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 a Coordinator of Youth Ministry or a Pastoral Minister entitled to the clergy residence deduction under paragraph 8(1)(c)?
Reasons: Neither meets the status test as described in IT-141R (Consolidated)
L. Carruthers, CA
November 6, 2007
Re: Clergy Residence Deduction
This is in reply to your letter of June 18, 2007, in which you requested our technical interpretation as to whether the positions of Coordinator of Youth Ministry and Pastoral Minister, within the XXXXXXXXXX (the "Diocese"), qualify for the clergy residence deduction pursuant to paragraph 8(1)(c) of the Income Tax Act (the "Act").
The particular circumstances in your letter, on which you have asked for our views, appear to represent a specific factual situation. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on specific proposed transactions 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).
Your submission indicated that the Coordinator of Youth Ministry and the Pastoral Minister positions would be filled by the lay (non-clergy) employees of the Diocese and therefore, in your view, the relevant status test would be that of a regular minister of a religious denomination. In our view, and further to paragraphs five through seven of Interpretation Bulletin IT-141R (Consolidated), Clergy Residence Deduction, 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 religious functions. Religious functions may include 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 religious denomination. The position of regular minister should also be one of some permanence.
From the job descriptions enclosed in your letter, it appears that neither the Coordinator of Youth Ministry nor the Pastoral Minister position would be able to perform most of the duties of a regular minister of the church. Specifically, they would not be able to administer sacraments but rather would be expected to assist or coordinate in the sacramental preparation of others. Accordingly, in our view, the positions 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.
We trust that our comments will be of assistance.
R.A. Albert, CA
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
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