A federal district judge has already ruled that the cash housing allowance paid to ministers is unconstitutional (the HA that includes a parsonage is a separate section of the tax code and was not challenged). This is the case brough by the Freedom From Religion Foundation. The case is on appeal with the Seventh Circuit Court of Appeals and some law profs have weighed in on the matter, on the side of the FFRF.
Those who want to read the law prof’s lugubrious amicus can go find it. A little bird told me that not a single one of the tens of thousands of SBC clergy want to spend time with that, so I suggest that a good treatment of the prof’s material is by my CPA tax blogging friend, Peter Reilly: Law Professors Argue that Housing Tax Break for Ministers is Unconstitutional. Or, just stick with me for the Executive SBC Clergy Abstract and have more time for golf on your several days off each week.
What I have found in the collegial discussion with my fellow SBC clergy is that they (a) see their work as unique and their humble, owned domicile is an essential part of their job as a pastor, and (b) really like their tax break and will snarl and snap at anyone who tries to take it away.
With regard to the latter, I’m with my colleagues. It’s a nice tax break. I’d like to keep it and, in the best SBC tradition of alliterative sermonizing, I’ll snarl, snap, and scream to keep it.
In regard to our deserving the HA because of unique job and home situation, neither I nor the law profs are all that impressed with the argument. The prof’s write:
As a factual matter, claims that ministers are unique are significantly overstated. Not all ministers use their homes for work, are on call, need to live near work, or are subject to being moved by their superiors. Moreover, many lay employees work out of their homes, are on call, need to live near work, and are subject to being transferred. For instance, doctors, police and other emergency responders are subject to being called out and often must live near work. Corporate employees are often transferred from office to office, often to more expensive locations. Yet no one claims that these employees should get tax-free housing. Moreover, many ministers who receive the exemption do the exact same jobs as secular taxpayers and indeed for the same employers. Taxing ministers differently violates the core value of horizontal equity, under which similarly compensated taxpayers should be taxed the same.
One might remember that the HA has been liberally applied to “clergy” who are teachers, administrative non-church folks, and even assistant sports coaches. I use the scare quotes because I look askance at ordination for the purpose of getting a tax break from gummit. Clergy indeed.
The law profs didn’t miss the stink of the whole thing,
Third, Section 107(2) is not an appropriate accommodation for religion because it (1) disregards important differences in ministerial income that warrant different tax treatment
Thus, the enterprising megacelebrity pastor who buys the Biltmore House can if he has enough income exclude all the costs associated with that from income tax just like Preacher Bobby who gets (some weeks) 100 bucks from his church and lives in a singlewide trailer on a quarter-acre lot carved out of a soybean field in eastern Arkansas. Dr. Diamond Cufflinks avoids tens of thousands in taxes he can then spend on his Bombadier Global 7000. Brother Bobby avoids a couple of thou as the most. The pungency in this cannot be missed.
But, take heart brethren. They have their law profs. We have our law profs. I’m guessing that the housing allowance will survive, though as bad tax policy for the gummit, but is not an establishment of religion. Let’s just be humble about it and not snarl at those who dislike it.
Then again, some prominent SBC voices have advised that ministers should make preparations to do without the tax break.