A minister may not claim more than one residence under the parsonage allowance exemption, based on the opinion in Comm'r of IRS v. Driscoll, issued February 8, 2012 by the Eleventh Circuit. For some time, debate has raged about this issue, both on statutory and fairness grounds, so this is an important decision.
From 1996 to 1999, Phil and Lynne Driscoll claimed a "parsonage allowance" for both their principal residence and their lake home. The Internal Revenue Service Commissioner eventually issued a notice of deficiency for the amount of the parsonage allowance allocated to the second home. The Driscolls appealed the notice, and the Tax Court held that the Driscolls were entitled to take the second allowance. The IRS Commissioner appealed to the Eleventh Circuit. After analyzing the language of the statute carefully, the three-judge Eleventh Circuit panel concluded that "a home" means one home, and reversed the Tax Court.
Driscolls' attorney planned to petition for an "en banc" rehearing before the entire Eleventh Circuit, and it is always possible, though unusual, for the U.S. Supreme Court to hear the case. While decisions of the Eleventh Circuit are only binding in Alabama, Florida, and Georgia, after this decision, any minister should take professional advice before claiming more than one housing allowance.