Clergy Housing Allowance Ruled Unconstitutional in US District Court - What You Need to Know

how the allowance came about in the first place. As I understand it, when the income tax laws were being written, two major influences were at work, the mainline Protestants and the RCC. My maternal grandmother was the daughter of a Methodist Episcopal pastor in Iowa. Their practice was to move pastors around every five years. RCC priests took a vow of poverty and lived in a vicarage. Also, back in the day, the post WW2 30-year mortgage didn’t exist.

So, now we need to deal with matters as they are, not as they were.

[Rob Fall]

how the allowance came about in the first place. As I understand it, when the income tax laws were being written, two major influences were at work, the mainline Protestants and the RCC. My maternal grandmother was the daughter of a Methodist Episcopal pastor in Iowa. Their practice was to move pastors around every five years. RCC priests took a vow of poverty and lived in a vicarage. Also, back in the day, the post WW2 30-year mortgage didn’t exist.

So, now we need to deal with matters as they are, not as they were.

I left Methodism 30 years ago, but still periodically attend UMC churches with my grandmother and stepdad (sometimes they’re surprisingly evangelical—theological liberalism gives little to chew on). You rarely see a pastorate last longer than 5-10 years to this day, and absolutely, the question of pastoral tenure has a lot to do with whether a pastor ought to desire a parsonage or his own home. Interestingly, most of the pastors I knew back when lived in their own home—it was simply something they wanted. And as Larry notes, if I were to take a pastorate in, say, the Bay Area, I’d sure hope the church had a parsonage available, or else I’d be homeless.

Regarding the question of whether the pastorate ought to be a call to poverty, a passage that comes to mind is 1 Timothy 5:8, where Paul notes that those families which do not care for their own (widows in that case) are worse than unbelievers. OK, what then do we say about a church that allows its pastors to be on Medicaid or other welfare programs? In the same way, what do we say about Bible colleges which encourage their graduates to go for that deal? The book of Malachi says about the same thing, if I remember right.

So, bringing up the history of the housing allowance (HA) is interesting to me because it does shed a lot of light on the matter. The Freedom From Religion Foundation (FFRF) would have most people believe that only pastors/clergy get this tax privilege. That is simply not true.

The practice of not taxing clergy for their housing dates back to before the founding of America. By the time the IRS codified this exception in 1921, it did so based on a widely accepted principle known as the “convenience of the employer” doctrine. Simply put, the “convenience of the employer” doctrine stated that any class of worker who did not have a full and free choice of housing due to the requirements of their employer did not have to pay federal income tax on that housing. At the time, it is likely that the vast majority of pastors lived in church-provided housing (i.e. parsonages), and the law was based on that fact.

Other classes of workers were also covered by this doctrine. You may or may not know this, but the reason that servicemen and servicewomen today receive a tax-free housing allowance is based off of this same doctrine. In fact, there are a few different classes of secular employees covered by this principle.

In time, the HA was expanded to not only include employer-provided housing, but also cash provided by the employer to allow the employee to provide housing for themselves (as seen with both pastors and the military to this day).

So, there’s a little historical context for you. Living in a Navy town, I’ve already wondered if ruling the HA to be unconstitutional for ministers would endanger the military’s HA in the end. Contrary to what the FFRF would have us think, the government is not establishing religion by providing clergy with a HA exemption. It is trying to consistently apply the “convenience of the employer” doctrine to all approved classes of workers. If the courts rule against that doctrine, then … who knows what the long-term repercussions would be.

“I’ve already wondered if ruling the HA to be unconstitutional for ministers would endanger the military’s HA in the end. Contrary to what the FFRF would have us think, the government is not establishing religion by providing clergy with a HA exemption.”

Good thought. I’m both clergy (chaplain) on active duty in the military and receive BAH (Basic Allowance for Housing) for D.C. / NCR. In this high cost area, it’s a needed help for sure. I know back in ‘86 the 2nd Circuit Court of Appeals ruled in Katcoff v Marsh to keep denominationally approved / endorsed chaplains in the military, and that this did not violate the establishment clause. This is the legal precedent. And gets me BAH today.

But this author sees it going to SCOTUS

http://covenantcompanion.com/2017/10/13/housing-allowance-battle-likely…