Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Is taxpayer entitled to 8(1)(c) deduction?
Position TAKEN:
YES
Reasons FOR POSITION TAKEN:
IT141R, teaching only part of her duties as chaplain of hospital
June 13, 2000
XXXXXXXXXX TSO HEADQUARTERS
C. Tremblay
957-2139
Attention: XXXXXXXXXX
2000-002401
Clergy Residence Deduction
This is in reply to your E-mail memorandum of May 3, 2000, requesting our opinion as to whether your client, XXXXXXXXXX met the functions test pursuant to paragraph 8(1)(c) of the Income Tax Act (the "Act") for her work at XXXXXXXXXX.
In your memorandum you state that XXXXXXXXXX is an ordained priest of the Anglican Church of Canada and was a chaplain with the XXXXXXXXXX. In her letter to you she explains that during her service with the hospital, she initiated a teaching program in clinical pastoral education at XXXXXXXXXX approved by the Canadian Association for Pastoral Practice and Education, in XXXXXXXXXX. As chaplain at the XXXXXXXXXX, she enhanced recognition of the importance of pastoral care. XXXXXXXXXX.
In order to qualify for the deduction pursuant to paragraph 8(1)(c) of the Act, the person must meet both the status test and the function test. We have not been asked to comment on the status test, however, it is our view that an ordained priest of the Anglican Church of Canada would meet the status test.
The person who has the required status must also be employed in a qualifying function. Chaplains in hospitals are generally considered to minister to congregations and thus meet the function test. Although teaching is not by itself ministering to a congregation, a person who meets the status test who is otherwise engaged in a permitted ministry, such as a chaplain in a hospital, may also be engaged in some teaching without being disqualified for the deduction.
However, we note that there were no T4 slips issued by the XXXXXXXXXX. The T4 slips for those years were issued by XXXXXXXXXX . We also note that the facts only indicate that the client was a chaplain with the XXXXXXXXX . We would suggest that before allowing a paragraph 8(1)(c) deduction for the client, you should verify whether the remuneration paid by XXXXXXXXXX represents, in part, compensation for her services as a chaplain. In this regard, we refer you to paragraph 14 of Interpretation Bulletin, IT-141R where it states that "As long as ministering to congregations is an integral part of their employment responsibilities and expectations, that activity will qualify."
Jim Wilson
For Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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