Presbytery of San Gabriel

Memo

To:        Ministers Members of Presbytery and Clerks of Session

From:    Tom Rennard and Bob Wendel, Interim Executive Presbyter and Presbytery Clerk

  Date:     

Re:        Minister’s Housing Allowance and Presbytery Reimbursable Policy

First, yesterday President Bush signed into law H.R. 4156, the “Clergy Allowance Clarification Act of 2002.”  The heart of this law says:

“Section 107 of the Internal Revenue Code of 1986 is amended by inserting before the period at the end of paragraph (2) ‘and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appetencies such as a garage, plus the cost of utilities.’” 

This applies for all tax years beginning 2002 and for any prior years for which returns have not yet been filed.  This clearly sets a ceiling for the amount of housing expenses that a minister can claim on their income tax, and may deter the IRS from pursuing “the Warren Case” that currently is before the 9th Circuit Court of Appeals of the United States.  For more information on the origin and course of this legislation visit the Board of Pensions of the Presbyterian Church (USA)’s web site at www.pensions.org.

Second, as a reminder to clerks and pastors, at the September 1997 meeting of the presbytery the following policy was established:

To establish the policy for the minister members of the presbytery that automobile, educational, and all other professional allowances will be paid to the minister through an accountable reimbursement plan.  Minister members may request an exemption for a particular allowance by writing the Committee on Ministry.

These are details of our life together.  The former is now the law of the land and sets aside the Tax Court’s ruling in 2000 that all housing related expenses might be claimed.  The later is the policy of the presbytery.  The Church and Clergy Tax Guide: 2001 Edition (Christian Ministry Resources, 2000) remains the most helpful resource for the details of church and clergy law.  Please call with any questions.

Enc. Ministerial Expense Form for pastors and churches