Principal Issues: Is a the director of Women's Ministry and member of a pastoral care team for a church entitled to the clergy residence deduction?
Position: No
Reasons: 1. Does not meet the status test. 2. Unclear whether the person is an employee. 3. Not fully considered but she does not appear to perform most of the functions of a minister.
2007-022795 XXXXXXXXXX C. Tremblay, CMA (613) 957-2139 April 20, 2007
Dear XXXXXXXXXX:
Re: Clergy Residence Deduction
This is in reply to your letter of March 12, 2007, requesting our opinion as to whether you qualify for the clergy residence deduction pursuant to paragraph 8(1)(c) of the Income Tax Act (the "Act").
In your letter, you state that you are a part of the Pastoral Care Team and also director of Women's Ministry and fulfil a pastoral role consistent with XXXXXXXXXX. You provide counsel to members of the church and facilitate workshops and speak at conferences and officiate marriage as needed in the local community.
Our Comments:
The particular circumstance in your letter of which you have asked for our views is a factual situation. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an advance income tax ruling. However, we have considered your enquiry and provide the following comments, which are of a general nature only.
Generally, to be eligible for the clergy residence deduction, an individual must be a member of the clergy, a member of a religious order, or a regular minister of a religious denomination (the status test). When one of these conditions is met, the individual must be in charge of, or ministering to, a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination (the function test).
In our view, and further to paragraphs 5 and 6 of Interpretation Bulletin IT-141R (Consolidated), a regular minister of a religious denomination must be authorized or empowered to perform spiritual duties, conduct religious services, administer sacraments and carry out similar functions. The individual should be authorized to perform all or at least most of the duties of a minister. Religious functions may include the participation in the conduct of religious services, the administration of some of the rituals, ordinances or sacraments, and pastoral responsibilities to specific segments of the religious organization. The individual should also be formally appointed and recognized by a body or person with the legitimate authority to appoint or ordain ministers on behalf or within the denomination. The position of regular minister should also be one of some permanence.
From the description of your pastoral duties, it appears that you will not be able to perform most of the duties of a regular minister of the church. Further, it is unclear whether you are an employee of XXXXXXXXXX, a requirement under the Act. Accordingly, in our view, you do not meet the status test of paragraph 8(1)(c) of the Act and are not eligible for the clergy residence deduction. We have not considered the function test, as the status test has not been met.
R.A. Albert, CA
For Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch