Federal court reaffirms tax exempt clergy housing allowances

Catholic News Agency | 3/19/2019 | Staff
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Chicago, Ill., Mar 19, 2019 / 05:02 pm (CNA).- The 7th Circuit Court of Appeals has upheld tax-free housing allowances for clergy, a decision welcomed by pastors, religious organizations, and others who say the allowances make their ministries affordable and strengthen limits on the ability of government policy to interfere with clergy.

The law’s effect is “neither to endorse nor to inhibit religion, and it does not cause excessive government entanglement,” the March 15 decision said, adding that Congress has provided federal tax exemptions for religious organizations since 1802.

Law - Court - Procedure - Act - Minister

The federal law challenged in court is the Administrative Procedure Act of 1954. It provides that a “minister of the gospel” does not pay income taxes on compensation designated as a housing allowance. Religious leaders save about $800 million in taxes a year due to the benefit, the Associated Press said.

Among those who benefit are Pastor Chris Butler of Chicago Embassy Church, on the south side of Chicago, Ill.

Ruling - Victory - Church - Side - Chicago

“This ruling is a victory not just for my church but for the needy south side Chicago community we serve — our youth, our single mothers, our homeless, our addicted, and our victims of gang violence,” Butler said in a statement. “I am grateful that I can continue serving them and living side by side with them to make our neighborhood a safer, more peaceful place.”

The religious freedom legal group Becket had intervened on behalf of Butler’s and several other congregations. His church cannot afford a full salary for him, so the housing allowance makes it possible to live near his church.

Freedom - Religion - Foundation - Law - Decade

The Wisconsin-based Freedom from Religion Foundation has been challenging the law for a decade, the Associated Press reports. It argued that the law discriminates against secular employees. It argued that clergy can used untaxed income to buy a home and deduct interest paid on...
(Excerpt) Read more at: Catholic News Agency
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