Court Victory: Pastors Can Keep Housing Allowance

ChurchLeaders | 3/21/2019 | Staff
Cayley1561Cayley1561 (Posted by) Level 3
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The housing allowance for church ministers, which represents an estimated tax savings of $700 million yearly, is safe—for now. Last Friday, the Seventh Circuit Court of Appeals ruled that the allowance doesn’t violate the First Amendment’s Establishment Clause. The unanimous ruling by a three-judge panel in Chicago overturned a district court ruling in Wisconsin.

The clergy allowance, in place since 1954, is for leaders of all religious faiths, according to Internal Revenue Service interpretation. Clergy are exempt from paying taxes on congregation-supplied housing or on the part of their salary designated for housing costs. Federal law also permits a housing allowance for employees such as military members and overseas workers.

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In Friday’s ruling, Judge Michael Brennan wrote that the so-called parsonage allowance doesn’t “advance religion on behalf of the government” but allows “churches to advance religion, which is their very purpose.” He added that the tax exemption doesn’t “connote sponsorship, financial support, and active involvement of the [government] in religious activity.”

Housing Allowance Ruling Lauded As Victory for Religious Freedom

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Groups that champion religious liberty praised Friday’s ruling. “The power to tax is the power to destroy, and so refusing to tax a minister’s housing expenses is simply the best way to ensure the free exercise of religion and prevent the excessive entanglement of government with religion,” said Erik Stanley with Alliance Defending Freedom.

Russell Moore, president of the Ethics & Religious Liberty Commission of the Southern Baptist Convention, said, “I’m thankful to see sanity prevail in this...
(Excerpt) Read more at: ChurchLeaders
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