"Stringent enforcement of 501(c)(3) could generate up to $16.75 billion in additional annual revenue - almost enough to fund NASA"

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Jim's picture

Hard to argue against this ...

 

Cragun doesn't think the U.S. will ever tax churches like corporations but, like the coalition, he thinks there should be additional reporting and auditing of churches, and that certain exemptions should be eliminated.

For example, the parsonage exemption allows clergy members to deduct their homes' upkeep, furnishings, and utilities, in addition to rent, mortgage payments or even the cable bill.

Greg Linscott's picture

Hard to argue? Why? It has been these kind of exemptions that has allowed small churches in small towns to be able to support their own pastors. Though there may be admittedly some who have used these things to unreasonable advantage, there are many pastors' families whose homes often double over not only as a personal residence, but as a place where they host and entertain guests (often because of connections established through church ministry). Some have space in their houses for an office or study.

Jim, you just throw it out there like the conclusion is obvious. But if those exemptions aren't there, it isn't like that will produce income for the government magically out of the air with no repercussions. A church like yours would have to fund multiple salary increases for your staff to have a wage that would allow them to maintain the living standard they have become accustomed to. You might even have to eliminate positions. Missionary activity would be impacted, too. There things might be inevitable and out of our hands, but I don't think it is a "no brainer" or not worth discussing.

Greg Linscott
Marshall, MN

Jim's picture

First of all Pastors should be paid and they should be paid well. 

You and I agree on this so my comment about the housing allowance is not an argument that Pastors should not be adequately compensated. 

Would elimination of the housing allowance be negative for churches? Yes in the short term ... probably a wash in the long term.

If the housing allowance were eliminated (and I think it will be .... just a matter of time), churches will need to pay their pastors more. And they should .

In response to this comment:

.... homes often double over not only as a personal residence, but as a place where they host and entertain guests (often because of connections established through church ministry). Some have space in their houses for an office or study.

Same could be said for many business persons (except strike "church ministry" and replace it with "their business")

 

Jay's picture

Nice trick. This 'helpful' idea serves two purposes - punishes speech that the Secular Coalition for America would oppose -AND- attacks the viability of religious institutions in general. But the government will make money! Woo Hoo! :-/

Churches need to start planning NOW for the revocation of 501(c)(3) privileges. It's going to happen in our lifetime.

I agree with Jim that abuses should be examined, but that's why the IRS has agents - to investigate abuse.  This proposal smells and looks like a trojan horse to me.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Sean Fericks's picture

I agree with Greg that a significant change in tax policy would make most ministries consolidate, and it would probably financially ruin others.  However, one cannot deny that, as a nation, we are subsidizing religion.  As fundamentalists, we should also recognize that most of what we subsidize is "false gospel" religion.  The church should be able to stand on its own, not be propped up by federal tax policy.  We should depend on God's grace, not government subsidy.

Also, think about the bad testimony we (very broad use of "we") exude when we demand the exemption, but violate the intent of the policy (abusive televangelists with mansions and private jets), or we violate the restrictions that come along with the subsidy (pulpit freedom Sunday / old BJU dating policies).  You can't have your cake and eat it.  If we truly want to be free from government oversight, if we want to avoid the stigma of the "special interest", we should stop feeding at the federal pork bin.

Finally, I think most of us on this site would consider ourselves to be in favor of small government with a role limited by the Constitution.  We would argue for equal protection under law.  Why then do we defend our own little federal perk?  This is just not consistent.

Jim's picture

There is a provision for home office in the tax code

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Offi...

In sum how it works (and I will use self for example):

  • I have a home office. It's our den and is only  used for an office. 
  • Both my wife and I work for a financial institution
  • Same institution permits us to work from home with provisos: high speed internet ... no kids at home (can't babysit and work from home) .... a filing cabinet that locks (for work documents) ... fill out HR forms ... perform at a certain level .... approved by certain levels .... et cetera
  • IF (big if ...) the company does not provide an office AND IF home office is required for work .... IRS allows deduction (link above has details)
  • IF (and this is our case) ... the office is for our own convenience .... cannot deduct

 

Sean Fericks's picture

Jay wrote:

Nice trick. This 'helpful' idea serves two purposes - punishes speech that the Secular Coalition for America would oppose -AND- attacks the viability of religious institutions in general. But the government will make money! Woo Hoo! :-/

A revocation of special privileges should not be considered an attack on religious speech.  It is merely the removal of an unjustly privileged position.  Why should my tax dollars subsidize Benny Hinn in his false-gospel, abusive, vile campaign to enrich himself?  Why should my tax dollars be used to subsidize the Fred Phelps of Westboro Baptist Church as he insults the cause of Christ by traveling across America harassing the families of our fallen soldiers? 

