Paul L. Caron
Dean




Sunday, May 22, 2022

Tax Experts Say Section 107 Housing Allowance For Clergy Remains Safe Despite Recent Cases And Greedy Abuses

Christianity Today, Churches Still Depend on Clergy Housing Allowance:

Despite recent legal cases and reports of greedy abuses, experts say the longstanding benefit remains safe.

Wth the federal tax filing deadline looming, a Virginia court case may have some ministers wondering whether their ministerial housing allowance is secure.

The case isn’t about the housing allowance. But to some, including Supreme Court Justice Neil Gorsuch, it suggests courts may be willing to meddle increasingly in clergy affairs, including housing.

At issue was denial of a property tax exemption for a church parsonage in Fredericksburg, Virginia. New Life in Christ Church sought the tax exemption for a church-owned home inhabited by two youth ministers, married couple Josh and Anacari Storms. The city denied the exemption because it claimed the church’s denomination, the Presbyterian Church in America (PCA), does not allow women to be considered ministers.

New Life in Christ said the city misunderstood its doctrine. Ordination and certain duties, like preaching, are limited to men in the PCA, according to the church, but the denomination’s governing documents permit congregations latitude in hiring nonordained persons like the Stormses for various ministry jobs. Yet a trial court sided with Fredericksburg, as did the Virginia Supreme Court.

The US Supreme Court declined to hear the church’s appeal in January. Now the church must continue paying the annual property tax bill of $4,589.15. The Supreme Court’s action provoked a dissent from Gorsuch.

“The City continues to insist that a church’s religious rules are ‘subject to verification’ by government officials,” Gorsuch wrote. “I would grant the [church’s] petition and summarily reverse. The First Amendment does not permit bureaucrats or judges to ‘subject’ religious beliefs ‘to verification.’”

Is the case a harbinger of increased willingness to scrutinize ministerial housing in court? Pastors across America hope not. While fewer churches own traditional parsonages, the majority take advantage of the federal clergy housing allowance and say it benefits both their families and their churches. ...

Through the housing allowance, American pastors save $800 million a year, CT has reported, with 81 percent of full-time senior pastors taking advantage of the benefit.

The tax break is not an unfair advantage for ministers, but a way to treat ministers the same as other workers required to live near their jobs or use their homes for business, says religious liberty law firm Becket. ...

Abuse of ministerial tax breaks is one common argument against them, though. Televangelist Kenneth Copeland, for instance, saves $150,000 annually on property taxes alone at his $7 million mansion outside Fort Worth, Texas, according to a Houston Chronicle investigation published in December.

His church, Eagle Mountain International Church, also owns more than $19 million in tax-free aircraft. Copeland says God told him to build the house—which qualifies as a parsonage for tax purposes.

“You may think that house is too big,” he said at a 2015 conference. “You may think it’s too grand. I don’t care what you think. I heard from heaven.”

https://taxprof.typepad.com/taxprof_blog/2022/05/section-107-housing-allowance-for-clergy-remains-safe-despite-recent-cases-and-greedy-abuses.html

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