Atheist Organization Calls for Near $1 Billion in Taxes from Churches

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An atheist group is suing the Internal Revenue Service in hopes of overturning a law that allows churches to pay clergy an income-tax-free housing allowance; however, religious liberty advocates argue the IRS code makes similar provisions for faith and non-faith based organizations alike.

The Freedom From Religion Foundation successfully sued the IRS last fall in federal district court in Wisconsin, winning a ruling in favor of ending the “parsonage exemption.” The court cited the First Amendment’s Establishment Clause, which prevents the government from establishing a state-supported church.

The result of overturning the tax provision, which has been in place since 1954, would be a combined total of over $1 billion in new taxes on members of the clergy, according to brief filed last week by The Becket Fund for Religious Liberty, which is representing the churches.

The case is currently before the 7th U.S. Circuit Court of Appeals in Chicago.

Christianity Today reported that 81 percent of full-time senior pastors receive the housing allowance, saving them a combined total of $800 million in income taxes, based on congressional estimates.

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Though the housing allowance is not included for calculating income taxes, it is included in determining faith leaders’ total compensation for payroll taxes purposes. These taxes fund Social Security and Medicare.

Chicago pastor Chris Butler told the appeals court last Thursday that taking away the income tax break would be a big blow to both religious leaders and the communities they serve, CBN News reported.

“For the majority of churches, the pastors are like me and experience at some level the same problems that we’re trying to face in the community,” said Butler. “If you take away even a little bit, it can become a lot of trouble quickly.”

Do you think faith leaders should be able to receive the tax free housing allowance?

Becket noted, “For much of the past century, pastors, rabbis, imams and other faith leaders – whose job requires them to live close to their church or in an underserved community – have been eligible for a tax-exempt housing allowance under the same tax principle that allows businesses and the military to reimburse travel and overseas housing costs and provides tax-free housing to teachers and police who live in the communities they serve.”

In its brief, the group argued for over 100 years Congress has applied the “convenience of the employer doctrine” to religious and non-religious groups alike designating certain types of compensation that are not subject to federal income tax.

Becket stated that the value to hundreds of thousands of nonreligious employees is over $10 billion every year.

“Treating ministers like other professionals isn’t an establishment of religion; it’s fair tax treatment,” Luke Goodrich — deputy general counsel at Becket — told CBN.

“The same group of atheists claimed it was unconstitutional to put Mother Teresa on a postage stamp, so it’s no surprise they’re trying to sic the IRS on churches,” he added.

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According to Christianity Today, oral arguments in the case could take place as early as this summer.

If the 7th Circuit rules against the churches, it will likely mean a U.S. Supreme Court review, since the IRS must have a uniform tax code across the country.

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Randy DeSoto has written more than 1,000 articles for The Western Journal since he joined the company in 2015. He is a graduate of West Point and Regent University School of Law. He is the author of the book "We Hold These Truths" and screenwriter of the political documentary "I Want Your Money."
Randy DeSoto is the senior staff writer for The Western Journal. He wrote and was the assistant producer of the documentary film "I Want Your Money" about the perils of Big Government, comparing the presidencies of Ronald Reagan and Barack Obama. Randy is the author of the book "We Hold These Truths," which addresses how leaders have appealed to beliefs found in the Declaration of Independence at defining moments in our nation's history. He has been published in several political sites and newspapers.

Randy graduated from the United States Military Academy at West Point with a BS in political science and Regent University School of Law with a juris doctorate.
Birthplace
Harrisburg, Pennsylvania
Nationality
American
Honors/Awards
Graduated dean's list from West Point
Education
United States Military Academy at West Point, Regent University School of Law
Books Written
We Hold These Truths
Professional Memberships
Virginia and Pennsylvania state bars
Location
Phoenix, Arizona
Languages Spoken
English
Topics of Expertise
Politics, Entertainment, Faith




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