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 campus minister with the Navigators of Canada eligible for a clergy residence deduction pursuant to paragraph 8(1)(c) of the Income Tax Act (the "Act")?
Position: Yes.
Reasons: The individual satisfies both the status and function tests for the purpose of claiming a deduction under paragraph 8(1)(c) of the Act.
April 5, 2011
Taxpayer Services and Debt Management Branch V. Srikanth
750 Heron Road Income Tax Rulings Directorate
Ottawa ON K1A 0L5
Attention: Nancy Della Valle 2011-039555
Clergy Residence Deduction
This is in response to your correspondence dated February 10, 2011 wherein you requested our views on the clergy residence deduction provided for in paragraph 8(1)(c) of the Income Tax Act (the "Act"). Specifically, you wanted our views on whether a campus minister (the "Individual") at the University of XXXXXXXXXX and employed by the Navigators of Canada (the "Navigators") qualifies for a clergy residence deduction pursuant to paragraph 8(1)(c) of the Act .
Generally, to be eligible for the clergy residence deduction, pursuant to paragraph 8(1)(c) of the Act, 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).
Status Test
For the purpose of satisfying the status test, the Individual is of the view that he is a member of a religious order, i.e., the Navigators. In this regard, it shall be noted that in Koop et al v The Queen 99 DTC 707, it was determined that the Navigators was not a religious order. However, based on subsequent modification of organizational policies and procedures, and reconsideration by the Canada Revenue Agency (the "CRA"), the Navigators is considered a religious order for purposes of paragraph 8(1)(c). It is stated in the incoming that the Individual is employed by the Navigators. Accordingly, we agree with the Individual's view that he is a member of a religious order and, therefore, satisfies the status test.
Function Test
The Individual is of the view that he satisfies the function test by virtue of 'ministering to a congregation'. In order to determine if the Individual satisfies the function test, it is to be resolved if the duties of a campus minister qualifies as 'ministering to a congregation'.
It is our understanding that campus ministries are ministries that focus on the spiritual growth and development of students. A campus ministry is normally associated either with a church or a missionary, which may or may not be denominationally specific.
As stated in the incoming, the following describes the duties of the Individual as a campus minister:
"XXXXXXXXXX "
The incoming further lists the following as some of the specific duties performed by the Individual:
- Preach and teach on spiritual and theological subjects.
- Research and study religion, Scripture and theology.
- Plan and conduct public worship services.
- Preside over sacraments such as the Lord's Supper.
- Perform memorial services as required.
From paragraph 13 of the Interpretation Bulletin IT-141R (Consolidated), entitled 'Clergy residence Deduction', ""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."
Based on these general comments and the description of the duties of the Individual, as stated above, it is reasonable to conclude that the Individual was 'ministering' to the student group that was attending his campus ministry. The next issue to be resolved is whether the student group is a 'congregation' for the purpose for paragraph 8(1)(c) of the Act.
As stated in paragraph 15 of IT-141R:
"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 counseling, advice, illumination and inspiration. A group of students assembled for academic instruction is not a congregation."
Paragraph 17 of IT-141R further states 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."
In support of the argument that the students attending the campus ministry constitute a 'congregation' for the purposes of paragraph 8(1)(c), the incoming states that "XXXXXXXXXX ."
We may consider the following jurisprudence in resolving the issue of 'congregation' and whether the Individual is considered to be 'teaching' the student group attending the campus ministry:
In Shepherd v The Queen, 2002 DTC ("Shepherd"), the appellant was "a minister of the Conference" and it was acknowledged that the appellant met the status test. The question was whether his function as a divinity professor qualified as "ministering to a parish or congregation?" as required by paragraph 8(1)(c ) of the Act . Teskey. J, when analyzing whether the appellant was ministering to a congregation made the following comments:
"The Appellant and his witnesses may look on their students as their congregation and that their teaching has a pastoral role. However the question to be decided is: does their actual duties and actions fit within the provisions of paragraph 8(1)(c) of the Act as Parliament has enacted?"
He then concluded that:
"The [c]ollege 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("Bissell"), the appellant was an ordained minister teaching students in a divinity class in what was a denominational college. The question was, is that considered "ministering to a parish or congregation?", as required by paragraph 8(1)(c ) of the Act . Bowman J. had the following comments on this issue:
"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.
... [T]eaching 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. ... I do not think that it encompasses a group of college students assembled for academic instruction."
Based on the information available, we agree with the Individual's view that the students attend the campus ministry for acquiring religious rather than academic instruction. Considering the nature of the duties performed by the Individual and the purpose of the students attending the campus ministry in relation to the general views of the CRA from IT-141R, and the observations made in the jurisprudence noted above, we further agree with the Individual's view that the students attending the campus ministry constitute a 'congregation' for the purpose of paragraph 8(1)(c) of the Act. Further, teaching may well form a component of the Individual's ministering duties, but that, in our view, is incidental to his duties of imparting spiritual and religious instruction, unlike in the case of the professor imparting religious knowledge to a divinity class in Bissell and Shepherd. Accordingly, in our view, the Individual is considered to satisfy the function test of 'ministering to a congregation'.
Since the Individual satisfies both the status and the function tests, he is eligible to claim the clergy residence deduction provided for in paragraph 8(1)(c) of the Act.
For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the CRA's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should the taxpayer request a copy of this memorandum, they may request a severed copy using the Privacy Act criteria, which does not remove taxpayer identity. Requests for this latter version should be made by you to Mrs. Celine Charbonneau at (613) 957-2137. In such cases, a copy will be sent to you for delivery to the taxpayer.
R.A. Albert, CA
For Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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