Judge strikes down law that gives clergy members tax-free housing allowances

[danarhea]

A federal judge has found unconstitutional a law that lets clergy members avoid paying income taxes on compensation that is designated part of a housing allowance.

I agree with this decision. In giving clergy members special treatment over everybody else, when paying taxes does not hinder their ability to do their job, the establishment clause of the US Constitution is violated.

I guess I don't need to beat the IRS by forming my own religion now. LOL.

Article is here.

 

[PeteEU]

I guess I don't need to beat the IRS by forming my own religion now. LOL.

Yes you can. Scientology is based on this idea.

 

[ttwtt78640]

I agree with this decision. In giving clergy members special treatment over everybody else, when paying taxes does not hinder their ability to do their job, the establishment clause of the US Constitution is violated.

I guess I don't need to beat the IRS by forming my own religion now. LOL.

Article is here.

Indeed a silly law, but also easy to work around, for the most part; simply have the church drop the housing allowance and lease/buy the property directly then allow their clergy to live there rent free.

In many cases property owned by/used by a church is also exempted from local property taxation.

 

[Paschendale]

Indeed a silly law, but also easy to work around, for the most part; simply have the church drop the housing allowance and lease/buy the property directly then allow their clergy to live there rent free.

In many cases property owned by/used by a church is also exempted from local property taxation.

And it shouldn't be. Religious organizations shouldn't get that special treatment.

 

[ttwtt78640]

And it shouldn't be. Religious organizations shouldn't get that special treatment.

Neither should "non-profit" organizations, or businesses that lobby for special treatment, but that is the nature of politicians; to please (reward?) those that support them so long as the voters do not object by not re-electing them.

80% of the federal income tax code is devoted to deductions, credits, exclusions, exemptions and allowing use of clever accounting schemes to offer "special" treatment of those that lobby our congress critters on behalf of campaign contributors.

 

[Tigger]

And it shouldn't be. Religious organizations shouldn't get that special treatment.

You do realize that by taking such things away you will turn Religious organizations and institutions into for-profit groups and likely take away most or their ability to do charity work, correct? Most churches barely break even, nevermind running a profit. Forcing them to pay more would put a large number of them out of business overnight.

 

[Kreton]

You do realize that by taking such things away you will turn Religious organizations and institutions into for-profit groups and likely take away most or their ability to do charity work, correct? Most churches barely break even, nevermind running a profit. Forcing them to pay more would put a large number of them out of business overnight.

Or more realistically cut expenses.

 

[Tigger]

Or more realistically cut expenses.

I don't know how many small-medium size churches you've spent time in over the years, Kreton. I grew up in them, my grandfather was the presiding pastor of one, and I still occasionally spend time in them. Very few of them are able to maintain their current monthly budgets as is. They get by on a yearly basis due to the late year added giving from the ETC (Easter, Thanksgiving, Christmas) members who generally show up in December and do most of their giving at that time. I'm not talking about extravigant churches with 2500 square foot chapels, stained glass in every window, a paid staff numbering in the dozens, and all the trimmings. I'm talking the average congregations. There isn't much for them to cut in most cases.... except maybe the budget for missions work.

Are you suggesting that churches start charging membership or attendance fees?, because if not I'm not sure how you suggest that most small-medium size churches would be able to stay afloat if they lost their tax exempt status.

 

[notquiteright]

Indeed a silly law, but also easy to work around, for the most part; simply have the church drop the housing allowance and lease/buy the property directly then allow their clergy to live there rent free. In many cases property owned by/used by a church is also exempted from local property taxation.

true but a pastor receiving the housing would have to claim the rent value as income. Preachers are subject to income tax, which includes compensation such as use of a Church vehicle for non religious errands, the gas that vehicle uses if the Church provides that. The IRS doesn't go through tax returns that closely but the rules are pretty simple about what counts as income.

 

[Dittohead not!]

