A minister didn’t receive a salary from his church, but the church paid his personal credit card charges, his home mortgage and home utility expenses. He claimed these payments should be excluded from his income because he made a vow of poverty. The Tax Court upheld the IRS in finding the payments were taxable income. The taxpayer failed to meet the requirements of the housing allowance exclusion. The requirements are (1) the home or rental allowance must be provided as remuneration for services which are ordinarily the duties of a minister of the gospel; (2) before the payment of the rental allowance, the employing church or other qualified organization must designate the rental allowance pursuant to official action, which may be evidenced in an employment contract or by any other appropriate instrument; and (3) the designation must be sufficient in that it clearly identifies the portion of the minister’s salary that is the rental (housing) allowance. There was no evidence of an official action between the church and the taxpayer, so the requirements for exclusion weren’t met. In addition, the minister failed to file an election to be excluded from self-employment tax under a vow of poverty, so he was also subject to self-employment tax. (Rogers v. Commissioner, T.C. Memo. 2013-177, August 1, 2013.) Clergy Financial Resources
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