T.C. Memo. 1997-40
UNITED STATES TAX COURT
OSCAR HAIMOWITZ, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11985-95. Filed January 23, 1997.
Oscar Haimowitz, pro se.
Michele F. Leichtman, for respondent.
MEMORANDUM OPINION
NAMEROFF, Special Trial Judge: This case was heard pursuant
to the provisions of section 7443A(b)(3)1 and Rules 180, 181, and
182. Respondent determined a deficiency in petitioner's 1992
Federal income tax in the amount of $780.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue. All
Rule references are to the Tax Court Rules of Practice and
Procedure.
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After concessions by petitioner2, the sole issue for
decision3 is whether petitioner may exclude $3,705 from gross
income as a parsonage allowance pursuant to section 107(2).
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and attached exhibits are
incorporated herein by this reference. At the time he filed his
petition, petitioner resided in Beverly Hills, California.
Beginning in November 1950, petitioner worked for Temple
Adath Israel (the temple) in Marion, Pennsylvania. He stayed
with the temple for about 30 years until he retired in 1980.
Petitioner graduated from La Salle College with a degree in
social studies. Petitioner, however, never attended a religious
seminary4, and he neither is nor was an ordained rabbi or a
2
Petitioner concedes a $1,270 interest income adjustment
and a $226 Social Security income adjustment for the 1992 tax
year.
3
Petitioner also contests the constitutionality of sec.
107, claiming it is in violation of the Establishment Clause of
the First Amendment to the U.S. Constitution. This contention is
unavailing, in that if we decide the constitutional argument in
petitioner's favor, the result would lead to the disallowance of
the parsonage exclusion that he seeks. We refuse to consider
this issue, as the outcome could not affect petitioner's tax
liability in this case. See Kirk v. Commissioner, 51 T.C. 66, 72
(1968), affd. 425 F.2d 492 (D.C. Cir. 1970).
4
Petitioner testified that he intended to join the Jewish
Theological Seminary of America in New York sometime around the
year 1950, but was unable to find housing in the New York area.
Unable to join the seminary, he began working for the temple.
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commissioned cantor. Petitioner testified, however, that he was
recognized as a Fellow in Synagogue Administration. An
organization called Synagogue Administrators Association
presented petitioner this honor sometime around 1987 for his
efforts while with the temple.
Petitioner's responsibilities with the temple varied over
time. He initially was hired as an executive director,
performing mostly administrative functions such as hiring and
recruitment tasks. Petitioner testified, however, that he
eventually performed more religious duties for the temple as a
"religious functionary". The temple had a rabbi and a cantor
working for it, both of whom performed the temple's religious
functions. Petitioner stated that he never fulfilled the role of
either.
Over the course of his 30 years with the temple, petitioner
assisted about 500 students with their Bar and Bat Mitzvah
preparation. The substantive training was conducted by the
cantor and rabbi. The cantor would teach the students how to
chant their Torah portions, and the rabbi would rehearse with
them on the pulpit. Petitioner, however, would then "step-in" a
week or two before the Bar or Bat Mitzvah ceremony and assume
responsibility for enhancing the student's performance. This
included such duties as helping students with memorization of
blessings, Torah readings, and elocution.
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Petitioner additionally performed as the temple's marriage
ceremony director. Petitioner would meet with engaged couples to
discuss wedding preparations. Petitioner's advice was mostly
organizational in nature and related to the specific details of
planning a wedding. Petitioner frequently participated in the
wedding ceremony as a witness to the contract, but he never
officiated.
Petitioner also assisted the rabbi with various tasks during
the religious services. This included the duty of assigning
certain honors and responsibilities to congregants who performed
these tasks during services. Petitioner also performed the
following other activities for the temple: He managed cemetery
lots that the temple made available to its congregants; he
visited and conducted services for mourners; and he provided
weekly speakers for senior citizens.
In 1970, petitioner began paying into an "annuity program"
provided by the temple. Petitioner provided little detail
surrounding the plan or his employment relationship with the
temple, other than stating that he contributed 4 percent of his
yearly salary and the temple contributed 7 percent. The pension
income at issue was derived from this plan.
