Court strikes clergy's tax-free housing in suit affecting nation
MADISON, Wis. — A federal judge has struck down a law that gives clergy tax-free housing allowances in a decision that could have far-reaching financial ramifications for pastors across the nation.
In her decision Friday, U.S. District Judge Barbara Crabb in Wisconsin wrote that the exemption “provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise,” the Wisconsin State Journal reported.
The Madison-based Freedom From Religion Foundation filed the lawsuit against Treasury Secretary Jacob Lew and acting Internal Revenue Service Commissioner Daniel Werfel. Treasury spokeswoman Victoria Esser and IRS spokesman Grant Williams referred questions on Saturday to the Department of Justice, which is representing Lew and Werfel.
Under the law, passed by Congress in 1954, ministers don't pay income taxes on compensation that is designated part of a housing allowance.
The Freedom From Religion Foundation says that allows a clergy member to use the untaxed income to purchase a home, and then, in a practice known as “double dipping,” deduct interest paid on the mortgage and property taxes.
“It's a really big deal,” said Annie Laurie Gaylor, co-president of the foundation. “A church currently could pay a minister $50,000 but designate $20,000 of it a housing allowance so that only $30,000 would be taxed as salary.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Police search for armed prisoner after Va. hospital escape
- Indiana officials try to quell backlash over religious freedom law
- Global warming is slowing down the circulation of the oceans — with potentially dire consequences
- A revolt is growing as more people refuse to pay back student loans
- Music festivals say ‘no’ to fans’ selfie sticks
- FBI agent, 2 others sentenced in contractor kickback scheme in Utah
- Supreme Court allows Obamacare’s Medicare costs board to stand
- 2nd suicide in a month jolts Missouri GOP
- Florida church bus crash kills 8
- Doctors push end-of-life care talks
- Federal agents charged with plundering online drug bazaar Silk Road