As far as I know, IRS Code section 119 pertains to this type of housing.
Originally Posted by danarhea
26 USC § 119 - Meals or lodging furnished for the convenience of the employer | Title 26 - Internal Revenue Code | U.S. Code | LII / Legal Information Institute
(a) Meals and lodging furnished to employee, his spouse, and his dependents, pursuant to employment
There shall be excluded from gross income of an employee the value of any meals or lodging furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer, but only if—
(1)in the case of meals, the meals are furnished on the business premises of the employer, or
(2)in the case of lodging, the employee is required to accept such lodging on the business premises of his employer as a condition of his employment.
So, for example, when the President of a University of California campus, say UC Berkeley, is provided housing as a requirement of employment, the value of the use of the mansion he gets to live in is not taxable as income.
But, as a result of the lawsuit brought by the "Freedom from Religion" activists, a Minister living in a church provided home, as a requirement of employment, must claim the use of a church provided home as income.
Perhaps the fallout from this suit will strike deeper than intended. Liberal educators will likely have some problems, if I'm reading this right.