- 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 on
Page: 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