Freethought & Rationalism Archive

Toto · 04-06-2002, 09:17 AM

This is a follow up to an issue raised on the thread <a href="http://iidb.org/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=59&t=000122" target="_blank">Is religious tax deductible?</a>

Today's Los Angeles Times contains an article on the challenge to the tax break for ministers.

This tax break is a magnet for people who want to use religion as a tax scam. But it is also a major subsidy for a lot of churches:

<a href="http://www.latimes.com/features/religion/la-000024608apr06.story?coll=la%2Dnews%2Dreligion" target="_blank">Pastoral Tax Break Faces Legal Test</a>

Quote:

The case has its roots in a routine IRS audit of one of the nation's wealthier religious figures: the Rev. Richard Warren, senior pastor of Saddleback Church, a mega-church in the Orange County community of Lake Forest. In 1996, auditors said Warren's housing allowance for the previous three years exceeded the IRS-calculated rental value of the Trabuco Canyon home he and his wife bought for $360,000. In 1995, Warren claimed $79,999 as a housing allowance--80% of his compensation from Saddleback. Auditors said the exclusion was $20,000 more than he was entitled to.

...

The 1st Amendment's establishment clause has been tested in a dizzying array of legal issues--from tax cases to the Americans With Disabilities Act to local zoning debates. The U.S. Supreme Court is now weighing how the establishment clause applies to a Cleveland program that uses public money to allow students to attend private religious schools.

To Erwin Chemerinsky, a USC law professor appointed by the 9th Circuit to write a brief on the Warren case, the issue is clear: Because the parsonage allowance is available only to ministers, it is an indirect subsidy of religion and therefore unconstitutional.

"Government can't subsidize religion," he said. "Religion is treated differently by the Constitution. If the government wants to subsidize journalists because it feels they aren't paid enough, I don't have any problem with that. But if they want to do the same thing with regards to religion, they can't."

John Eastman, Warren's attorney, said he will argue that the parsonage allowance is not a subsidy, but rather an "accommodation of religion" not unlike the tax-free status of church property,

"Exempting somebody from a tax simply allows them to keep more of their money," Eastman said. "It's the difference between a direct payment by the government and the government not taking money away from a church.

"That's what this fight is all about: How much of an accommodation of religion can we make before we violate the establishment clause?"

...

The International Church of the Foursquare Gospel oversees 1,834 affiliated churches nationwide from its Los Angeles headquarters. A majority of its 5,844 ministers receive a housing allowance, said the Rev. Ron Williams.

"Some of our churches survive on a thin financial margin and may be forced to close" if the tax benefit is deemed unconstitutional, Williams said. "Some of our ministers would have to leave the ministry and find other employment. The work that we do feeding the hungry, sheltering the homeless and evangelizing" would be curtailed. {emphasis added}

To Chemerinsky, such grim predictions are further evidence that the wall between church and state is being breached by the parsonage allowance.

"The more someone says that getting rid of this will affect them," he said, "the more proof there is that the government is subsidizing them."

JohnR · 04-06-2002, 03:41 PM

"Some of our churches survive on a thin financial margin and may be forced to close" if the tax benefit is deemed unconstitutional, Williams said. "Some of our ministers would have to leave the ministry and find other employment. The work that we do feeding the hungry, sheltering the homeless and evangelizing" would be curtailed."

Put this 2 bit minister in a condo and divy up the rest to these other Churches. Shouldn't they be spreading the plate proceeds over all the member churches? Is this guy another Benny Hinn?

Toto · 04-06-2002, 04:23 PM

Quote:

Originally posted by JohnR:
<strong>
Shouldn't they be spreading the plate proceeds over all the member churches? Is this guy another Benny Hinn?</strong>

A senior minister at a Southern California mega-church is the CEO of social service institution and a skilled communicator/salesman/fundraiser. He expects to be compensated for his efforts; without that compensation, he would find alternative employment that uses his skills.

From the point of view of his congregation, they have decided they need to pay him adequate compensation to retain him. Otherwise they might get stuck with some fire and brimstone type who told them things they didn't want to hear.

You think the church is some kind of Communist organization? You think that faith has something to do with it? A call from God? Ha ha ha. Get with the times!

Poverty, chastity, and obedience went out with the middle ages.

