Tax court of Canada | Tax | Income tax | Employment income
Taxpayers were ordained rabbis who taught Judaic studies to children at Orthodox Jewish elementary day school. Taxpayers claimed clergy residence deduction in their income tax returns for 2011, 2012 and 2013 years. Minister of National Revenue denied deductions on basis that taxpayers were not ministering to congregation pursuant to s. 8(1)(c)(ii) of Income Tax Act. Taxpayers appealed. Appeals dismissed. Taxpayers satisfied first part of test as they were members of clergy or religious order or regular denomination but did not satisfy second part of “ministering to congregation” in s. 8(1)(c)(ii) of Act. Taxpayers’ role in teaching Judaic studies did not constitute “ministering”. Prior case narrowed scope of “ministering” by specifically carving out exception pertaining to full-time teachers of religious studies. Taxpayers were hired as teachers to teach children about Torah and Orthodox Judaism, which did not represent specialized ministry. There was no consensus that Torah education to children was in and of itself spiritual act and that its religious dimension outweighed academic dimension. Even if taxpayers’ activities did constitute “ministering”, class of elementary school students gathered for Jewish religious education was not “congregation” within s. 8(1)(c)(ii) of Act as Jewish elementary day school was not place of worship and students were not there for purposes of religious worship. Taxpayers were encouraged to provide spiritual leadership but were not expected or obligated to engage in outreach activities that would involve use of their residence. While taxpayers may have ministered to congregation of wider Jewish community, they did not earn employment income from those activities and were not entitled to deduction.
Lichtman v. R. (2017), 2017 CarswellNat 7304, 2017 CarswellNat 8488, 2017 TCC 252, 2017 CCI 252, Diane Campbell J. (T.C.C. [Informal Procedure]).
