BreakPoint: Freedom From Religion and Your Pastor’s Taxes

Alert Your Ministers Now!

The Freedom From Religion Foundation has targeted the ministerial housing tax exemption. But it’s something that is worth saving.

Last October, a federal district court judge in Wisconsin ruled that the tax exemption for ministerial housing allowances is an unconstitutional establishment of religion.

The ruling came in response to a challenge by, you guessed it, the Freedom From Religion Foundation.

Now the dollar amount involved is pretty small (about $800 million), but the impact of ending the exemption would be significant, not only for clergy, but for the entire country.

Here’s the deal. The Internal Revenue Code (26 U.S.C. § 107) exempts the value of housing provided to what it calls “ministers of the Gospel” from gross income for purposes of income tax.This exemption also covers non-Christian clergy, and it covers both the rental value of the home if provided by a congregation or an allowance paid to the minister in lieu of providing housing.

The exemption predates the Internal Revenue Code, which was enacted in 1954. In fact, its origins had little to do with religion. It grew out of what is known as “the convenience of the employer” doctrine. This doctrine applied to “employees who had very little say in the place of their residence or where they ate meals.” Beside ministers, the doctrine has benefited, among others, ranch hands, innkeepers, military personnel, even the President of the United States.

By allowing ministers to take the housing allowance exemption, Congress wasn’t “establishing religion” at all. It was ending a kind of discrimination against religion. It was putting pastors on the same footing as other similarly-situated employees. And it’s important to note that the exemption only applies to “income tax.” The ministerial housing allowance isn’t exempt from the self-employment taxes ministers pay, like Social Security and Medicare.

And, we should note, many ministers, unlike the rest of us, pay both the employee and employer share of these taxes. In other words, they’re already being taxed 15.3 percent on their housing allowance. Overturning Section 107 without taking into account the self-employment tax issue would recreate the problem that Congress tried to fix with the housing allowance in the first place. Namely, ministers would be uniquely disadvantaged tax-wise.

Imposing an additional financial burden on ministry would be especially devastating to smaller and poorer churches (which are the majority of churches in America) where the housing allowance might even be the bulk of the minister’s compensation.

In other words, the Wisconsin judge’s ruling would “remedy” a non-existent establishment of religion problem by creating a real-world free exercise problem.

And that’s probably what the people who are challenging the exemption want in the first place.  To create a world “free from religion” requires denying and diminishing the impact of faith on our society.

I don’t mean just the intangible benefits, as important as those are; but the material and social benefits. The economic contribution of religious bodies to the American economy has been estimated at over $1 trillion. Substantial portions of the care delivered to poorer and needier Americans come from religious people working through their congregations and other ministries. Think about schools, hospitals, shelters, food banks, and on and on and on.

Those who want churches out of the public square are out of their minds if they think the government can provide all the services that churches and religious organizations perform.

For now, the ruling has not taken effect and is being appealed to the Seventh Circuit Court of Appeals. And that’s where I and our friends at Alliance Defending Freedom are asking you to jump in.

Alert your pastor or ministers. Tell them to go to MinisterHousing.com and sign on to a “friend of the court brief.” Let the court know how important the ministerial housing allowance really is.

Please don’t wait. We need ministers to make their voices heard by April 23rd. Again, tell them to go to MinisterHousing.com.

 

Freedom From Religion and Your Pastor’s Taxes: Alert Your Ministers Now!

As John said, let the court know how important the ministerial housing allowance is. Tell your pastor to sign the “friend of the court brief,” sponsored by Alliance Defending Freedom, by going to MinisterHousing.com.

Churches in America face legal challenges that were unimaginable even a few years ago. Today, it is not a question of if churches will be threatened or sued for standing true to God’s Word – the question is when and where such cases will arise. The Church Alliance provides focused and practical legal help for churches of all sizes and denominations. Members receive a religious liberty audit, including a legal review of church bylaws and policies that relate to protecting religious liberty. They also have direct access to attorneys, specialized resources, and more. The Church Alliance offers pricing that is affordable and allows your church – no matter its size – to become a member.  To join today or learn more, please visit https://www.adfchurchalliance.org.

 

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  • Scott

    “Those who want churches out of the public square are out of their minds if they think the government can provide all the services that churches and religious organizations perform.”

    Many are naive as John’s statement above suggests… but some know this and don’t care. Think eugenics, physician assisted suicide, abortion… “culture of death.” Through all these ideas (and many more) there is definitely a push to eliminate those dependent upon others for help. Even our own cultural emphasis on the “self made man (or woman)” echoes this.

