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Ian McColgin
12-18-2013, 10:48 AM
"3. It is DECLARED that 26 U.S.C. § 107(2) violates the establishment clause of the
First Amendment to the United States Constitution."
- From Freedom From Religion Foundation and others v. Lew & Werfel (IRS)
http://ffrf.org/images/FFRF%20v%20Geithner%20-%20Parsonage%20Exemption.pdf


This is huge. It strikes down the ‘50s vintage law that gives major tax breaks to preachers. It may or may not herald a rethink of tax exempt status for religious organizations since while there’s more cash at stake there, the issues are quite different and would also affect non-religious organizations.

If one does not wish to read the whole decision, Addicting Info has a factually clear account, along with its liberal point of view, at:
http://www.addictinginfo.org/2013/11/23/tax-exemptions-preachers-court/

ccmanuals
12-18-2013, 10:53 AM
It's about time.

Now maybe we can move on to other special interest tax free organizations like the NFL.

Paul Pless
12-18-2013, 10:57 AM
This is huge. its a $400 million annual tax shelter. . .

that's huge?

fart

Osborne Russell
12-18-2013, 11:18 AM
Here I've been doing my taxes wrong all these years.


. . . plaintiffs narrowed their claim to § 107(2), which excludes from gross income a minister’s “rental allowance paid to him as part of his compensation.”

My wife and I are The Church of Heterosexual Marriage. I give her my money and she gives me an allowance as part of my compensation. That excludes every dollar from gross income.

Osborne Russell
12-18-2013, 11:19 AM
its a $400 million annual tax shelter. . .

that's huge?

fart

Freedom from religion, priceless.



. . . (in 2002, estimating that § 107 would relieve ministers of $2.3 billion in taxes over next five years). However, the significance of the benefit simply underscores theproblem with the law, which is that it violates the well-established principle under the First Amendment that “[a]bsent the most unusual circumstances, one's religion ought not affect one's legal rights or duties or benefits.” Board of Education of Kiryas Joel Village School Disrict v. Grumet, 512 U.S. 687, 715 (1994) (O’Connor, J., concurring in part and concurring in the judgment). Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility.

(emphasis added)

Paul Pless
12-18-2013, 11:20 AM
Here I've been doing my taxes wrong all these years.



My wife and I are The Church of Heterosexual Marriage. I give her my money and she gives me an allowance as part of my compensation. That excludes every dollar from gross income.

what exactly is it that you 'rent' from your wife? :D

Osborne Russell
12-18-2013, 11:37 AM
what exactly is it that you 'rent' from your wife? :D

I from her, her from me, it's all church doings. The money goes in regular but comes out tax exempt on account of religion.

Keith Wilson
12-18-2013, 11:50 AM
Well, I'm not surprised; I guess it was bound to happen eventually. My wife and I get to take advantage of that loophole, and it's saved me a pile of money over the years. It makes absolutely no sense, although there are plenty of other things in the tax code just as odd. Does anybody know when it's going to work its way down the the IRS? Is it being appealed?

Rich Jones
12-18-2013, 02:41 PM
I grew up in a rectory provided by whatever church my father was Rector of at the time. He never got a housing allowance and his salary was just above the poverty level. Things have changed in my church and I'll get back to you after I ask a few people.

Ian McColgin
12-18-2013, 06:27 PM
Many preachers are desperately underpaid and many churches get away with that by having a nice parsonage and providing tax free housing. There remain after this ruling ways to provide housing in exactly the same way that any other employer does, like a university providing housing for its president or a nation providing public housing for its president. This ruling gets at a more recent (only 60 years old) law that allowed very wealthy preachers to evade taxes.

CWSmith
12-18-2013, 06:56 PM
Now maybe we can move on to other special interest tax free organizations like the NFL.

Legal loopholes aside, is there one good reason why the NFL should not pay taxes?

Keith Wilson
12-18-2013, 07:00 PM
The vast majority of clergy aren't wealthy. The law in question allows any minister who isn't provided with a parsonage as part of the job to claim a portion of their salary as a "housing allowance", and not pay taxes on it - the idea being that since a parsonage wasn't taxed, the equivalent in cash shouldn't be either. It's a loophole that applies to clergy only, and a very good deal in some cases.