From the link in the OP:

Clergy may exempt from taxable income up to the fair market rental value of their home, a measure particularly helpful to well-heeled pastors, Gaylor said.

“When you’re dealing with some of these mega-church pastors with huge mansions, they can be paid an enormous amount in housing allowances,” she said.

On its website, GuideStone, a Christian financial services provider based in Dallas, calls the housing allowance “the most important tax benefit available to ministers.”

sounds to me like a government subsidy for ministers, which would be a violation of the Constitution. My tax money shouldn't go to support religion, should it?

While there at it, maybe they could take a look at some of the other exemptions and exclusions that are unfair to the rest of the taxpayers.

 

[notquiteright]

I don't know how many small-medium size churches you've spent time in over the years, Kreton. I grew up in them, my grandfather was the presiding pastor of one, and I still occasionally spend time in them. Very few of them are able to maintain their current monthly budgets as is. They get by on a yearly basis due to the late year added giving from the ETC (Easter, Thanksgiving, Christmas) members who generally show up in December and do most of their giving at that time. I'm not talking about extravigant churches with 2500 square foot chapels, stained glass in every window, a paid staff numbering in the dozens, and all the trimmings. I'm talking the average congregations. There isn't much for them to cut in most cases.... except maybe the budget for missions work. Are you suggesting that churches start charging membership or attendance fees?, because if not I'm not sure how you suggest that most small-medium size churches would be able to stay afloat if they lost their tax exempt status.

I grew up around both small town tiny little churches and mega churches. There is a disconnect between serving GAWD and many religions. There is also a difference between the pastor and the church. frankly I see many 'store front' Churches that serve no one but the pastor and allow Law Enforcement to levy an additional charge in some crimes...

I see the huge First Baptist church and the tiny Catholic one in my hometown. I see inner city Catholic schools close while 'His Eminence' lives a very luxurious life. Sad but it seems wealth, or lack thereof, of the faithful does figure into the health of a Church, I don't think making a Preacher pay income tax on his lodgings is out of line.

Certainly might take a bite out of the dozens of 'store front' churches I see as 95% for the tax dodge, and might cause the mega church preacher a bit more mindful of how Jesus really lived.

My thought on the 3bees- if the Church has a large but lax following perhaps the fault doesn't lie with the tax code.... eace

 

[Captain America]

You do realize that by taking such things away you will turn Religious organizations and institutions into for-profit groups and likely take away most or their ability to do charity work, correct? Most churches barely break even, nevermind running a profit. Forcing them to pay more would put a large number of them out of business overnight.

Hey, let the free religious market decide. Are you endorsing a bail-out of some sort or some sort of socialist agenda in regard to churches? Are they too big to fail like the auto industry or banks?

I find it strange that some folks in our country would just as soon let a baby starve before approving the government to step in and help out. But are quick to approve of corporate welfare subsidiaries, foreign welfare or church welfare such as you seem to be suggesting.

 

[j-mac]

sounds to me like a government subsidy for ministers, which would be a violation of the Constitution. My tax money shouldn't go to support religion, should it?

Surely you know that if the door is opened to tax religious clergy, and church's that could invariably lead to government excluding religion from society in this country....And I think there might be a little problem of the 1st amendment for you to get around...."nor the free exercise thereof."

 

[ttwtt78640]

true but a pastor receiving the housing would have to claim the rent value as income. Preachers are subject to income tax, which includes compensation such as use of a Church vehicle for non religious errands, the gas that vehicle uses if the Church provides that. The IRS doesn't go through tax returns that closely but the rules are pretty simple about what counts as income.

Nonsense. Care to back up that bold assertion? Do you think that GIs pay tax on their rent free barracks room? Do you think an apartment maintenance man pays tax on their rent free apartment? Do you think that police officers pay taxes on their take home police cars?

 

[notquiteright]

Nonsense. Care to back up that bold assertion? Do you think that GIs pay tax on their rent free barracks room? Do you think an apartment maintenance man pays tax on their rent free apartment? Do you think that police officers pay taxes on their take home police cars?

