Taxing Questions Raised by Ruling

Article excerpt

DAVID HARRIS

DEATH AND TAXES, as we are frequently reminded, are the two inescapable facts of life. Both bring their own kind of grief. The church, at least, can bring some comfort in the case of death, but it looks as if there may be some misery in store for the church over taxes.

As reported elsewhere in this edition, some local Revenue Canada offices have reassessed some United Church clergy couples and are claiming they owe substantial back taxes, the result of both clergy claiming what is called the clergyman's residence allowance on the same house.

If upheld and applied across the country, it could affect 37 Anglican clergy couples and may, as a result, affect a number of churches.

The bottom line is that if Revenue Canada denies the deduction, affected clergy will likely look for more money from the parishes.

And while 37 couples out of 1,900 clergy eligible for a tax break across the country may not seem worth getting worried about, it may sound the beginning of the end of clergy housing tax deductions across the board. That would be significant.

Clergy remuneration is unusual. In former times it was known as a living -- a combination of cash and housing that provides for the priest and rectory family, permitting the priest to fulfil a calling to ministry in a particular parish.

Under such a scheme, the incumbent of the parish is not an employee directly compensated for doing a certain amount of work. Instead, it is an appointment more in line with judges or tenured university professors who are compensated for fulfilling the terms of their office, be the working week long or short.

(Two court decisions last year, the Brewer case in Ottawa and the Coker case in England, reported on Page 17 in this edition, backed the view that clergy are not employees. …