From the Seattle Times:
A federal judge has struck down a law that gives clergy tax-free housing allowances, a decision that could have far-reaching financial ramifications for pastors across the United States.
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.
A bit overstated. It could eventually have far reaching effects, but right now it’s confined to part of Wisconsin. Anyway, this lawsuit was filed by our friends at the Freedom From Religion Foundation:
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.”
It’s interesting that this should come out right after all the hoopla over Pastor Steven Furtick’s $1.7 million mansion. Unfortunately, I suspect that this will just require some creative accounting on the part of the Crouch’s, Furtick’s and Driscoll’s.