Discussion:Ethical delima - take clergy housing allowance when they didn't actually live there?
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| {{ForumReplyPost|UserID=JR1|Date=April 15, 2008|Text=And then maybe gently ask, "What the heck are you DOING?????"}} | {{ForumReplyPost|UserID=JR1|Date=April 15, 2008|Text=And then maybe gently ask, "What the heck are you DOING?????"}} | ||
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| + | {{ForumReplyPost|UserID=DerekCPA|Date=15 April 2008|Text=What would the ethics of a minister who lives with someone out of wedlock be ?}} | ||
Revision as of 13:36, 15 April 2008
Discussion Forum Index --> Basic Tax Questions --> Ethical delima - take clergy housing allowance when they didn't actually live there?
Discussion Forum Index --> Tax Questions --> Ethical delima - take clergy housing allowance when they didn't actually live there?
| 15 April 2008 | |
| I often help my family members prepare their tax returns. One of my family members is a minister, so she is able to take a lot of deductions against her church-given housing allowance. As far as the housing allowance goes, only an amount exceeding her actual housing expenses is taxed.
At the end of 2006, she moved out of the home she owns, and into her boyfriend's home. Her daughter and son-in-law have continued living there. She has left her address be the home she owns, on her driver's license, her paychecks, all of her bills, and is planning on using that address on her tax return. I am unsure whether I should be comfortable preparing a return that takes a lot of deductions against her church-given housing allowance, when it's all for an address she didn't really live at. What would you CPAs do, if you had a client trying to deduct housing expenses such as their mortgage and utilities against a clergy housing allowance -- when you knew they didn't in fact live there? | |
| 15 April 2008 | |
| 1) FYI - you will find many excellent opinions on this site from non-CPAs.
2)Just pulled this from one of my research things: In order for a rental allowance to be excludable, it must actually be used to rent or otherwise provide a residence. Even though such an allowance doesn't exceed the fair rental value of the home, it isn't excludable where the clergyman owns his own home and doesn't spend any part of the allowance for mortgage payments, insurance, taxes, utilities, maintenance, repairs, improvements, fixtures, appliances, or furnishings for the residence. Swaggart, Jimmy, (1984) TC Memo 1984-409 , PH TCM ¶84409 , 48 CCH TCM 759 The key part is "provide a residence". In your case I would read that as "provide a residence for her". She may still be able to deduct some of the expenses she pays at her boyfriends (utilities, maintenance) but probably not much. I would appeal to her ethical side: present her the above info and ask her to think about what she wants to do. If she asks you how much it will cost her tell her that shouldn't matter - what should matter is if she is entitled to the benefit. Hopefully she will agree. If not, I would tell her that I am not comfortable (assuming you aren't comfortable) filing a return like that (mention the $5,000 preparer penalty for fraud). That's my penny's worth | |
| 15 April 2008 | |
| What would the ethics of a minister who lives with someone out of wedlock be ? | |
