Madison atheists sue to end IRS break to ministers

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Mike Durning's picture

I hate to say it, but they are probably right.

Dave Doran's picture

Mike,

I'd be interested in the reasons for your observation.

DMD

DMD

Mike Durning's picture

Dave,

I've been thinking about it. On second thought, I think they are mistaken. I had to read up a bit on the Housing Allowance to make sure.

I suppose the old "Congress shall make no law respecting an establishment of religion" confusion is going on here. They are thinking congress can't do anything in any regard to religion. But the intent was clearly that Congress not do anything to the benefit of any particular religion. So long as the Housing Allowance is evenly applied to all faiths, they have no legitimate complaint.

If they complain too loudly, maybe they can be permitted to ordain Atheist ministers.

Mike

Jim's picture

Whatever view one has on this, the tax code is hopelessly complex and needs major reformation (simplifying)

http://www.freedomworks.org/scrapthecode/topten.php

Quote:
The code is so big that politicians can't even agree on how long it is. Title 26, the Internal Revenue Service (IRS) code totals to about 3,400,000 million words. The non-partisan Tax Foundation reports that the entire tax code with regulations in 2005 was over 9,097,000 words. To put that in perspective, the Bible has 774,746 words. The code has grown in length between 1995 and 2005 by 18.9 percent. The directions for filing a typical form 1040 totals 161 pages

The US no longer (and this must be obvious!) raises sufficient funds to meet expenses.

http://www.foxnews.com/politics/2011/04/17/nearly-half-households-pay-in...

Quote:
nearly half of U.S. households pay no income taxes at all.

Rob Fall's picture

It's also a vestige of how clergy was supported when the Income Tax was first implemented. Remember, the clergy of the mainline denominations lived in church owned parsonages, manses, rectories, ect. The housing allowance is just a monetary version of the same. Otherwise, employer supplied housing can be considered taxable income under certain circumstances.

Mike Durning wrote:
Dave,

I've been thinking about it. On second thought, I think they are mistaken. I had to read up a bit on the Housing Allowance to make sure.

I suppose the old "Congress shall make no law respecting an establishment of religion" confusion is going on here. They are thinking congress can't do anything in any regard to religion. But the intent was clearly that Congress not do anything to the benefit of any particular religion. So long as the Housing Allowance is evenly applied to all faiths, they have no legitimate complaint.

If they complain too loudly, maybe they can be permitted to ordain Atheist ministers.

Mike

Hoping to shed more light than heat..

Jim's picture

Note that I put "abuses" in quotes

Highly publicized cases:

http://www.christianitytoday.com/ct/2002/november18/1.42.html (Rick Warren)

Quote:
Ironically, Warren got his greatest publicity last spring as "the guy who almost messed up pastors' housing allowances." That's the way one minister put it, though it's not really fair. Warren says he took on a complicated court case to stand up for pastors against arbitrary irs decisions. It was not his fault that a judge used the case to challenge pastors' special exemptions. (Congress has since passed and President Bush signed a bill reaffirming the clergy's generous housing exemptions.) In the resulting news stories, Warren's deduction of $79,999 for his 1995 housing expenses was widely publicized.

Phil Driscoll

http://www.forbes.com/sites/peterjreilly/2011/08/23/wall-street-journal-...

Others:

http://pastorpersonalfinance.com/109/clergy-housing-allowance-changes/

Quote:
Sadly, the housing allowance exemption has been abused by a few high-profile televangelists, and other highly-compensated pastors, who live in lavish homes and have very large housing allowances, bringing it under scrutiny for all pastors.

Finally: The history of the housing allowance

Quote:
The housing allowance exemption, enacted by the Revenue Act of 1921, allows American pastors to exclude the fair rental value of their home from their gross income for tax purposes.

Barry L.'s picture

I do think that it is a little abusive when you essentially get a double deduction of mortgage interest on Sch A and you get to exclude the whole mortgage payment as part of your residence exemption.

Jim's picture

For 2 of my pastorates I owned my own home.

I literally paid no taxes. I had opted out of SS (another story) and so paid nothing into that. I had the mortgage deduction plus the housing allowance. My adjusted gross looked like I was "poor" and I even got $$ back from the http://en.wikipedia.org/wiki/Earned_Income_Tax_Credit ]EIC (I think that was the name of the program)

I'm not knocking it ... I played by the rules and used a tax accountant.

Somehow it just did not seem right to me.