CREEDE HINSHAW: Federal judge disallows clergy housing allowance

A federal judge in Wisconsin has ruled (Oct. 6) that the clergy housing allowance, enacted by Congress in 1954, is unconstitutional. This allowance enables a clergyperson to receive housing allowance from his/her church without paying income tax on that part of the compensation. The law is extended to religious leaders in non-Christian religions, too.

Barbara Crabb, a U.S. District Court judge, ruled that this tax break gave clergy a tax advantage unavailable to other people. She wrote that although clergy were deserving, many other deserving citizens were ineligible simply because they were not clergy.

The lawsuit had been brought by the Freedom from Religion Foundation, a Madison, Wis., organization that protests against what they see as an unfair preference to religion in our nation. You’ll see their name cropping up in lawsuits across the country. The two leaders of the organization applied for the tax exemption, were denied it because they were not clergy, and filed their lawsuit.

This issue is not as simple as it first seems. I am under the impression that the government, when it deems it to be beneficial, can give tax-free housing allowances to selected groups. I think that those groups may include the military, foreign service personnel and Peace Corps volunteers. Whether clergy should also receive such a benefit is open to debate, but we are not the only group receiving such consideration.

The 1954 housing exemption was passed in response to a law already on the books – dating back to at least the 1920s – exempting clergy who lived in church-owned homes (as most clergy at that time did) from paying tax on living in a church-owned home. The 1954 law equaled things out by giving the same benefit to clergy who were buying their own home with church-designated funds.

Most clergy would probably be uncomfortable to have a conversation about this issue. More than a few black sheep have abused this tax break, buying multi-million-dollar homes while fleecing parishioners of millions of dollars of contributions. They have been publicly shamed and should have been stripped of ordination.

Servanthood is the hallmark of being a religious leader. But clergy have the right to take full advantage of the tax code the same as every taxpayer. There is no crime or dishonor to taking legally and ethically available tax breaks. I suspect most Americans are not upset that clergy receive this benefit.

Having lived in a church-owned home my entire ministry I never paid income tax on the benefit of living in a parsonage. Now in retirement and finally purchasing my first home (The mortgage will be paid off somewhere in my 90s!), I can take advantage of this tax provision available to me. I never lobbied for it, but am grateful for it. I am equally resolved, along with other clergy, that if the recent ruling is eventually upheld, we clergy will calculate our new and higher tax bill willingly, grateful to live and serve in this fine country.

Contact columnist Creede Hinshaw, a retired Methodist minister, at [email protected].