Thursday, October 25, 2018

Clergy Housing Tax Break Lands in Seventh Circuit

From Chicago-

Churches and the IRS joined forces Wednesday before a sympathetic Seventh Circuit panel to argue that a 65-year-old income tax housing exemption for clergy members does not violate the Constitution’s Equal Protection Clause.

“The court has to take history into account,” said attorney Luke Goodrich of the nonprofit law firm Becket, a public-interest firm representing the churches and pastors. “Tax exemptions for parsonages predate the founding [of the U.S.].”

The U.S. tax code grants “ministers of the Gospel” an exemption on income tax for the portion of their wages spent on housing.

26 U.S.C. § 107(2) allows for a payment separate from a pastor’s salary that is used for paying mortgages, utility bills and other housing-related expenses to be excluded from gross income on tax returns.

The IRS has interpreted the 1954 law to apply to religious leaders of all faiths, not just Christian ministers.

More here-

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