Greg Linscott's picture

In response to this comment:

.... homes often double over not only as a personal residence, but as a place where they host and entertain guests (often because of connections established through church ministry). Some have space in their houses for an office or study.

Same could be said for many business persons (except strike "church ministry" and replace it with "their business")

Understood... Though in many settings (especially rural), clergy members often serve a role not only in their congregations, but the larger community. I know of several pastors who double over as volunteer chaplains, de facto social workers (to use a contemporary category), and some who even occasionally open up their homes as the equivalent of a soup kitchen, homeless shelter, or similar functions. I know that in my own situation here, and in lieu of any kind of local dedicated government agency at this point, I have spent a great deal of time taking our Karen refugees to doctors appointments, getting their children enrolled in school, finding places to live, helping them get prepared for winter... I am happy to do it, as are many others who dedicate their lives to this kind of work. Those kinds of services, from a strictly civic perspective, do benefit a local community. Business owners who operate out of their homes have the ability to make deductions for business expenses, right? How is this any different, in principle?

Greg Linscott
Marshall, MN

Jim's picture

Who said:

"I have spent a great deal of time taking our Karen refugees to doctors appointments, getting their children enrolled in school, finding places to live, helping them get prepared for winter."

Greg you are a good man and I love you. But frankly many people volunteer like this. I commend  you for your volunteerism in your community but it is not a good defense for the housing allowance.

 

 

Jim's picture

Pastors take business deductions as well. I did when I was a Pastor. I:

  • Claimed travel expenses not reimbursed by my church (for most of the time (thankfully) I was reimbursed so there weren't many years that I took a deduction.
  • I depreciated my library and took that as an expense

 

Sean Fericks's picture

Jim wrote:

Who said:

"I have spent a great deal of time taking our Karen refugees to doctors appointments, getting their children enrolled in school, finding places to live, helping them get prepared for winter."

Greg you are a good man and I love you. But frankly many people volunteer like this. I commend  you for your volunteerism in your community but it is not a good defense for the housing allowance.

 

 

I am not clergy.  I am a small businessman.  Can I deduct my house when I provide counsel, go on a deacon call, use my business to provide free eyewear for an underprivileged person?  No. Why?  The housing deduction is a subsidy of religion, not charity.

Greg Linscott's picture

I understand many people do. There is a woman in town who does as much or more than me with our refugees, and does so on a purely volunteer basis at this point. At the same time, she is lobbying heavily to get a government funded agency established here in Marshall to address these needs. While many do volunteer, there are not as many who are able to do those things as someone like a clergy member can. Again, this isn't just me or even Fundamentalists. I know of clergy members in our town who are active in organizing and maintaining furniture resources for needy families. Another church (that would be considered theologically liberal) has a program that supplies meals to families. These churches aren't any better funded, typically, than ours, nor do their clergy seem to be particularly more secure financially. I understand those using these things for loopholes, and I do believe it is a problem. At the same time, as much as people might want to call these exemptions subsidies, the fact is that if religious organizations aren't doing these kind of things, there will likely be even more government agency responsibility, which will probably be more for the expense government and less efficiency for a community in the long run.

Greg Linscott
Marshall, MN

Sean Fericks's picture

So, because you do more charity work than me, you rate tax-free housing?  What if there are non-clergy that do more charity work than you?  Should they get a tax-free housing allowance?

Greg Linscott's picture

Sean, that's one way of looking at it, though I'm not looking to compare who does more work, and it isn't really the point. As much as people do admirable things with their time that aren't clergy members, there also are people who must serve as coordinators, initial contacts, and similar functions. A town that has those kind of resources is a different kind of community than one that doesn't. Another is this; clergy are funded by contributions from others. If these benefits are removed (and I recognize this is a distinct possibility within my lifetime), it isn't just the individual clergy who feels it. A congregation either has to increase their contributions to fund the increased expense, or may find that they are now unable to support a dedicated individual serving in that capacity. If a pastor doesn't have to pay as much tax on his house, typically that means it takes less for him to survive on than others. The benefit may be immediately recognized by the clergy member, but it is also essentially extended to every contributing member of a church or other religious organization.

