- 9 - The church designated all of petitioner’s compensation as a housing allowance for its fiscal years ending May 31, 1994, and May 31, 1995, and 80 percent for its fiscal year ending May 31, 1996. Respondent contends that the language in section 107(2) that excludes from income a rental allowance paid to a minister “as part of his compensation” shows that Congress intended not to allow an exclusion of all of a minister’s salary. We disagree. Respondent’s reading suggests that the “part of his compensation” language in section 107(2) requires that, to be excludable under section 107(2), any “part” of a minister’s compensation may be designated as a rental allowance so long as less than “all” is so designated. Under that interpretation, a taxpayer could qualify under section 107(2) if, for example, the amount designated as a rental allowance were $1.00 less than the minister’s total compensation. This reading is not specifically indicated by the legislative history or required by the regulations. It seems unlikely that such a tiny difference in amounts should control whether section 107(2) applies. The “part of his compensation” language also appears in section 107(1). Thus, under respondent’s reading, no exclusion would be available to a minister to whom a church provided a home but no other compensation because the home would be all of that minister’s compensation. We do not think Congress intended to require ministers living under those circumstances to pay tax onPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011