Not taxing pastors’ housing allowances is fair because workers in many other occupations receive that benefit, argued lawyers for the non-profit legal group Becket before the 7th U.S. Circuit Court of Appeals in a case brought by an atheist organization.
“The tax code treats ministers the same as hundreds of thousands of nonreligious workers who receive tax-exempt housing for their jobs – that’s not special treatment, it’s equal treatment,” said Luke Goodrich, vice president at Becket.
“Ending the parsonage allowance would devastate small, low-income houses of worship in our neediest neighborhoods and would cause needless conflict between church and state.”
The case, seeking some $1 billion in tax money from churches across the U.S., was brought by the Freedom From Religion Foundation organization against the IRS several years ago.
A federal judge agreed with the foundation.
Becket is representing Chris Butler, pastor of a South Side Chicago church, who benefits from the 64-year-old tax-exempt housing allowance for religious leaders.
Butler “is the leader of a predominantly African-American congregation, and devotes his life to mentoring at-risk youth, decreasing neighborhood crime, and caring for the homeless in Chicago’s poorest neighborhoods,” Becket said.
“The church can’t afford to pay Pastor Chris a salary, but it offers him a small housing allowance so he can afford to live near his church and the community he serves.”
Becket said ending the housing allowance for faith leaders like Butler “would harm poor communities by diverting scarce resources away from essential ministries and even forcing some small churches to close.”
“This is the same tax principle that allows hundreds of thousands of secular workers including teachers, business leaders, and military service to receive tax-free housing for their jobs,” Becket said.
“It also keeps the IRS from becoming entangled in religious matters. If the parsonage allowance ends, it would impose nearly $1 billion per year in new taxes on churches, making it impossible, particularly for leaders of small and minority faiths, to live in the communities they serve.”
“Butler said in a statement released by Becket that he’s asking the court “to protect our ability to serve our South Side Chicago community – our youth, our single mothers, our homeless, our addicted, our lost, and all those who seek a church family..”
“I hope the court will keep letting religious leaders like me not only preach from the pulpit, but live among the people we serve.”
when the case was appealed.
Judge Barbara Crabb, who has a reputation for hostility to faith, previously said such a benefit is allowable for secular employees, but it should not be available for Christian pastors.
Becket argued the exemption is available to a “dizzying array” of other workers, including hotel managers, nurses, fishermen, construction workers, apartment caretakers, museum directors, oil executives, non-profit presidents, teachers, school superintendents, diplomats, peace corps volunteers, state governors, prison wardens and soldiers.