Clergy No Longer Allowed to Have Tax Exemption on Multiple Homes
|Friday, Feb. 17, 2012 | ProCon.org | MORE HEADLINES|
The benefit known as the "parsonage exemption" permits ministers of religion to deduct most of the money they spend on housing from their federal income tax. Their properties are often also exempt from state property taxes. The Eleventh Circuit Court of Appeals in Atlanta ruled in Commissioner of IRS v. Driscoll that "Congress intended for the parsonage allowance exclusion to apply to only one home.”
The "parsonage exemption” first appeared in 1921, and withdrawing it would cost American clergy members $2.3 billion over five years according to University of California at Irvine Law Professor Erwin Chemerinsky. Churches have been unofficially tax-exempt since the country’s founding, and officially since the exemption was codified into law in 1894.
Some supporters of the "parsonage exemption" contend that the tax benefit is necessary because only 5% of pastors earn more than $50,000 a year. D. August Boto, Executive Vice President and General Counsel of the Executive Committee of the Southern Baptist Convention said "the housing allowance is critically important for making ends meet - it is not a luxury."
Some critics of the exemption point out that the average annual salary for senior pastors with congregations of 2,000 or more is $147,000, with some earning up to $400,000. Church leaders Creflo and Taffi Dollar of World Changers Church International had three tax-free parsonages: a million-dollar mansion in Atlanta, GA, a two-million-dollar mansion in Fayetteville, GA, and a $2.5 million Manhattan apartment. Kenneth and Gloria Copeland, leaders of Kenneth Copeland Ministries in Fort Worth, TX, live in a church-owned, tax-free $6.2 million lakefront parsonage.
Driscolls’ lawyer Brooke Asiatico said they will petition for a rehearing before all the judges on the Eleventh Circuit. "Because this is a case of exceptional importance applicable to all clergy in the United States, the Faith & Freedom Fund, a non-profit legal fund, will continue to provide legal support for this issue moving forward,” she said in a press release.
Laura Sanders, "Appeals Court Rejects Clergy Tax Benefit," wsj.com, Feb. 10, 2012
Robert W. Wood, "A Non-Whitney Grammy Tale of Clergy Tax Greed," forbes.com, Feb. 15, 2012