Court strikes down clergy tax break

[Crabtownboy]

This is going to create lots of debate.

A federal judge said Nov. 23 that an IRS rule allowing clergy to avoid paying taxes on a part of their income designated as a housing allowance violates the constitutionally mandated separation of church and state.

Senior United States District Judge Barbara Crabb said a section of the tax code granting a benefit for “ministers of the gospel” not available to everyone else favors religion over non-religion, thus creating an establishment of religion prohibited by the First Amendment of the U.S. Constitution.

http://www.abpnews.com/culture/poli...es-down-clergy-housing-allowance#.Upo2YMRDuSp

 

[Revmitchell]

This does not affect anyone yet and it may never.

 

[thisnumbersdisconnected]

This is going to create lots of debate.

Not until all the appeals are exhausted. How did you miss this at the top of the article?

The ruling, which does not take effect until all appeals are final, would remove what GuideStone calls “the most important tax benefit available to ministers.” [Emphasis added]

 

[Reformed]

Actually I have no problem with this. I do not think the government should be subsidizing churches or ministers.

 

[Crabtownboy]

Not until all the appeals are exhausted. How did you miss this at the top of the article?

I didn't miss it. I figured just the idea would create discussion. If this is upheld it will affect pastor's who own their own homes. It will not affect pastors who live in parsonages as parsonages are church property. I realize there are not a lot of parsonages among Protestants . But it will not affect Catholic priests at all as where they live is church property.

A pastor friend who ate with us on Thanksgiving says the sources he has talked to believes it will be upheld and pastor's will, in effect, take a pay in cut as they will no longer have the housing credit.

 

[annsni]

This will most likely mean that I'd have to work at church more (meaning the church has to pay out more money) or that I get another job. I'm not thrilled about that option until my youngest is in school in 3 years.

 

[thisnumbersdisconnected]

A pastor friend who ate with us on Thanksgiving says the sources he has talked to believes it will be upheld and pastor's will, in effect, take a pay in cut as they will no longer have the housing credit.

I doubt that. Housing allowances in other professions are legal and have not been challenged. The courts can't separate out a pastor's housing allowance and call it unconstitutional simply because of the nature of his employment.

 

[Crabtownboy]

I doubt that. Housing allowances in other professions are legal and have not been challenged.

I checked Turbo Tax and found no information other than that for pastors. Can you enlighten me on others who can take housing allowances? Thanks.

The courts can't separate out a pastor's housing allowance and call it unconstitutional simply because of the nature of his employment.

I agree they could not separate one and not include the other.

 

[Ryan.Samples]

I checked Turbo Tax and found no information other than that for pastors. Can you enlighten me on others who can take housing allowances?

Aren't the military Basic Allowance for Subsistence and Basic Allowance for Housing non-taxable?

 

[Crabtownboy]

Aren't the military Basic Allowance for Subsistence and Basic Allowance for Housing non-taxable?

Wouldn't that be like parsonages?

 

[Salty]

I checked Turbo Tax and found no information other than that for pastors. Can you enlighten me on others who can take housing allowances? Thanks. ...

The Director of SUNY Upstate Medical Center recieves $5000 for a housing allowance.

BTW, that 5 grand is per month

 

[Crabtownboy]

The Director of SUNY Upstate Medical Center recieves $5000 for a housing allowance.

BTW, that 5 grand is per month

Is this in addition to his salary?
Does he own his own house?
Can he deduct the $5000 from his income tax by shifting money around?

Just asking, not arguing.

 

[annsni]

The Director of SUNY Upstate Medical Center recieves $5000 for a housing allowance.

BTW, that 5 grand is per month

I'm not sure how the costs are where you are but for us, just our property taxes are $1200 a month. That doesn't include mortgage (we don't have one but most people do), utilities, repairs, upkeep, grounds, etc. $5,000 might very well be the cost to keep his home.

 

[Don]

Your property taxes are $14,400 a year?!? I've never heard of property taxes that high!

 

[annsni]

Your property taxes are $14,400 a year?!? I've never heard of property taxes that high!

Yep. :tonofbricks:

 

[thisnumbersdisconnected]

Aren't the military Basic Allowance for Subsistence and Basic Allowance for Housing non-taxable?

The Director of SUNY Upstate Medical Center recieves $5000 for a housing allowance.

BTW, that 5 grand is per month

Thanks Ryan & Salty. I was in Columbia (not the one in South Carolina) watching

get into the SEC championship game. Didn't have time or the inclination for CTB's nonsense.

 

[JonC]

Wouldn't that be like parsonages?

The military provides housing and substance or they provide BAH/BAS. If BAH and BAS is received (living in off-post housing and not utilizing the DFAC), then it is an entitlement which is non-taxable and is not included in total income. (Base pay excludes substance and housing which is provided by the military)