In 1992, petitioner received $3,705 in pension income, but
excluded that amount from gross income. In the notice of
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deficiency, respondent included this amount in petitioner's gross
income for the 1992 tax year.
Petitioner included with his 1992 tax return a signed
statement stating that he was a retired clergyman and that the
entire pension income had been expended for the housing
allowance.5 Petitioner testified, however, that for other tax
years he included with his tax return the above signed statement,
but crossed out the prewritten word "clergyman" and wrote in the
words "religious functionary" in its place.
Discussion
Petitioner bears the burden of proving that respondent's
determination is incorrect. Rule 142(a); Welch v. Helvering, 290
U.S. 111, 115 (1933). Section 107(2) provides that a "minister
of the gospel" may exclude from gross income "the rental
allowance paid to him as part of his compensation, to the extent
used by him to rent or provide a home." In order for a minister
to exclude a parsonage allowance, three criteria must be met:
(1) The minister must provide services which are ordinarily the
duties of a "minister of the gospel"; (2) the excluded amounts
must actually be used to rent or otherwise provide a home; (3)
and the rental allowance must be properly designated. See sec.
1.107-1(a), (b), and (c), Income Tax Regs.
5
Petitioner used a form-letter he received from the
Synagogue Administrators Association with the heading "Letter (B)
When All Of The Pension Has Been Used As A Parish Allowance".
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Respondent contends that the pension income should not be
excluded from petitioner's 1992 gross income for the reason that,
at the time petitioner contributed to the pension plan, he was
not a "minister of the gospel" for section 107 purposes.
Respondent also contends that the pension income was not properly
designated by the temple as a parsonage allowance, as required.
Respondent, however, does not question whether the funds were
actually used for housing or whether the provisions of section
107 have applicability to pension income. See Rev. Rul. 75-22,
1975-1 C.B. 49; Rev. Rul. 63-156, 1963-2 C.B. 79.
Petitioner does not claim that he was a rabbi or cantor.
Rather, petitioner suggests that he qualified as a "minister of
the gospel" because he performed duties as a "religious
functionary" for the temple.
Minister of the Gospel
The Internal Revenue Code does not define the phrase
"minister of the gospel", and the statute's legislative history
contains no clear meaning of the term. The regulations define
only what a minister does, but not what a minister is.
Section 1.107-1(a), Income Tax Regs., states that in order
to qualify for the exclusion, the home or rental allowance must
provide remuneration for services which are ordinarily the duties
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of a "minister of the gospel".6 The regulations under section
107 specify that the rules in section 1.1402(c)-5, Income Tax
Regs., apply in making this determination. Section 1.1402(c)-
5(b)(2), Income Tax Regs., lists services which are considered
those of a minister: (1) The performance of sacerdotal
functions; (2) the conduct of religious worship; and (3) the
performance of services in control, conduct, and maintenance of
religious organizations. We also consider important whether the
taxpayer was duly ordained, commissioned, or licensed, and
whether the particular church or denomination recognized that
person as a minister or religious leader. Knight v.
Commissioner, 92 T.C. 199, 204-205 (1989); Wingo v. Commissioner,
89 T.C. 922, 934-937 (1987).
We now consider whether petitioner's responsibilities as a
"religious functionary" fell within the three types of services
of a minister set out in the regulations. Petitioner's duties
are detailed in our findings of fact. As the temple's employee,
most of petitioner's responsibilities related to some aspect of
the Jewish religion. We note, however, these duties were more
6
While "minister of the gospel" refers to clergy of the
Christian faith, Congress did not intend to exclude those persons
who are equivalent of ministers in other religions. Salkov v.
Commissioner, 46 T.C. 190, 194 (1966). Rabbis and cantors of the
Jewish faith are considered ministers who can also qualify for
the parsonage exclusion. See Silverman v. Commissioner, 57 T.C.
727 (1972), affd. in an unreported case 32 AFTR2d 73-5379, 73-2
USTC par. 9546 (8th Cir. 1973); Salkov v. Commissioner, supra at
196-197.
