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This concept is extremely aggressive. Based on the position of the IRS taken in the Minister Audit Technique Guide, it is highly likely the IRS would challenge such a practice and could expose the minister to intermediate sanctions if they determine the dollars considered tax-free to be taxable. So, a word to the wise church and pastor is to forget about aggressive positions that are sometimes passed along from one pastor to another as the latest-greatest way to save taxes.

Dan Busby is a certified public accountant, president of the Evangelical Council for Financial Accountability (ECFA), and the author of the Zondervan Clergy Tax & Financial Guide.