Tax court rules in favor of 38 “ministers”
A judge in the Tax Court of Canada has ruled that 38 individuals, all working for Christian organizations and denied clergy housing deductions by Revenue Canada, are eligible to receive these deductions. The same judge ruled against another eight persons.
The February 26 decision by Judge D.G.H. Bowman followed many weeks of hearings throughout most of 1998.
The 46 cases were supported by the Canadian Council of Christian Charities (CCCC) and cost nearly $2 million in legal fees and other expenses.
"We're obviously quite pleased," says CCCC executive director Frank Luellau of Elmira, Ontario. "We clearly expected to come out mostly on top, but not one of these [cases] were guaranteed results."
What is an order?
The cases included Bible college presidents, heads of organizations, missionaries and fulltime ministry workers. The judge was given the task of determining whether each organization was the equivalent of a religious order, and whether the individual concerned was a "minister" of a "congregation" or in fulltime administrative work and appointed by a denomination.
Bowman ruled that Christian Horizons, an Ontario organization which provides homes for the mentally handicapped, is in fact a religious order, and that all 25 appellants are members of that order. Their assessments will be referred back to the Minister of National Revenue for reconsideration.
Executive director Noel Churchman is pleased with the ruling. "It's good for us," he says. "We had asked for a ruling on being a religious order some years ago. This reaffirmed what they had said earlier."
Christian Horizons has been paying the taxes on behalf of its staff, an amount Churchman estimates is more than $100,000. Unless Revenue Canada appeals the decision, the organization will be rebated the amount.
In another group of cases involving Youth For Christ and The Navigators of Canada, Bowman ruled that YFC is a religious order and the Navigators is not.
Bowman said he found a "significant distinction" between the Navigators and other organizations. "A large part of their concentration and published material is on how to raise money and many of them appear to earn substantial incomes and live comfortable middle-class lives."
Navigators of Canada president Ross Rains is "profoundly disappointed that six of the seven Navigator staff claims for the 1992-1994 period which Revenue Canada brought to court were denied.
"At the same time we are happy for one clear win and the overall victory of so many other taxpayers representing other religious orders in Canada." The judge made an exception for one Navigator's employee, William Lee, who also ministers to a Chinese congregation in Vancouver.
"We are leaving it to the CCCC and their legal counsel to lead the way in seeking to achieve clear guidelines for the future," continues Rains. "We are reviewing our options during this appeal period [and will] wait to hear from Revenue Canada as to what the implications will be for us."
Regarding YFC, Bowman decided that the three workers who had been reassessed by Revenue Canada are indeed ministers. One of them, Sherryl Koop, is a chaplain to young offenders at two Winnipeg youth detention centres.
"I find the denial of the deduction to Sherryl Koop little short of startling," Bowman wrote in the judgment.
Koop says she is "very grateful" for the decision. "It means that I can continue to claim the deduction," she says. "I'm no longer a 'red flag' case" for Revenue Canada.
Tim Nielsen, general director of Indian Life Ministries in Winnipeg, was disallowed on the basis that he was not appointed to his position by his denomination. A commended worker from a Brethren assembly (the Brethren equivalent of an ordained minister), Nielsen has a letter of commendation but it does not specifically appoint him to his position with Indian Life.
The CCCC had not argued that Indian Life (a division of Intertribal Christian Communications) is a religious order, because it did not feel it was necessary if Nielsen was a commended worker.
Nielsen is disappointed but pleased with the overall outcome of the cases and the work of the CCCC on his behalf. "The Lord has been very gracious to us," he adds. A friend has offered to pay the amount owing, which could be about $15,000.
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