Federal District Court Declares A Religious Income Tax Exemption Unconstitutional

[cbayer]

http://thenewcivilrightsmovement.com/breaking-federal-district-court-declares-a-religious-income-tax-exemption-unconstitutional/politics/2013/11/22/79158#.UpEYKaWlpBU

by DAVID BADASH on NOVEMBER 22, 2013



A federal district court judge has declared “unconstitutional” a portion of U.S. law that allows “a minister of the gospel” to not pay income tax on a specific portion of their compensation.


U.S. District Court Judge Barbara B. Crabb of the Western District of Wisconsin ruled that the so-called “parish exemption,” which allows religious ministers to avoid paying taxes on the value of their housing granted to them by their religious employers, “violates the establishment clause” of the U.S. Constitution and must be discontinued.

The law, 26 U.S. C. § 107(2), has been on the books since 1954.

The tax exemption was estimated to cost U.S. taxpayers $2.3 billion from 2002-2007 alone, likely more in the years since.

more at link

[okasha]

1. I wonder what it's going to cost the IRS--

ie., us--to determine the fair market value of every rectory in the country, then keep that value current from year to year.

[cbayer]

4. Don't know, but I think this is actually ok.

I grew up in parsonages, so I tend to be biased towards them. They function as more than the ministers home and are usually quite basic.

OTOH, I think it's a good idea for churches to have the same tax advantages as other 501(c)3 corporations and not extra ones. Otherwise it does give them special advantages and less of a leg to stand on for claiming their rightful non-profit status.

[eomer]

10. I don't believe the IRS would do that.

The taxpayer would. And they have the option of paying a cash allowance instead of providing free housing, if they don't wish to have to establish a value of the free housing. If they pay a cash allowance then there's no need for anyone to establish the value of any house.

[hrmjustin]

2. That will be hard on clergy here in NYC I know.

[okasha]

3. Much harder

Last edited Sat Nov 23, 2013, 09:44 PM - Edit history (1)

on clergy in NYC than in, say, Hebbronville,Texas. I wonder how that inequity will be addressed. Of course, a church could always add the value of the housing to the pastor's paycheck, then collect it as rent each month.

[hrmjustin]

6. I hope they pay them m8re. Rents here are horrible.

[okasha]

8. They'll have to.

$500.00 will get you a large, very nice house in small-town Texas. From what I know about NYC, that might pay for small closet there.

[cbayer]

5. The churches are clearly going to have to increase base compensation.

If the house is partially used for business purposes, which most are (meetings, dinners, offices, counseling, etc.), there will still be legitimate deductions for that part.

Overall, I'm not opposed to changing this.

[hrmjustin]

7. Most Episcopal parishes have a house for the rector, but assisting clergy live off site.

[dimbear]

9. Once more, my friends. Who stands up for separation of church and state? Who chips a little chip

off the mountain of religious privilege? Did you guess ultra-liberal Christians? Did you guess Muslims or Jews? Or...........ding ding ding..........did you correctly guess seculars in the person of the tiny but feisty FFRF?