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.
Principal Issues: Is XXXXXXXXXX l a religious Order?
Position: No
Reasons: Nothing indicates that the school is anything but an educational institution.
XXXXXXXXXX
2004-007785
C. Tremblay, CMA
(613) 957-2139
July 5, 2004
Dear XXXXXXXXXX:
Re: XXXXXXXXXX
This is in reply to your letter of May 14, 2004, wherein you request an advance income tax ruling on behalf of XXXXXXXXXX, who requested we confirm his entitlement to the clergy residence deduction under paragraph 8(1)(c) of the Income Tax Act (the "Act"). We reviewed the submissions and we must advise you that we are unable to rule. As stated in paragraph 7 of Information Circular 70-6R5, advance income tax rulings are provided on proposed transactions only. We are unable to issue income tax rulings on completed transactions or on series of transactions that are significantly advanced. Since you are asking us to rule that XXXXXXXXXX is a religious order so a clergy residence deduction can be allowed, the fact that a deduction has been taken under paragraph 8(1)(c) of the Act in 2003 and the fact that the school has been in existence for some time renders the transactions completed transactions. You may refer to Information Circular 70-6R5 dated May 17, 2002 for more information concerning advance income tax rulings. Although we must decline to rule, we offer the following general comments on the matter raised by you.
In our view, XXXXXXXXXX is not a religious order. Although a religious order may have other objects within the overall context of its religious purpose such as education, we are of the view, that an educational institution, in and by itself, is not a religious order or a religious denomination and that Zylstra (94 DTC 6487 FCTD) and McRae (89 DTC 663 TCC) supports this position. The Courts have further found that education, while sometimes pursued by a religious order in order to fulfil the primary goal of service to God through worship, prayer and devotion, is not a religious purpose of the type found in religious orders. Thus XXXXXXXXXX is not a member of a religious order by reason of his membership in, or association with XXXXXXXXXX, and cannot be said to be "engaged exclusively in full-time administrative service by appointment of a religious order", a basis on which the request was made. Since, in our view, XXXXXXXXXX does not satisfy the first criteria of religious order as established by Judge Bowman in McGorman et al v The Queen (99 DTC 699 TCC), we do not feel it is necessary to comment on the other criteria.
Yours truly,
Steve Tevlin
For Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch
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