Ummm I was addressing the new ruling. The preacher doesn't skate on paying income tax if the Church provides the house. Troops don't pay because the feds don't pay income tax to itself... the maintenance man depends on the apartment owner. if the owner writes off the 'loss' of income for not collecting rent then the handiman has to claim the amount as additional income. there is no tax exempt status for maintenance men.

The take home car is not for personal use but for business, just like the tax exemption I get for farm use vehicles and their fuel. the tax code is what it is.

 

[ttwtt78640]

Ummm I was addressing the new ruling. The preacher doesn't skate on paying income tax if the Church provides the house. Troops don't pay because the feds don't pay income tax to itself... the maintenance man depends on the apartment owner. if the owner writes off the 'loss' of income for not collecting rent then the handiman has to claim the amount as additional income. there is no tax exempt status for maintenance men.

The take home car is not for personal use but for business, just like the tax exemption I get for farm use vehicles and their fuel. the tax code is what it is.

There is no add value of free rent/car use line on a tax form either.

 

[Kreton]

I don't know how many small-medium size churches you've spent time in over the years, Kreton. I grew up in them, my grandfather was the presiding pastor of one, and I still occasionally spend time in them. Very few of them are able to maintain their current monthly budgets as is. They get by on a yearly basis due to the late year added giving from the ETC (Easter, Thanksgiving, Christmas) members who generally show up in December and do most of their giving at that time. I'm not talking about extravigant churches with 2500 square foot chapels, stained glass in every window, a paid staff numbering in the dozens, and all the trimmings. I'm talking the average congregations. There isn't much for them to cut in most cases.... except maybe the budget for missions work.

Are you suggesting that churches start charging membership or attendance fees?, because if not I'm not sure how you suggest that most small-medium size churches would be able to stay afloat if they lost their tax exempt status.

I am saying that many small to mid size churches have many expenses that are not crucial. And yes missions work is included and could be cut. Also no where in my post did I mention charging membership or attendance fees. The fact is most churches spend a decent amount of money on missions, harassing people and various other activities that would easily cover the cost of the taxes.

 

[j-mac]

I am saying that many small to mid size churches have many expenses that are not crucial. And yes missions work is included and could be cut. Also no where in my post did I mention charging membership or attendance fees. The fact is most churches spend a decent amount of money on missions, harassing people and various other activities that would easily cover the cost of the taxes.

:roll: Another anti religion advocate. So, you really aren't concerned with the ramifications, or history of religion persecution, but rather just delight in any damage you can cause it....What did religion do to you that you feel such hate for it?

 

[Tigger]

I grew up around both small town tiny little churches and mega churches. There is a disconnect between serving GAWD and many religions. There is also a difference between the pastor and the church. frankly I see many 'store front' Churches that serve no one but the pastor and allow Law Enforcement to levy an additional charge in some crimes...

On that we will agree.

I see the huge First Baptist church and the tiny Catholic one in my hometown. I see inner city Catholic schools close while 'His Eminence' lives a very luxurious life. Sad but it seems wealth, or lack thereof, of the faithful does figure into the health of a Church, I don't think making a Preacher pay income tax on his lodgings is out of line.

Yes, the wealth of the congregation does figure into the health of a church. I won't/can't speak for the Catholic Church and its heirarchy since that's not something I am intimately familiar with. I do see that doing this would force churches to decrease the monies available for things like missions and outreach work.

Certainly might take a bite out of the dozens of 'store front' churches I see as 95% for the tax dodge, and might cause the mega church preacher a bit more mindful of how Jesus really lived.

It would put the storefronts out of business ASAP. The mega church groups would not really be affected.

My thought on the 3bees- if the Church has a large but lax following perhaps the fault doesn't lie with the tax code.... eace

How about when a church has a large following but simply doesn't have money? Inner cities. Small midwestern towns. Things like that.

