TribLIVE

| USWorld


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Court strikes clergy's tax-free housing in suit affecting nation

Daily Photo Galleries

By The Associated Press
Saturday, Nov. 23, 2013, 7:24 p.m.
 

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.”

 

Subscribe today! Click here for our subscription offers.
 
 


Show commenting policy

Most-Read Nation

  1. New York farmers lament lost opportunity for natural gas riches with fracking ban
  2. Police: NYC cop killer invited people to watch shooting
  3. Georgia prosecutor Yates tapped for No. 2 post in Justice Department
  4. Coal mines near record low in worker deaths
  5. IBM’s Watson supercomputing system to be applied to PTSD
  6. New York City subways slowly upgrading from 1930s-era technology
  7. Nativity scene placed by Satanic display at Michigan Capitol
  8. Bill to save tax breaks on its way to Obama’s desk
  9. WikiLeaks releases purported CIA documents on operatives’ travel
  10. Obama says Sony hack not an act of war
  11. Gray wolf decision reversed