A federal judge has once again ruled that the parsonage allowance — a tax break that allows pastors to pay all their housing costs with tax-free dollars–is unconstitutional, reports Christianity Today.
The purpose of the housing allowance, ruled U.S. District Judge Barbara Crabb,” is to provide financial assistance to one group of religious employees without any consideration to the secular employees who are similarly situated to ministers. Under current law, that type of provision violates the establishment clause.”
Ministers get about $800 million in tax relief each year because of the housing allowance, according to Christianity Today. So it’s a big deal.
Crabb issued a similar ruling in 2013, after the Freedom From Religion Foundation (FFRF) sued the IRS, saying that it was unfair that pastor could get a housing allowance, but the leaders of a secular nonprofit–in this case one run by atheists– ould not.
The Department of Justice responded by saying in essence, “OK–atheists can get a housing allowance.” An appeals court later overruled Crabb, saying that FFRF leaders hadn’t ever asked for a housing allowance.
So the FFRF’s leaders called the government’s bluff. They asked for a housing allowance by filing amended tax returns. The IRS gave them some money but then later, turned down their request. Atheists can’t get a housing allowance, the IRS said, according to the FFRF.
“IRC Section 107 specifically requires that to exclude a housing allowance from income you must be a minister of the gospel,” states a letter quoted in Crabb’s new decision. “The IRS does not have the authority to interpret this to include anyone other than those who meet this definition.”
This is the third time the housing allowance has been in legal trouble. The first came way back in 2002, when Rick Warren feuded with the IRS.