Rev. Rul. 56-58

Advice has been requested whether the Internal Revenue Service will continue to litigate issues similar to those involved in Gideon B. Williamson, et ux. v. Commissioner , 224 Fed.(2d) 377, reversing 22 T.C. 566, James R. MacColl v. United States , 91 Fed.Supp. 721, and Conning v. Busey , 127 Fed.Supp. 958, all involving the question of whether a sum paid to a minister as part of his compensation `for house allowance' is exempt from Federal income tax within the meaning of section 22(b)(6) of the Internal Revenue Code of 1939. This problem does not arise under the Internal Revenue Code of 1954 since section 107(2) thereof excludes from gross income the rental allowance paid to ministers, to the extent used to rent or provide a home.

The court decisions in the above-cited cases to the effect that the house allowance paid to a minister is exempt from Federal income tax have been accepted by the Service.

Because this new policy is in conflict with I.T. 1694, C.B. II-1, 79 (1923), which holds that an allowance made to a clergyman to cover the cost of a parsonage is not exempt from taxation, that ruling is hereby revoked.