Hey, let the free religious market decide. Are you endorsing a bail-out of some sort or some sort of socialist agenda in regard to churches? Are they too big to fail like the auto industry or banks?

I find it strange that some folks in our country would just as soon let a baby starve before approving the government to step in and help out. But are quick to approve of corporate welfare subsidiaries, foreign welfare or church welfare such as you seem to be suggesting.

I am endorsing the idea that if the Government wants to remove the tax advantages from churches and church workers, that they need to do the same for other non-profit organizations. If the church is supposed to be separate from the Government, then how can the Government expect to collect taxes from it. This is not a subsidy or welfare, this is simply a separation of secular and religious worlds. Nothing more.

I am saying that many small to mid size churches have many expenses that are not crucial. And yes missions work is included and could be cut. Also no where in my post did I mention charging membership or attendance fees. The fact is most churches spend a decent amount of money on missions, harassing people and various other activities that would easily cover the cost of the taxes.

I think you'd find that "Missions" are a major requirement of the ministry of most churches. There is not a whole lot for most of these chuches to cut. The majority of them run on very tight budgets already and losing their tax exempt status would mean either having to find new forms of revenue (membership fees, attendance fees, etc....) or go out of business. It would definitely force them to cut the availability of their property to other non-profits like the BSA, many support groups, etc....

 

[Kreton]

:roll: Another anti religion advocate. So, you really aren't concerned with the ramifications, or history of religion persecution, but rather just delight in any damage you can cause it....What did religion do to you that you feel such hate for it?

You dont know what so ever, nor have I ever said anything to indicate hatred for a religion. Get off your high horse and stop trying to guess at things and instead try to address what was actually written.

 

[Paschendale]

Neither should "non-profit" organizations, or businesses that lobby for special treatment, but that is the nature of politicians; to please (reward?) those that support them so long as the voters do not object by not re-electing them.

80% of the federal income tax code is devoted to deductions, credits, exclusions, exemptions and allowing use of clever accounting schemes to offer "special" treatment of those that lobby our congress critters on behalf of campaign contributors.

That's an entirely different subject. Some deductions and tax credits and the like are there for a good reason. Certainly they can and should be evaluated on their merits. This one severely lacks merits. But the special treatment that religious organizations enjoy is a violation of the first amendment. The government should not giving religious organizations special tax breaks merely for being religious.

 

[Kreton]

I think you'd find that "Missions" are a major requirement of the ministry of most churches. There is not a whole lot for most of these chuches to cut. The majority of them run on very tight budgets already and losing their tax exempt status would mean either having to find new forms of revenue (membership fees, attendance fees, etc....) or go out of business. It would definitely force them to cut the availability of their property to other non-profits like the BSA, many support groups, etc....

If the church cant afford the missions then so be it. It will not stop or prohibit people from attending a service or worshipping.

 

[ttwtt78640]

That's an entirely different subject. Some deductions and tax credits and the like are there for a good reason. Certainly they can and should be evaluated on their merits. This one severely lacks merits. But the special treatment that religious organizations enjoy is a violation of the first amendment. The government should not giving religious organizations special tax breaks merely for being religious.

No, but it is a violation of the 14th amendment. It does not establish any particular national religion, but it does offer unequal protection of the law.

 

[notquiteright]

There is no add value of free rent/car use line on a tax form either.

Not the issue- self employed report their income.

Now back to the house. The Church buying the house and then allowing the self employed preacher to live there doesn't negate the preacher from having to claim a fair market value for the use of a home. What might be even more interesting is if the house is ruled to be income property and not Charitable property like a soup kitchen or homeless shelter.

 

[ttwtt78640]

Not the issue- self employed report their income.

Now back to the house. The Church buying the house and then allowing the self employed preacher to live there doesn't negate the preacher from having to claim a fair market value for the use of a home. What might be even more interesting is if the house is ruled to be income property and not Charitable property like a soup kitchen or homeless shelter.

You are way out there now, since the clergy are not self employed - they are paid employees of the church.