Greg Linscott
Marshall, MN

Jim's picture

  • "Are churches making America poor?" Answer: We are broke because we live in an era of entitlements. Even I want my social security benefits (that I hope to receive in 2 years). We are broke! We have borrowed from future generations to enjoy their wealth. We will crash ... it's just a matter of time. Did churches cause this? NO!
  • On "up to $16.75 billion in additional annual revenue". Answered by Dr Evil (Mike Myers): 

http://www.youtube.com/watch?v=cKKHSAE1gIs

 

-----

By the way the quote "It's DR Evil to you .... I did not spend 6 years of studying to be called MR Evil" could nicely apply to ministry Doctors too!"

Mark_Smith's picture

If you let the genie out of this bottle it will lead to state and local governments seeking property tax payments...

 

all because you don't approve of Benny Hinn?

Jim's picture

Personal testimony ... how the housing allowance makes the Pastor different w regard to taxes:

I was a Pastor for 16 years. I enjoyed it ... I took it .. I benefited by it

I lived in this house; 7017 S Fairfax St, Centennial, CO 80122; 4 beds, 2.5 baths, 2,236 sqft. Zillow says it is worth over $ 300,000

With the housing allowance and 3 kids .... not only did I pay no taxes but I received $$$ back from the government. 

My next door neighbor (he has since moved as have I) was a deacon in my church. Imagine his income taxes (he worked for the telephone company)

Most congregants aren't even aware of this benefit. It made me feel uneasy.

 

 

Chip Van Emmerik's picture

The reason these exemptions were originally included in the tax code was because Americans long held the belief that religion was an important part of our social fabric. While I am diametrically opposed doctrinally to Catholicism and Mormonism (to name only two prominent religions in America), I am absolutely convinced that an America filled with citizens sincerely practicing their religious beliefs is a better place than an entirely secular nation such as we see today in many European countries. I am sure no one honestly believes that everyone praying and reading scripture in public schools in the 1950's was truly saved, but we frequently hear believers decry the downward trend in public schools since the removal of public prayer and Bible reading in the classroom. It had a social affect that was separate from the spiritual effect. Removing these exemptions only moves America further into the fully secular realm as a nation - something that I cannot fathom being good in any eternal or temporal sense.

Why is it that my voice always seems to be loudest when I am saying the dumbest things?

Jim's picture

501(c)(3) cuts both ways:

  • True believers benefit from it .... and loss of the same would "hurt" (I say temporarily) us
  • False religions benefit from it and would be hurt by the loss of it

Can we be honest with ourselves about "the government":

  • We (a collective "we") don't trust the courts
  • We think the public schools are the devil's schools
  • We decry that the national parks promote evolution
  • We see the secular college as bad for our chilren
  • Etc ...

But we (the church) are addicted to it:

  • the 501(c)(3)
  • The tax deductions for our contributions
  • The property tax exemption
  • The clergy housing allowance
  • The Pell grants for our kids to go to Bible college

Maybe we should just look ourselves in the mirror and admit we are hypocrites!

Meanwhile evangelical churches in other countries have none of these kind of benefits

Sean Fericks's picture

Mark_Smith wrote:

If you let the genie out of this bottle it will lead to state and local governments seeking property tax payments...

 

all because you don't approve of Benny Hinn?

Believe me, I am for reducing taxes (across the board).  But I believe that equal protection under the law is a very important principle.  Special tax treatment for certain industries (like religion, farmers, and oil companies) is repugnant to liberty.  It invites abuse (enter Benny Hinn), and always comes with unintended strings attached (BJU's tax woes of the 80's).  But worst of all, it makes true believers clients of federal government largess.  We become hypocrites in the world's eyes.  We fight tax exemption for Planned Parenthood while taking similar handouts.

I think Jesus' admonition to render unto Caesar has an indirect application here.  Caesar's tax system was corrupt.  Jesus just paid the thing and moved on.  He did not advocate for special treatment.  He wisely answered (and paid), and His ministry could not be impugned.

Greg Linscott's picture

He did not advocate for special treatment.  He wisely answered (and paid), and His ministry could not be impugned.

Sean,

Acknowledging the benefits of a system long established is not the same thing as advocating for special breaks not already existing... If Caesar is going to give someone a break, I doubt Jesus pays double on principle.

