That’s a 2009 IRS “Audit Techniques Guide” that was “designed specifically for training purposes only. Under no circumstances should the contents be used or cited as sustaining a technical position.” However, it’s useful for knowing what an IRS auditor will be reading if your clergy client’s return is examined. You can find it at
https://www.irs.gov/pub/irs-utl/ministers.pdf
What I find interesting is that it claims that expenses should be pro-rated based on tax-exempt income (like housing allowance, although it uses the quaint “parsonage” term). For example, $10,000 housing allowance and $20,000 salary, only 2/3 of the expenses are allowed. This is somewhat like saying if a $200,000 inheritance is received, the $20,000 tithe to the church is not deductible because it came from exempt income. There is an interesting Tax Court “summary” opinion that does not do such a pro-ration, because IRS did not suggest it, and also seems to give the pastor an $8,000 “office in home” deduction along with a $12,000 parsonage allowance. You can find it at
https://ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=10490