</sarcasm>

These churches are free to pay people whatever they want. They just shouldn't expect the taxpayer to help out.

Krieger · 04-06-2002, 06:55 PM

"In 1995, Warren claimed $79,999 as a housing allowance--80% of his compensation from Saddleback."

Disgusting...

Zimyatin · 04-06-2002, 09:03 PM

Well that settles it. I'm going to start my own church and claim my full salary as a housing or pedophila (just kidding) allowance.

ohwilleke · 04-29-2002, 02:53 PM

From American Atheists News, 4/16/02
CONGRESS RUSHING CLERGY TAX BREAK IN HOPES OF NEUTRALIZING U.S. COURT RULING
The House of Representatives yesterday passed legislation that would preserve a decades-old policy of giving tax breaks to members of the clergy toward the costs of their housing.
With little fanfare or advance publicity, the Clergy Allowance Clarification Act of 2002 passed during a roll call vote, 408-0. The measure was introduced on April 10, and the bill fast-tracked through the legislative hopper without public hearings or other input. Debate and discussion of the measure lasted yesterday from 2:58 PM to 3:19 PM.
Sponsored by Rep. Jim Ramstad (R-Minn.), the legislation is designed to shore-up a government policy which has been in place since 1921 giving ministers, priests and other clerics an exemption for the cost of housing and home ownership. Ramstad told reporters that loss of the special privilege could cost the clergy an estimated $2.3 billion
over the next five years.
"We cannot allow this important tax provision to fall," Ramstad declared.
But why the rush?
One reason is that the U.S. 9th Circuit Court of Appeals is
considering an examination of the exemption thanks to an obscure tax court case, WARREN v. COMMISSIONER OF INTERNAL REVENUE. That dispute originated when Rev. Richard D. Warren of the Saddleback Valley
Community Church in Orange County, California attempted to write off his $100,000 salary from church trustees as a "housing allowance."
The IRS challenged the deduction, arguing that only the fair market rental value of the parsonage was deductible. A tax court sided with the minister, and the IRS appealed.
When the case reached a panel of the 9th Circuit, though, Judge Stephen Reinhardt voiced questions over the constitutionality of the exemption. That precipitated an exchange described as "unusual and quarrelsome," as jurists debated whether the court should further
examine the tax break.
The issue, Reinhardt wrote is "to what tax deduction is Reverend Warren entitled? If .... under the constitution, Rev. Warren is not entitled to any tax deduction at all because such a deduction would violate the First Amendment, then it is not possible to decide the
case on non-constitutional grounds and reach the correct result."
The case is even more awkward since, as University of Southern California law professor Erwin Chemerinsky says, "The government would never raise the constitutionality of its own regulation."
"The ministers wouldn't want to disturb their tax deduction, either," he adds. "This is for churches, synagogues and mosques a really big deal." He added that the IRS policy amounts to "government subsidizing religion."
Chemerinsky has been called by the court to advise the judges on how to handle the issue. Neither the IRS, nor attorneys for Rev. Warren, want to see the regulation eliminated. Neither does an obscure group known as the National Association of Church Business Administration
which has entered the fray with an amicus ('friend of the court") brief.
On Capitol Hill, there is little effort to conceal the fact that the "Clergy Housing Allowance Clarification Act of 2002" benefits organized religion. Rep. Earl Pomeroy (D-ND) said that the exemption was crucial especially in rural areas and communities which find it difficult to attract clergy. "A clergy's home is not just his shelter, but a central meeting place for all members of the congregation," Pomeroy added.
As for the Ninth Circuit daring to examine the constitutionality of the clergy perk, Rep. Ramstad accused the court of "judicial activism at its worst."
The House bill deals with section 107 of the Internal Revenue Code, modified in 1968. Section 2 of the legislation lists several purposes, among them to "accommodate clergy in denominations that require as part of their ministry that they locate to specific communities..." and to "recognize that clergy frequently are required to use their homes for purposes that would otherwise qualify for favorable tax treatment, but which may require more intrusive inquiries by the government into the relationship between clergy and their respective churches." Another objective is to "minimize
controversies between the clergy and the Internal Revenue Service..."
"If this isn't a blatant example of government protecting 'special rights' for organized religion," said American Atheists President Ellen Johnson, "I don't what is."
H.R. 4156 now moves to the U.S. Senate for possible further action

Toto · 04-29-2002, 09:34 PM

I wonder what that piece of legislation can do to rescue an unconstituional law. It appears that Congress thinks that an Act

"To amend the Internal Revenue Code of 1986 to clarify that the parsonage allowance exclusion is limited to the fair rental value of the property."

would somehow take the issue away from the Ninth Circuit.

