7 April 1997 Internal T.I. 9702597 - XXXXXXXXXX NOT A RELIGIOUS ORDER

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:

XXXXXXXXXX - is it a religious order

Position:

no

Reasons:

XXXXXXXXXX but does not follow religious vows or discipline which would involve a withdrawal from secular life - doesn't fall within the ordinary meaning of religious order

April 7, 1997
Sudbury Tax Services Office Headquarters
Cathy Borton A. Humenuk
Resource Officer 957-8953
970259

XXXXXXXXXX

We are replying to your memorandum of January 22, 1997, in which you ask whether the XXXXXXXXXX is a religious order.

XXXXXXXXXX

Generally, to be eligible for the paragraph 8(1)(c) deduction, the individual must first be a member of the clergy, a member of a religious order, or a regular minister of a religious denomination (the "status test"). Where one of these conditions is met, then 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"). As an ordained minister, XXXXXXXXXX satisfies the conditions of the status test. Since it is accepted that he is not in charge of or ministering to a congregation but is engaged exclusively in full-time administrative service, the issue to be decided is whether XXXXXXXXXX is a religious order (recognizing that XXXXXXXXXX itself is not a religious denomination). If so, the conditions of the function test would be met and XXXXXXXXXX would be entitled to the deduction under paragraph 8(1)(c) of the Act.

XXXXXXXXXX

Whether or not an organization is a religious order is a question of fact which must be determined on a case-by-case basis. However, an essential prerequisite for an organization to be considered a religious order is the existence of vows or a specific religious discipline which sets it apart from other organizations within the religious denomination with which it is affiliated. In Zylstra, the Court was required to consider, among other things, the meaning of the term "religious order." On the basis of expert testimony, the Court accepted that the phenomenon of "religious orders" is:

... marked by common characteristics, when a group of persons, distinct from within a larger religious community, live under a set of rules, bound by vows to observe not only the general precepts of their church, but also vows of chastity, poverty and obedience, including agreement to a communal life unless permitted to live otherwise.

The Court further found that education, while sometimes pursued by a religious order for the purpose of fulfilling the primary goal of service to God through worship, prayer and devotion, is not a religious purpose of the type found in religious orders. Similarly, the activity of promoting the gospel, is not, in itself, necessarily indicative of a religious order. These findings are consistent with our view that a religious order is a group of people who are members of a religious community who have abandoned a secular lifestyle.

From our review of the by-laws, letters and pamphlets submitted with your request, it appears that XXXXXXXXXX However, nothing in the documentation submitted indicates that the members of XXXXXXXXXX have abandoned a secular lifestyle, adopted a specific religious discipline or otherwise committed themselves to life as a member of a religious order. As a result, it is our view that XXXXXXXXXX is not a religious order and XXXXXXXXXX is not entitled to a deduction under paragraph 8(1)(c) of the Act.

John F. Oulton
Section Chief
Business, Property & Employment Section II
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch