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 rabbi, who is employed in XXXXXXXXXX , a Jewish school, considered to minister a congregation for the purpose of the deduction pursuant to paragraph 8(1)(c) of the Income tax Act ( the "Act")
Position: No
Reasons: Giving lectures on religion and providing counselling service to a group of students is not considered to be "in charge of " or "ministering a congregation" for the purpose of deduction provided in paragraph 8(1)(c) of the Act
April 8, 2009
XXXXXXXXXX TSO HEADQUARTERS
Office Audit Section V. Srikanth
Verification and Enforcement Division
Attention: XXXXXXXXXX
2009-031062
Clergy Residence Deduction
We are writing in response to your facsimile dated January 12, 2009, requesting an interpretation with respect to the clergy residence deduction and, specifically, a determination of whether XXXXXXXXXX (the "taxpayer"), who is employed at XXXXXXXXXX (the "School"), a Jewish school, is qualified to claim a clergy residence deduction, pursuant to paragraph 8(1)(c) of the Income Tax Act (the "Act").
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 order to qualify for the clergy residence deduction, pursuant to paragraph 8(1)(c) of the Act, the person must satisfy both the status and function tests discussed below.
Status test
In order to qualify for the clergy residence deduction under paragraph 8(1)(c), the person must be one of the following:
- a member of the clergy;
- a member of a religious order; or
- a regular minister of a religious denomination.
Paragraph 4 of Interpretation Bulletin IT-141R (Consolidated), Clergy Residence Deduction, states a "member of the clergy" is a person set apart from the other members of the church or religious denomination as a spiritual leader. Priests, pastors, ministers, rabbis, imams, commended workers and other persons who have been commended, licensed, commissioned or otherwise formally or legitimately recognized for religious leadership within their religious organization may be members of the clergy.
In the given submission, the taxpayer is a rabbi. He is, therefore, considered to have satisfied the status test.
Function test
In order to qualify for the deduction, a person who has the required status must also be employed in a qualifying function. The person's function must be one that he or she is:
- 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.
In the given submission, the taxpayer is of the opinion that he satisfies the function test by virtue of ministering to a congregation.
According to paragraph 13 of IT-141R, "Ministering" is a very broad concept of serving or attending to the needs of a congregation, diocese or parish, or its individual members. This should be looked at within the context of the religious organization's practices and expectations. If a person who meets the status test is employed within a congregation, he or she is considered to be ministering to a congregation if he or she is fulfilling a pastoral or ministerial role in the manner requested by that congregation.
Paragraph 15 of IT-141R provides an explanation of a congregation. According to it, "a "congregation" is not defined by any particular church structure, by territorial boundaries nor by the number of people gathered in one place. It is an assemblage or gathering of persons to whom a minister provides spiritual counselling, advice, illumination and inspiration. A group of students assembled for academic instruction is not a congregation. Persons who meet the status test do not need to be in charge of a single, fixed congregation. They can serve multiple congregations. Congregations can be of a diverse and fluid makeup and require neither voluntary attendance nor homogeneity of religious belief. Chaplains in hospitals, jails, the armed forces and other such organizations are generally considered to minister to congregations."
The observations of Justice MacKay of the Federal Court, Trial Division in the case of Zylstra Estate et al. v. The Queen, 94 DTC 6687 at page 6696 are worth noting:
"It is my opinion that in this broader context of the words used to describe the qualifications for a deduction, the words 'diocese, parish or congregation', are intended to describe different organizational or institutional structures determined by religious denominations for the ongoing organized activities of their members on a regular basis. Thus, a gathering of persons may well be a congregation for some purposes, but unless it is a gathering for shared religious purposes recognized by a religious denomination for its regular organizational religious activities, it does not qualify as a 'congregation' within the meaning of that word in paragraph 8(1)(c) of the Act." Paragraph 17 of IT-141R explains that "teaching at an educational institution, whether or not it is a denominational school, college or seminary, is not by itself recognized as ministering to a congregation. However, a person who meets the status test who is otherwise engaged in a recognized and permitted ministry, may also be engaged in teaching without being disqualified for this deduction. For example, a school chaplain may also have some teaching responsibilities or a congregational minister may also take on teaching responsibilities for his or her religious denomination."
