While neither the IRS nor the courts have addressed this question, it seems perfectly reasonable to conclude that the church can amend its housing allowance designation during the course of the year if changed circumstances render the allowance inadequate. However any changes to an allowance cannot be applied retroactively.

For example, the church runs on a fiscal calendar year that runs January to December. A proposed adjustment is made in October. The adjustment would apply for the months of October, November, and December; everything prior to October (January to September) would operate under the original housing allowance amount set heading into the fiscal year.

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