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organizational than religious in nature and did not require
performance from one who held ministerial authority.
Equally revealing, however, were the religious rites and
ceremonies petitioner did not perform. Petitioner admitted that
he never fulfilled the role of either rabbi or cantor. The
record displays his lack of such responsibility. Petitioner
assumed responsibility over the Bar and Bat Mitzvah students only
in the last week or two of their training and only to enhance the
efforts of the rabbi and cantor. The rabbi and cantor, however,
held the main parochial responsibilities for the students'
training.
Further, petitioner acted as the marriage ceremony director
and participated in wedding ceremonies as a witness. His
responsibilities as director, however, were mostly secular in
nature. While petitioner participated in wedding ceremonies, he
never officiated. Further, petitioner assisted the rabbi with
various functions during religious services. It was the rabbi,
however, not petitioner, who actually led those services for
which petitioner assisted. Finally, although petitioner visited
and conducted services for mourners, he, presumably, did not
officiate at the funerals.
As illustrated above, with the sole exception of conducting
services for mourners, petitioner did not regularly perform those
duties that ministers of the Jewish faith customarily perform.
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See Silverman v. Commissioner, 57 T.C. 727, 731 (1972), affd. in
an unreported case 32 AFTR2d 73-5379, 73-2 USTC par. 9546 (8th
Cir. 1973) (a cantor's performance of the following duties were
considered ministerial: Conducting religious worship,
administering sacerdotal functions, performing marriages,
officiating at funerals, leading services at houses of mourning,
and directing organizations within the congregation); Salkov v.
Commissioner, 46 T.C. 190, 195-196 (1966).
We next consider whether petitioner was ordained,
commissioned, or licensed in his capacity as "religious
functionary". The record demonstrates that he was not.
Petitioner admitted at trial that he was not an ordained rabbi or
a commissioned cantor. The fact that petitioner was recognized
as a Fellow in Synagogue Administration is irrelevant to the
above determination. First, petitioner did not hold this title
while he performed his duties with the temple. Rather, he
received this honor sometime around 1987, about 7 years after he
left the temple. Second, even if petitioner had received this
honor while performing services for the temple, this title would
not have established that petitioner was ordained, commissioned,
or licensed as a recognized religious official of the Jewish
religion. Rather, as the words Fellow in Synagogue
Administration suggest, the designation reflects that petitioner
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merely performed duties as an administrator, a primarily secular
function.
Finally, we consider whether the temple considered
petitioner its religious leader. We cannot find that it did, as
petitioner failed to present testimony or admissible evidence
establishing that the temple or anyone else viewed him that way.
Accordingly, we find that petitioner failed to demonstrate
that he was a "minister of the gospel" as specified in the
regulations and case law. As a judicial body we are loath to
evaluate ecclesiastical authority in the various religious
disciplines. We emphasis that our opinion is based on the record
before us, and our finding should not diminish the importance of
petitioner's contributions to his community.
Designation of Rental Allowance
To qualify for the parsonage exclusion, the amount paid to a
minister, to rent or otherwise provide a home, must be designated
as rental allowance pursuant to official action taken in advance
of such payment. Sec. 1.107-1(b), Income Tax Regs. The above
regulation states that a designation may be evidenced in an
employment contract, in minutes of or in a resolution by a
qualified organization, or in any appropriate instrument
evidencing such official action. Without official designation,
no exclusion is allowable under section 107. See Eden v.
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Commissioner, 41 T.C. 605, 607 (1964); Mosley v. Commissioner,
T.C. Memo. 1994-457.
Petitioner failed to demonstrate that the temple properly
designated the pension income as a parsonage allowance.
Completely missing from the record were details of the employment
arrangement in which he and the temple were engaged. In fact,
petitioner presented no evidence which even tangentially relates
to the notion of official designation.
Accordingly, we find that petitioner is not entitled to
exclude the pension income from his 1992 gross income under the
parsonage exclusion found in section 107(2).
To reflect the foregoing,
Decision will be entered
for respondent.