Wall Street Journal Exposes Egregious Tax-free Housing Privileges for Clergy

Secular Coalition for America Questions Expensive Subsidies for Clergy as Congress Considers Massive Cuts to Social, Other Programs

WASHINGTON, D.C. – As Congress looks for ways to cut billions of dollars from the federal budget, an Aug. 23 Wall Street Journal article shed light on a special tax privilege that makes it possible for any minister of the Gospel to “buy or live in multiple homes tax free.”

In one example The Journal cited, the U.S. Tax Court ruled that a millionaire minister did not owe federal income taxes on $408,638 provided to him by his ministry to buy a second home on a lake in Tennessee.

“At a time when the American people are facing grave fiscal challenges, it is simply outrageous to continue forcing taxpayers to pay for the housing of clergy members across the country,” said Sean Faircloth, executive director of the Secular Coalition for America, the national lobby for secular and nontheistic Americans. “Our Constitution protects citizens from having religion forced upon them, meaning no individual should have to subsidize anyone else’s religious organization through their tax dollars. As federal lawmakers consider ways to reduce our country’s deficit, these costly tax privileges for ministers should be among the first programs put on the chopping block.”  

Experts say that the parsonage allowance was originally devised to assist low-income clergy members. However, as The Journal notes, “[t]here is no restriction on the value of the home that can be claimed under the exemption.” As a result, there have been several high-profile cases of clergy paying no taxes on high-price real estate.

For example, in 2010 the Orange County Register reported that eight members of Robert Schuller’s Crystal Cathedral Ministries in California, including five members of Schuller’s family, received the special clergy housing allowance totaling more than $832,000 annually – all of it subsidized by taxpayers.

In 2006, The New York Times reported, “Current Congressional budget records show that the exemption has cost the government as much as $500 million in tax revenue a year, shifting that much of the national tax burden onto other taxpayers.”

U.S. Sen. Charles Grassley (R-Iowa) told The Journal, “It’s fair to question why a clergy member needs a tax-free allowance for more than one home, and whether tax-exempt churches should subsidize millionaire ministers.”

Earlier this year, a commission formed by the Evangelical Council for Financial Accountability at the request of Grassley to “spearhead an independent national effort to review and provide input on major accountability and policy issues affecting [religious] organizations” was criticized by the Secular Coalition and its member organizations for lacking representation from independent, secular, and non-evangelical Christian organizations.

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