apply a “balancing test" with respect to the other four factors. A person does not have to meet all 4 factors, but he or she has to meet some of the factors. The following is from a prominent tax attorney:

The leading case defining the term “minister" is a 1989 Tax Court case called Knight v. Commissioner, 92 T.C. 199 (1989). The court announced a new test for determining whether or not a particular individual is a minister….. Only the first factor is required in all cases (the individual must be ordained, commissioned, or licensed). The remaining 4 factors need not all be present for a person to be considered a minister for tax purposes. The court did not say how many of the remaining 4 factors must be met. It merely observed that “failure to meet one or more of these factors must be weighed . . . in each case." The court concluded that the taxpayer in question was a minister despite the fact that he only satisfied 3 of the 5 factors.

In IRS Publication 517 it also discusses what would be the qualified services for a minister (how factors 2 to 5 can be met) by ministers who work for non-church organizations:

Services for nonreligious organizations.   Your services for a nonreligious organization are qualified services if the services are assigned or designated by your church. Assigned or designated services qualify even if they do not involve performing sacerdotal functions or conducting religious worship.

If your services are not assigned or designated by your church, they are qualified services only if they involve performing sacerdotal functions or conducting religious worship..

Books or articles.   Writing religious books or articles is considered to be in the exercise of your ministry and is considered a qualified service.

There are two court cases which throws further light on how ministers working in non-church organizations could qualify for housing allowance:

Whittington vs. Commissioner of IRS, TC Memo 2000-296

Mosley vs. Commissioner of IRS, TC Memo 1994-457

The first case can be accessed from the Tax Court website at http://www.ustaxcourt.gov/InOpHistoric/WHITTINGTON.TCM.WPD.pdf .

The second case is not available from the Tax Court website. But the ECFA (Evangelical Council for Financial Accountability) analyzed the decision in the Mosley case as follows:

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