The answer to this question depends on whether the pastor’s primary work location is considered to be the church or the parsonage/home. The church and pastor need to decide where the primary office is located. This involves knowing if there is an office at the church (or anywhere else) that is provided for the pastor’s work. If there is no office elsewhere and the church considers the office to be in the parsonage, then that may well be the principal place of work. For the parsonage office to count as the principal place, all of the rules of a home office as defined by the IRS would apply. So, the first question is if there is an office provided at the church for the pastor. If yes and the church considers that to be the primary work location, the miles are considered to be the pastor’s commute and not reimbursable as business miles.
If there is no other office anywhere else, the church would need to designate where they consider the pastor’s primary work location to be. If it is the parsonage office, miles count as business miles. If it is not the parsonage office, then miles to the primary location from the parsonage are commuting and not business miles. When the primary work location is not at the church, it is helpful to have the primary work location designated as such by the Board of Trustees or S/PRC for clarity.
The issue of whether the primary place of business is the parsonage office or church is determined through application of IRS guidelines for home offices (dedicated business use, etc.) and where the church considers the primary location to be. It is important to note, however, that even if it is determined that the parsonage office is the primary work location, the church is not required to pay the mileage to the church. The church can decide not to pay certain business miles even if they qualify. In that case, the pastor may be able to deduct them as unreimbursed business expenses on his/her tax return if s/he itemizes and qualifies for any deduction per the IRS rules.
See this FAQ also:
How does our church determine what mileage should be reimbursed for our pastor?