The actual name of the bill is the "Clergy Housing Clarification Act of 2002". The bill is <a href="http://thomas.loc.gov/cgi-bin/bdquery/z?d107:h.r.04156:" target="_blank">here</a>.

ohwilleke · 04-30-2002, 06:05 AM

Perhaps they want to moot the dispute that resulted in the lawsuit in the first place, in the hope that the lawsuit will go away and there will never again be a case to revivew the constitutionality of the law.

Toto · 04-30-2002, 09:00 AM

Quote:

Originally posted by ohwilleke:
<strong>Perhaps they want to moot the dispute that resulted in the lawsuit in the first place, in the hope that the lawsuit will go away and there will never again be a case to revivew the constitutionality of the law.</strong>

But the legality of Rev. Warren's tax deduction does not seem to be affected by this bill, and I don't see how Congress can make their interpretation retroactive. Of course, if Rev Warren agreed to settle the case, that might make it all moot. Perhaps this is part of a grand strategy.

Toto · 09-01-2002, 11:33 AM

Update on this issue:

From <a href="http://www.christianitytoday.com/ct/2002/133/33.0.html" target="_blank">Christianity Today's weblog</a>:

The Rev. Warren has settled his case with the IRS, so the appellate action has been dismissed. It was dismissed over the objections of constitutional scholar <a href="http://lawweb.usc.edu/faculty/echemeri.htm" target="_blank">Erwin Chemerinsky</a>, who attempted to intervene in the case as a private taxpayer to resolve the constitutional issues. However, the Ninth Circuit did hold that Chemerinsky could bring another case.

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04-06-2002, 03:41 PM	#2
JohnR Senior Member Join Date: May 2001 Location: Eastern PNW Posts: 572	"Some of our churches survive on a thin financial margin and may be forced to close" if the tax benefit is deemed unconstitutional, Williams said. "Some of our ministers would have to leave the ministry and find other employment. The work that we do feeding the hungry, sheltering the homeless and evangelizing" would be curtailed." Put this 2 bit minister in a condo and divy up the rest to these other Churches. Shouldn't they be spreading the plate proceeds over all the member churches? Is this guy another Benny Hinn?

04-06-2002, 06:55 PM	#4
Krieger Veteran Member Join Date: Dec 2001 Location: ... Posts: 2,191	"In 1995, Warren claimed $79,999 as a housing allowance--80% of his compensation from Saddleback." Disgusting...

04-06-2002, 09:03 PM	#5
Zimyatin Regular Member Join Date: Jun 2001 Location: Michigan Posts: 308	Well that settles it. I'm going to start my own church and claim my full salary as a housing or pedophila (just kidding) allowance.

