Under this rule, ministers must reduce their business expense deduction by the percentage of their total compensation that consists of a tax-exempt housing allowance.

And, the employee will not be able to claim a business expense deduction since he or she has inadequate records.

Ministers cannot claim a business expense deduction for unreimbursed club dues that they pay themselves.

If this pastor had $4,000 of business expenses, his or her business expense deduction would be reduced from $4,000 to $3,000.

In order to claim a business expense deduction on his tax return he will need to produce a receipt for each separate expense of $75 or more.