In Shepherd v The Queen (TCC), 2002 DTC 3855, Teskey, J, while analyzing whether or not the appellant was ministering to a congregation, made the following comments:
"Congregation" is also defined as: "a body of people assembled for religious worship or to hear a preacher."; or "the body of people regularly attending a particular church."
I believe it is in this context that the words "parish" and "congregation" are used in paragraph 8(1)(c) of the Act .
The College is just not a parish or a church and the students are not assembled for religious worship but to gain religious knowledge and they are not a congregation for the purposes of paragraph 8(1)(c) of the Act."
In Bissell v. The Queen, 99 DTC 721, the issue was whether the appellant, Bissell, an ordained minister, teaching students in a divinity class, in what was clearly a denominational college, was considered "ministering to a parish or congregation?", as required by paragraph 8(1)(c) of the Act. Judge Bowman made the following comments in this regard:
"It cannot be denied that ministering to a congregation involves in many instances teaching. It is an important part of the role of a minister. Among the many appellations given to Jesus Christ is "The Great Teacher". Nonetheless, although ministering may include teaching, the converse is not true.
It is important to put Reverend Bissell's activities in their proper perspective. He taught religion to persons intending to become ministers. No doubt, he also counselled them, and probably prayed with them. He also preached from time to time to local congregations. Counsel for the appellants referred me to a number of cases in which the courts have recognized that ministering can include specialized ministries. I agree with this as a broad proposition, as far as it goes, but it does not in my view go far enough to assist Reverend Bissell. I do not think that teaching classes of students in a Bible college can be said to be ministering to a congregation in the sense in which I have used the expression in other cases, such as Miller and McGorman or Baker.
As noted above, teaching may well - and frequently does - form a component of ministering, but teaching in itself is not ministering in any ordinarily accepted connotation of that term of which I am aware. Nor do I think that a group of students can be said to be a congregation in the sense of an assemblage or gathering of persons to whom a minister provides spiritual counselling, advice, illumination and inspiration. While for the reasons given in Kraft et al. I do not subscribe to the view of the word congregation expressed in McRae, I do not think that it encompasses a group of college students assembled for academic instruction."
It is our understanding that the School is an Orthodox Jewish day school for boys. The taxpayer, in his submission explains that, a "Yeshiva" is an institution where, in addition to the usual community activities, like communal prayer, celebration of life-cycle events, it also functions as a study hall where the principles of the Jewish religion and faith are taught and studied by the male members of the community. A typical day in this Yeshiva begins with intense communal prayer followed by a "powerful" sermon. This is then followed by a study of the Jewish faith, which continues for almost five hours after which they attend class, where they are taught English, math, science etc.
Based on the information provided, it is our further understanding that, for the purpose of the paragraph 8(1)(c) deduction, according to the taxpayer, the congregation consists of the group of boys/men who are enrolled in this Yeshiva to acquire both spiritual and secular knowledge.
The taxpayer goes on to explain in his submission that, he has been employed to impart the religious aspect of the education and is not involved in the secular studies, which are provided by another group of people. His job is to 'nurture spiritual growth and dispense religious counsel and advice to the boys affiliated with his Yeshiva'. It is for this reason, he considers himself a "preacher" rather than a "teacher". He is expected to be a leader and role model for the boys and the community during the hours of prayer. There is, however, no information in the submission to indicate whether the taxpayer serves any congregation other than the students or performs other functions similar to that carried out by a rabbi in a synagogue or a minister in a church.
Based on the information provided, there is no doubt that religion is the main purpose, for which the group of boys/men gather in the School. However, religious study is a part of the curriculum for these individuals when they attend the School. The taxpayer's role is to impart spiritual knowledge to the students, who include both young boys and married men. The taxpayer's role is, therefore, in our view, more of a "teacher" than a "preacher", even though he may consider it the other way round. Further, the School is an educational institution, where boys are trained to acquire spiritual knowledge in the Jewish religion. However, in our view, for the purpose of deduction provided in paragraph 8(1)(c) of the Act, addressing such a group cannot be considered to be in "charge of" or "ministering to a congregation".
For reasons explained above, in our view, the taxpayer is not considered to have satisfied the function test. Since he has satisfied the status test but not the function test, he is not eligible for the clergy residence deduction that is provided for in paragraph 8(1)(c) of the Act.
R.A. Albert, CA
For Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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