Monday, February 13, 2012

Another Battle Won by Government in Its War on Religion – Parson Cannot Exclude from Income the $195,000 Per Year Vacation Home Provided by His Ministry

Exactly What Kind of Ministry Provides a Parson with a $195,000 a Year Vacation Home?

All of those people who believe that government is waging war on religions have further evidence from a decision by the 11th Circuit Court of Appeals.  That decision overruled a tax court decision that allowed a minister to exclude from income in 1999 not only the value provided to him of a primary residence of $87,000 a year (what everyone would call a million dollar  home) but also allowed the minister to exclude the value of a vacation home worth $195,000 a  year (what everyone would call a multi-million dollar home).

Here’s the deal.  In 1999 the ministry owned and controlled by the parson in the case gave the parson $195,000 to provide for the expenses, including mortgage payments, interest, taxes maintenance etc for the minister's vacation home just for that year.  For non-ministers, ie, the rest of us, such a payment would be income and we would pay income taxes on the $195,000.  But parson are treated differently by the tax code.

In the case of a minister of the gospel, gross income
does not include--
(1) the rental value of a home furnished to him as
part of his compensation; or
(2) the rental allowance paid to him as part of
his compensation, to the extent used by him to rent or
provide a home.

The IRS argued that the law restricts the exclusion to one home, the primary residence.  In that case the minister could only exclude the $87,000 per year paid in 1999  for him to support his primary home.  The tax court ruled against the IRS and said that the minister did not have to pay taxes on both the $87,000 payment and the $195,000 payment.

The case has now been decided by the Appeals Court, and it ruled that no, the law does not apply to a vacation home(s), it only applies to the primary residence.  Wow, talk about government hostility to religion.  Here the ministry paid the minister almost $200,000 a  year to support a vacation home and the courts rule that the minister has to pay tax on that money.  What an outrage!  Expect Mr. Romney and Mr. Santorum and Mr. Gingrich to cite this case as further evidence of the Obama war on religion (no the President has no influence on Court rulings, but why let that matter).

Of course a sane and rational society would probably not treat ministers different from other citizens in a beneficial manner, or if they did they would limit the benefit and not have it be an unlimited exclusion for a primary home.  And a ministry that was truly a ministry would not pay for multi-million dollar homes for its pastor, it might use that money for the public good, ie, its ministry. 

And religious leaders who get nice preferential treatment from government might refrain from criticizing that government as being anti-religious when that government tries to protect women’s health.  But that of course is what would happen in a sane and rational society, not the current state of the United States.

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