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Thread: Federal judge strikes down housing allowance for clergy

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    Dept. of Redundancy Dept. Cow Poke's Avatar
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    Federal judge strikes down housing allowance for clergy

    Federal judge strikes down housing allowance for clergy

    A housing benefit that saves clergy $800 million a year in taxes has been deemed unconstitutional by a federal judge. Under the law, housing allowances paid as part of clergy salary can be subtracted from their taxable income. Religious freedom advocates fear the ruling could force many churches in poor areas to close.
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    MADISON, Wisconsin - A federal judge in Wisconsin has struck down as unconstitutional a law that gives clergy tax-free housing allowances, in a ruling that could have far-reaching ramifications for religious leaders, who could be facing new taxes which will threaten their ministry.

    Under the federal law passed in 1954, a “minister of the gospel” doesn’t pay income taxes on compensation that is designated part of a housing allowance. The Freedom From Religion Foundation, based in Madison, argued that the law discriminates against secular employees.

    The benefit saves clergy, including non-Christian religious leaders, $800 million a year in taxes, according to the latest estimate from the congressional Joint Committee on Taxation.

    Under the law, housing allowances paid as part of clergy salary can be subtracted from their taxable income.


    Remember, this is not a debate area - if you want to debate this, please start your own thread.

    The fact is, however, that all across America, small Churches are able to pay their ministers a livable wage because they can take advantage of this tax law.

    Just make it a matter of prayer, please, because this could seriously impact hundreds of thousands of ministers, particularly in small churches, or those serving in bi-vocational roles.

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

  2. #2
    Troll Magnet Sparko's Avatar
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    Can the churches just actually pay the mortgage instead of giving an allowance?

    Also, I think that if they are afraid of people misusing this (like maybe preachers like Osteen buying tax free mansions) then they could set a reasonable limit on the allowance amount.

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    Dept. of Redundancy Dept. Cow Poke's Avatar
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    Quote Originally Posted by Sparko View Post
    Can the churches just actually pay the mortgage instead of giving an allowance?
    That would be "income", taxable. Anything that regularly benefits an 'employee' financially like that is "income".

    Also, I think that if they are afraid of people misusing this (like maybe preachers like Osteen buying tax free mansions) then they could set a reasonable limit on the allowance amount.
    There actually is a guideline...
    If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance, and the amount isn’t more than reasonable pay for your services, you can exclude from gross income the lesser of the following amounts:

    the amount officially designated (in advance of payment) as a housing allowance;
    the amount actually used to provide or rent a home; or
    the fair market rental value of the home (including furnishings, utilities, garage, etc.).

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

  4. #4
    tWebber
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    Lots of churches I have seen where I live are big is but get buy on the donations given on Sunday. Mr Holdings non profit gets buyou on donations and hearthstone subscriptions. I hope this won't make things worse for people and if possible it may be undone.

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    Troll Magnet Sparko's Avatar
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    Quote Originally Posted by Cow Poke View Post
    That would be "income", taxable. Anything that regularly benefits an 'employee' financially like that is "income".



    There actually is a guideline...
    If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance, and the amount isn’t more than reasonable pay for your services, you can exclude from gross income the lesser of the following amounts:

    the amount officially designated (in advance of payment) as a housing allowance;
    the amount actually used to provide or rent a home; or
    the fair market rental value of the home (including furnishings, utilities, garage, etc.).

    seems wacky. They can actually give you money as an allowance and it is not taxed, but if they just pay the mortgage, it counts as income?

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