    All the concepts listed above make an attempt to eliminate the marginalized… Christ healed and served them. Aren’t those concepts what we might call anti-Christ thinking?

    • Ryan Scott Grafton

      And war, Scott. These socialist policies simply pass the brunt of inequality down the line until someone gets fed up and pushes back hard. Socialism breeds war. It may take almost an entire generation, but that’s what the FFRF and other organizations like them are intentional about.

      • Scott

        Just more anti-Christ thinking… If the FFRF got what they ask for they wouldn’t like it. unfortunately they will eventually… if not in this life.

        War = culture of death.

  • Robert Cremer

    The FFRF is not about freeing anybody from religion but rather to enslave the rest of us to their religion.
    If the FFRF got what they wanted, they would soon discover that they were not happy with it. There would be no way the FFRF leadership could stop the people they had “freed”, from doing whatever they wanted to do. Without a fear of God and eternal consequences, you can shoot down anybody for fun. Including the FFRF leadership! I think Chuck Colson said something like, without God there is no bases to be civilized.

    • gladys1071

      That is actually not true. Though I agree fear of God is good, religious people are no better, ever heard of the inquisition?

      The truth of the matter human beings have always tried to rule over others by force, believing in God does not change that tendency they humanity has to try to rule with an iron fist.

      Until sin is eradicated the struggle will continue, their are no good guys only bad guys.

      • Just One Voice

        Yeah, believing in God doesn’t change it. Does submitting to Him change that though? It seems active submission to and following Jesus require much more humility than mere belief.

        I agree with your main point though for sure. Right here is where I did a search for the verse that says “no one is good.” I came to find out that Psalm 14 and 53 say the same thing! I’ve read Psalms many times, but never knew that. Verses 2 and 3 are the onesI was thinking about:

        God looks down from heaven on the children of man to see if there are any who understand, who seek after God. They have all fallen away; together they have become corrupt; there is none who does good, not even one.

        • gladys1071

          thank you, human beings are too corrupted and when you give a corrupt human being power, you have tyranny, that is the default state of humanity.

          I think the way we have it now is the best we will have it. We have the most freedom to believe and worship as we want without persecution, that is rare in human history.

          I am grateful that i am alive in this time and in this country.

        • Scott

          “Does submitting to Him change that though? It seems active submission to and following Jesus require much more humility than mere belief.”

          There it is! I believe the answer to your question is yes. Well said. : – )

      • Robert Cremer

        Yes, I agree the inquisition was wrong. But it had nothing to do with the teachings and values of Jesus. It was an abuse of the religious power structures for political, economic and social purposes. The original founders of the FFRC – Hitler, Stalin, Mao and Pol-Pot are the cause of the deaths of hundreds of millions. Backing the FFRC is a no win situation.

        • gladys1071

          I don’t back anyone, human beings abuse power no matter what.

          This is not an US verses them scenario.

          • Scott

            By saying this you are condemning all those who spend their lives trying to do good for others and the world they live in?

            If you believe in evil… then one could consider that we live in a good vs. evil scenario.

    • Scott

      “I think Chuck Colson said something like, without God there is no bases to be civilized.”

      True… without God there is no basis to be civilized. If you follow atheism to its root that is what you will find (you vs. me). He also said something about following ideas to their root. : – )

      • Robert Cremer

        I agree with a slight modification. At the root of true Christianity you find “Christ”. At the root of Atheism you find only “self”. Yes, a stark difference.

  • PB Fresh

    “Overturning Section 107 without taking in to account the self-employment tax issue would recreate the problem Congress tried to fix with the housing allowance in the first place. Namely, ministers would be uniquely disadvantaged tax-wise.”

    You mean disadvantaged in the same way other self-employed people are?
    There is no disadvantage here. If they can’t afford their housing and the taxes on it, they need a raise, the same as everyone else. If the congregation wants to “gift” housing to them, then the least they can do is pay taxes on it’s value like everyone else.

    The real issue is that most ” housing” falls into 2 categories.
    1) Housing attatched to the Church itself, which is either long paid for or depreciated tax-wise as a “double dip ”
    2) Extravagant housing built with flock monies to worship the “Man-God” ( or Woman-God, where allowed) on the alter, that they perceive as a facilitator to salvation via their approval as the interpreter of scripture. In other words, if we give the Minister a big house, he will tell God what faithful followers we are.

    This is semantics used to avoid paying taxes. The congregation is clearly willing to put up the extra money for housing without question, why not roll the money into the salary and put some transparency into the process. In fact, it would then become the minister’s personal income to spend as they see fit. They might just find a more economical living space, more in line with a life of sacrifice, and have some left over to feed one more homeless family. Even one meal.