Skip to comments.Federal Judge Strikes Down Housing Allowance for Clergy
Posted on 10/10/2017 6:26:00 PM PDT by marshmallow
A housing benefit that saves clergy $800 million a year in taxes has been deemed unconstitutional by a federal judge. Under the law, housing allowances paid as part of clergy salary can be subtracted from their taxable income. Religious freedom advocates fear the ruling could force many churches in poor areas to close.
MADISON, Wisconsin - A federal judge in Wisconsin has struck down as unconstitutional a law that gives clergy tax-free housing allowances, in a ruling that could have far-reaching ramifications for religious leaders, who could be facing new taxes which will threaten their ministry.
Under the federal law passed in 1954, a minister of the gospel doesnt pay income taxes on compensation that is designated part of a housing allowance. The Freedom From Religion Foundation, based in Madison, argued that the law discriminates against secular employees.
The benefit saves clergy, including non-Christian religious leaders, $800 million a year in taxes, according to the latest estimate from the congressional Joint Committee on Taxation.
Under the law, housing allowances paid as part of clergy salary can be subtracted from their taxable income.
This tax provision ensures that faith leaders like South Side, Chicago-based pastor Chris Butler receive the same tax treatment as other employees who must live in the communities they serve-like military service members, teachers, and overseas workers, Becket - a non-profit religious liberty law firm - said in a press released.
(Excerpt) Read more at cruxnow.com ...
I’m wondering if this is true or not????
This will be overturned easily.
Idiots - the law was enacted because taxation of churches is forbidden under the first amendment.
Of course the bigoted hate group FFRA intentionally lies about that.
Why was it tax-free? Isn’t this income just like everyone else in the world deals with? Sorry, while I haven’t read the ruling, seems fair to me to treat these benefits as income since the do that with everyone else.
The church is tax-free, but employees have to pay tax on income.
I lived in state housing on the grounds of two prisons. The last one I paid 147 a month. The market rental was 675. I had to pay taxes on the difference because it was benefit of my job and therefore income.
I thought it was much later (1900’s) that churches became tax free 501c3s? and gave up some rights to what they can preach from pulpit in the process?
The “housing allowance” tax deduction from income for full time employment as a religious minister is true.
The change occurred as so many ministers’ housing situation changed from simply living in a home owned by the church (a “parsonage”) and not having a home & equity in a home of their own, to being given a “housing allowance” by the church, to help defray a minister’s monthly costs of having to obtain a home of their own.
Ministers’ salaries were usually meager “back in the day” and still are. Average Christian ministers salaries before the 2008 recession began were between $25,000 and $40,000.
I guess constitutional arguments cannot be won on an income basis, and equal protection sentiments might prevail in this case.
How might the churches lobby to keep the same level of income protection their ministers now have?
I could see some of them lobbying to get the “housing allowance” deduction eligibility expanded to include anyone, not religious ministers only, who qualifies by income, with the churches lobbying for an income level like their average ministers’ incomes.
I am not proposing that, but I can envision some of our Liberal churches doing so.
Every liberal is a violent totalitarian thug.
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States."Justice John Marshall, Gibbons v. Ogden, 1824.
So the referenced federal judge is helping to unconstitutionally expand the already unconstitutionally big federal governments powers imo.
Possibly the best way for Pres. Trump to overhaul the tax code is to lead the states to repeal the ill-conceived 17th Amendment, that amendment effectively repealing the whole Constitution imo.
Patriots need to make sure that there are plenty of state sovereignty-respecting, Trump-supporting patriot candidates on the primary ballots and send these candidate patriot lawmakers to DC on election day 2018.
The founding fathers didn’t believe you tax God. Because he is the higher authority.
That’s why church properties and income are tax exempt.
As for housing allowances. Many churches used to maintain a pastoral residence that was church property.
So the question then becomes is a pastoral residence different than a housing allowance?
I’m not an a tax accountant, but I have done some bookkeeping for a few churches. The housing allowance is subject to FICA (self-employment tax for many ministers) but not federal tax. I believe because it is not considered a “wage” but an “allowance” —much the same a car allowance can be allotted (it’s not subject to federal tax either). Records must be kept to prove that the housing allowance is actually being used for housing purposes. Any amount given that is not being used for housing purposes must be declared as taxable income.
In some cases, a parsonage is provided in lieu of a housing allowance. A parsonage is usually located on the church property (which usually means the minister is available to “minister” virtually 24-hours per day). I guess it was extended to provide for those ministers to which a parsonage is not available.
I have always felt this was a very strange rule. I am aware of the history and application of the law, and there are some real interesting court cases out there. I think Rick Warren (Saddleback Church in California) prevailed in a case against the IRS in 1999 or 2000; thing went all the way to the Supreme Court. That case was on the size of his housing allowance.
Anyway, just remember this: “everyone’s a victim”. That means the clergy might become a victim since they (could) get this huge tax break taken away from them. Or maybe, you and I are the victims, because we DON”T get to take a big chunk of our income as a tax-free housing allowance.
The real bottom line is that the entire tax code is an ugly mess that hurts the majority of taxpayers, and rewards a bunch of special interest groups.
And a great many ministers are able to elect out of Social Security (i.e., FICA and Medicare) and do so.
Given the politicalization, the silence and the abdication of duty, by “the clergy”, my sympathies are somewhat dulled.
So many follow Bergoglio, with glee.
Sadly, I understand that the hand full of good bishops are affected, as well as those impoverished priests who are still fighting the Good Fight on a shoe string. God reward them.
“Judge Barbara Crabb ruled in favor of Madisons Freedom from Religion Foundation, which said the federal tax break discriminates against secular persons.
Crabb issued the same ruling in 2013, but the federal appeals court in Chicago later threw it out, saying the foundation was not directly affected and had no legal standing to file suit. That prompted the foundation to ask the IRS for the tax benefit. When it was turned down, it filed the current lawsuit.”
Satan’s motto: “Never give up!”
That’s a recent development and only after court order.
Separation of church and state used to have a very real meaning for.
But the FFRA has been adamant about twisting the propaganda that the churches are taking your tax dollars.
The housing allowance tax deduction from income for full time employment as a religious minister is true
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.