Housing Allowance: Church vs. Minister

by Glyndon Morris
(Chester, NY)

Is there any legal reason the church cannot designate the salary as 100% housing allowance, so long as the minister, when paying the SE and income taxes only deducts those expenses allowable as housing allowance?

I am NOT a bi-vocational minister. My package is about $50K/yr. My rent and utilities is about $20K. Since I am new not only to the particular apartment I am renting, but to the entire region, I am only guessing as to the utilities. Sadly, due to poor communication and poor understanding of the tax code, my officially designated housing allowance is only $11K. So this year, I am gonna get screwed, having to pay taxes on $9K that will actually be my housing, just not included in the official housing allowance.

So next year, could the church declare that all of my $50K is official housing allowance? Of course, when it comes time to pay taxes, I would only deduct the $20K (or whatever rent+utilities actually turns out to be) and then I would gladly pay taxes on the rest.

I'm sure this is not the spirit of the law, but does it achieve the letter of the law?