Greg Linscott
Marshall, MN

Sean Fericks's picture

"benefits"...I suppose that is the difference.  I see the system long established as a net liability.  The tax code is the vehicle of cronyism and special interest in America today.  501(c)(3) is used to force me to subsidize much more evil than good.  I doubt Christ would have defended it.

Funny though.  So many people are for eliminating the pork...until it is their ham.

Jay's picture

Sean Fericks wrote:
Jay wrote:
Nice trick. This 'helpful' idea serves two purposes - punishes speech that the Secular Coalition for America would oppose -AND- attacks the viability of religious institutions in general. But the government will make money! Woo Hoo! :-/

A revocation of special privileges should not be considered an attack on religious speech.  It is merely the removal of an unjustly privileged position.  Why should my tax dollars subsidize Benny Hinn in his false-gospel, abusive, vile campaign to enrich himself?  Why should my tax dollars be used to subsidize the Fred Phelps of Westboro Baptist Church as he insults the cause of Christ by traveling across America harassing the families of our fallen soldiers?

Sean, if the change were being implemented by the government, I could see your point.  That being said, here is their mission statement:

Our member organizations are established 501(c)(3) nonprofits who serve atheists, agnostics, humanists, freethinkers and other nontheistic Americans. Their purpose in founding the coalition was to formalize a cooperative structure for visible, unified activism to improve the civic situation of citizens with a naturalistic worldview. A number of additional organizations have endorsed our mission statement.

...The Secular Coalition for America is committed to promoting reason and science as the most reliable methods for understanding the universe and improving the human condition. Informed by experience and inspired by compassion, we encourage the pursuit of knowledge, meaning, and responsible ethical codes without reference to supernatural forces. We affirm the secular form of government as a necessary condition for the interdependent rights of religious freedom and religious dissent. We come together as national freethought organizations to cooperate in areas of mutual interest and to support each other in our efforts to uphold separation between government and religion for the benefit of all within the nontheistic community. As resources allow, we will actively cooperate in projects that support our position, with priority given to political action initiatives and public relations opportunities. 

Yes, they say that they support rights for religious freedom and religious dissent.  Color me skeptical.

That said, though - I agree with you in that what is good for the goose is good for the gander.  I think that most of our churches would not be able to continue without the 501(c)(3) exemption.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Jim's picture

Jay wrote:
I think that most of our churches would not be able to continue without the 501(c)(3) exemption.

Contrarian view (with initial observations):

  • I hope the 501(c)(3) provisions continue (for many reasons ... among which I enjoy the tax deduction for for charitable contributions!)
  • I hope the property tax exemptions for church properties continues
  • I hope (although as I indicated earlier in this thread I feel this is the least logical / defensible) the clergy housing allowance continues

If the US church needs this .... we are indeed the weakest of the world's churches! And if this is so, losing these government 'benefits' are the least of our problems!

 

Paul J. Scharf's picture

Jim,

With all due respect, I think a little historical context is needed to balance out your comments...

Until 1954, churches had NO 501(c)(3) restrictions and had total freedom to operate according to conscience.

To imply that churches are taking unfair advantage of the system now when they are living up to their end of these historically recent requirements is a little too much for me to concede...

If you want to go back further, until 1913 there was no deduction for charitable giving on income taxes. That is because there did not need to be. There was no permanent federal income tax until then, and free citizens had complete control over their own money.

If you want the IRS (even after the scandals of the past year) to exercise stricter requirements and greater control over churches, I'm really not sure how to answer that, except to say that you will probably get your wish some time soon.

But even before that, property tax exemptions for churches will be eliminated first (as people on the local level wrestle with the same question of why they are immediately subsidizing religion)—and churches will likely close by the thousands.

 

Church Ministries Representative for the Friends of Israel Gospel Ministry

Jim's picture

@Paul ... you misrepresent me:

You said: " ... To imply that churches are taking unfair advantage of the system"

My response: I did not imply this.

You said: "If you want the IRS (even after the scandals of the past year) to exercise stricter requirements and greater control over churches,"

My response: "I hope the 501(c)(3) provisions continue ... hope the property tax exemptions for church properties continues ... I hope ... the clergy housing allowance continues"

 

Paul J. Scharf's picture

I am not trying to misrepresent you... please forgive me to the extent I did.

I guess, however, I do not see the value in conceding anything to those who look at churches and see $$$ to help expand government spending that is already bloated beyond any wild fascist fantasy.

Put me down as 110% in favor of the ministry housing allowance for anyone who can qualify!

Church Ministries Representative for the Friends of Israel Gospel Ministry

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