04-29-2002, 02:53 PM	#6
ohwilleke Veteran Member Join Date: Jun 2000 Location: Denver, Colorado, USA Posts: 4,834	From American Atheists News, 4/16/02 CONGRESS RUSHING CLERGY TAX BREAK IN HOPES OF NEUTRALIZING U.S. COURT RULING The House of Representatives yesterday passed legislation that would preserve a decades-old policy of giving tax breaks to members of the clergy toward the costs of their housing. With little fanfare or advance publicity, the Clergy Allowance Clarification Act of 2002 passed during a roll call vote, 408-0. The measure was introduced on April 10, and the bill fast-tracked through the legislative hopper without public hearings or other input. Debate and discussion of the measure lasted yesterday from 2:58 PM to 3:19 PM. Sponsored by Rep. Jim Ramstad (R-Minn.), the legislation is designed to shore-up a government policy which has been in place since 1921 giving ministers, priests and other clerics an exemption for the cost of housing and home ownership. Ramstad told reporters that loss of the special privilege could cost the clergy an estimated $2.3 billion over the next five years. "We cannot allow this important tax provision to fall," Ramstad declared. But why the rush? One reason is that the U.S. 9th Circuit Court of Appeals is considering an examination of the exemption thanks to an obscure tax court case, WARREN v. COMMISSIONER OF INTERNAL REVENUE. That dispute originated when Rev. Richard D. Warren of the Saddleback Valley Community Church in Orange County, California attempted to write off his $100,000 salary from church trustees as a "housing allowance." The IRS challenged the deduction, arguing that only the fair market rental value of the parsonage was deductible. A tax court sided with the minister, and the IRS appealed. When the case reached a panel of the 9th Circuit, though, Judge Stephen Reinhardt voiced questions over the constitutionality of the exemption. That precipitated an exchange described as "unusual and quarrelsome," as jurists debated whether the court should further examine the tax break. The issue, Reinhardt wrote is "to what tax deduction is Reverend Warren entitled? If .... under the constitution, Rev. Warren is not entitled to any tax deduction at all because such a deduction would violate the First Amendment, then it is not possible to decide the case on non-constitutional grounds and reach the correct result." The case is even more awkward since, as University of Southern California law professor Erwin Chemerinsky says, "The government would never raise the constitutionality of its own regulation." "The ministers wouldn't want to disturb their tax deduction, either," he adds. "This is for churches, synagogues and mosques a really big deal." He added that the IRS policy amounts to "government subsidizing religion." Chemerinsky has been called by the court to advise the judges on how to handle the issue. Neither the IRS, nor attorneys for Rev. Warren, want to see the regulation eliminated. Neither does an obscure group known as the National Association of Church Business Administration which has entered the fray with an amicus ('friend of the court") brief. On Capitol Hill, there is little effort to conceal the fact that the "Clergy Housing Allowance Clarification Act of 2002" benefits organized religion. Rep. Earl Pomeroy (D-ND) said that the exemption was crucial especially in rural areas and communities which find it difficult to attract clergy. "A clergy's home is not just his shelter, but a central meeting place for all members of the congregation," Pomeroy added. As for the Ninth Circuit daring to examine the constitutionality of the clergy perk, Rep. Ramstad accused the court of "judicial activism at its worst." The House bill deals with section 107 of the Internal Revenue Code, modified in 1968. Section 2 of the legislation lists several purposes, among them to "accommodate clergy in denominations that require as part of their ministry that they locate to specific communities..." and to "recognize that clergy frequently are required to use their homes for purposes that would otherwise qualify for favorable tax treatment, but which may require more intrusive inquiries by the government into the relationship between clergy and their respective churches." Another objective is to "minimize controversies between the clergy and the Internal Revenue Service..." "If this isn't a blatant example of government protecting 'special rights' for organized religion," said American Atheists President Ellen Johnson, "I don't what is." H.R. 4156 now moves to the U.S. Senate for possible further action

04-29-2002, 09:34 PM	#7
Toto Contributor Join Date: Jun 2000 Location: Los Angeles area Posts: 40,549	I wonder what that piece of legislation can do to rescue an unconstituional law. It appears that Congress thinks that an Act "To amend the Internal Revenue Code of 1986 to clarify that the parsonage allowance exclusion is limited to the fair rental value of the property." would somehow take the issue away from the Ninth Circuit. The actual name of the bill is the "Clergy Housing Clarification Act of 2002". The bill is <a href="http://thomas.loc.gov/cgi-bin/bdquery/z?d107:h.r.04156:" target="_blank">here</a>.

04-30-2002, 06:05 AM	#8
ohwilleke Veteran Member Join Date: Jun 2000 Location: Denver, Colorado, USA Posts: 4,834	Perhaps they want to moot the dispute that resulted in the lawsuit in the first place, in the hope that the lawsuit will go away and there will never again be a case to revivew the constitutionality of the law.

09-01-2002, 11:33 AM	#10
Toto Contributor Join Date: Jun 2000 Location: Los Angeles area Posts: 40,549	Update on this issue: From <a href="http://www.christianitytoday.com/ct/2002/133/33.0.html" target="_blank">Christianity Today's weblog</a>: The Rev. Warren has settled his case with the IRS, so the appellate action has been dismissed. It was dismissed over the objections of constitutional scholar <a href="http://lawweb.usc.edu/faculty/echemeri.htm" target="_blank">Erwin Chemerinsky</a>, who attempted to intervene in the case as a private taxpayer to resolve the constitutional issues. However, the Ninth Circuit did hold that Chemerinsky could bring another case.

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