Church's liability for stating housing allowance correctly

What are the consequences if a church gives a pastor housing allowance that they shouldn't have? Does the burden fall on the pastor or the church? Thanks.

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Jun 10, 2015
Questioned housing allowance. . .
by: Lewis in NC

It is up to the pastor when he/she files federal and state income taxes and self-employment taxes to make the correct determination on this. It is even better if the correct determination happens before he/she ask the church for a housing allowance.

We as individuals, when signing our tax returns, are assuring that all is in compliance with the laws governing them.

Jun 10, 2015
Pastor's responsibility
by: Anonymous

Housing allowance is a tax break for ministers.
This is what the IRS says. Clergy Housing/Parsonage/Manse Allowance Code section 107.
"The pastor assumes full responsibility for complying with IRS definitions of "cost to provide a house."

A housing allowance paid as part of salary is not income to the extent you use it, in the year received, to maintain and furnish a home. The amount of the housing allowance that can exclude from income cannot be more than the reasonable compensation for your services as a minister.

I would think if the pastor declared a housing allowance and it is in your Board minutes. It is his/her responsibility. I am not sure how this works with the IRS if your congregation declared the housing allowance. However, I would think if you followed the "reasonable Compensation for pastoral services guideline you would be okay.

You might want to check out the IRS code section 107.

Jun 17, 2015
Church's liability for housing allowance
by: Lewis in NC

It is my understanding from reading IRC 107 that the pastor cannot "declare" his/her own housing allowance. The pastor must request approval of one by the church administration from his/her estimated housing expenses on a year to year basis.

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