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62 Geo. L. J. 1261 (1973-1974)
Tax Benefits for the Clergy: The Unconstitutionality of Section 107

handle is hein.journals/glj62 and id is 1273 raw text is: TAX BENEFITS FOR THE CLERGY: THE UNCONSTITUTIONALITY OF SECTION 107 Section 107 of the Internal Revenue Code,' known as the parsonage exclusion, singles out qualifying clergymen for tax benefits generally unavailable to other taxpayers. If furnished with a parsonage as part of his compensation, section 107 permits a minister of the gospel to exclude from gross income the rental value of the home.2 Similarly, if paid a rental allowance as part of his compensation, a minister may exclude the amount actually used by him to rent or provide a home.3 To qualify for the parsonage exclusion, a clergyman must be an ordained, licensed, or commissioned minister of the gospel.4 He also must per- form services which ordinarily are performed by ministers, such as conduct of religious worship, administration of religious organizations, or performance of teaching and administrative duties at theological seminariesY Finally, if a minister claims exclusion for a cash allowance granted in lieu of a parsonage, his employer officially must designate part of the compensation as rental allowance.6 1 INT. REV. CODE OF 1954, § 107. 21d. § 107(1). 3ld. § 107(2). A rental allowance is deemed used to rent or provide a home when it is spent to rent a home, to purchase a home, or for expenses directly related to pro- viding a home. Treas. Reg. § 1.107-1(c) (1963). The cost of utilities is considered directly related to providing a home. See Rev. Rul. 71-280, 1971-2 CuM. BULL. 92; Rev. Rul. 59-350, 1959-2 Cum. BULL. 45. Expenses for food and servants are not con- sidered directly related to providing a home. Treas. Reg. § 1.107-1(c) (1963). 4Kirk v. Commissioner, 425 F.2d 492, 495 (D.C. Cir.), cert. denied, 400 U.S. 853 (1970); Rev. Rul. 66-90, 1966-1 Cums. BULL. 27; Rev. Rul. 65-124, 1965-1 Cumx. BULL. 60; Rev. Rul. 59 270, 1959-2 Cum. BULL. 44; Rev. Rul. 57-522; 1957-2 Cum. BULL. 50. Although the statute refers to a minister of the gospel, clergymen of the Jewish faith are eligible for the parsonage exclusion. Abraham A. Salkov, 46 T.C. 190 (1966); see Silverman v. Commissioner, -- F.2d -- (8th Cir. July 11, 1973) (No. 72-1336). aff'g 57 T.C. 727 (1972); Rev. Rul. 58-221, 1958-1 Cum. BULL. 53. 5Treas. Reg. § 1.107-1(a) (1958). Treasury Regulation section 1.1402(c)-S also is applicable in determining whether services qualify as those ordinarily performed by a min- ister of the gospel. The conduct of religious worship and the performance of sacerdotal functions qualify whether or not performed for a religious organization. Id. § 1.1402(c)- 5(b) (2) (iii) (1968). In addition, the administration of a religious organization operated under the authority of a church is a qualifying service. Id. § 1.1402(c)-5(b) (2) (iv). Finally, if a church assigns a minister to work for an entity which is not a religious organization, all services performed for this entity also are qualifying services. Id. § 1.1402 (c)-5 (b) (2) (v). Old. § 1.107-1(b) (1957); see Richard Eden, 41 T.C. 605, 607 (1964); Rev. Rul. 72- 462, 1972-2 CuM. BULL. 76; Rev. Rul. 59-350, 1959-2 Cum. BULL. 45. [ 12611

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