The headline in the Wall Street Journal this week quickly caught my attention: “Tax Relief for Clergy is Questioned.” In the article, Laura Sanders reported on recent court decisions regarding the clergy housing allowance.
Since 1921, tax laws have given clergy an exemption relating to living in a church-owned home or receiving a housing allowance from the church in lieu of a church-owned home. This exemption applies to rabbis, imams and Christian clergy. Based on the assumption that many clergy receive rather low salaries, this law states that if clergy who live in a church-owned home do not have to report the value of living in that house as taxable income; housing allowance in lieu of a parsonage/manse is treated the same way.
Like any other tax law, the application of it is somewhat complex. Clergy still must claim the value of the benefit, for instance, when calculating their annual Social Security contributions. But the benefit, with changes here and there, has remained constant now for 90 years, notwithstanding intermittent legal challenges.
The most recent headlines center on the case of the Rev. Phil Driscoll. If his name sounds familiar, it is because Driscoll once was a musician associated with Blood Sweat and Tears, Stephen Stills and Joe Cocker. This Grammy award-winning artist became a Christian in 1977 and has long been ordained.
Now it seems that he claimed his second home was eligible for the clergy tax break, too. The government said he owed federal income taxes on the $408,000 his ministry gave him to purchase lake home in Cleveland, Tenn. But Driscoll claimed, according to the Journal article, that the word “home” in the benefit could mean “homes” just as the word “child” could be interpreted as “children” elsewhere in the tax code. In other words, he should get a tax break on any homes the church bought for him. Incredibly, the Tax Court agreed 7-6 with this reasoning, a verdict now being appealed by the IRS to the federal appeals court in Atlanta.
I am unable to write about this issue objectively, having received this benefit for over three decades. I would like to think that it is in society’s best interest to support the practice of and spread of religion in this small way. It may clearly be in the interest of our tax code to support certain professions with tax help. Members of the military, for instance, also get a housing allowance break, although with different stipulations. I know of no clergy who has ever answered a call to ministry because he/she would get a housing tax benefit.
The Driscoll case seems to be clergy abuse of a well-intentioned benefit. Surely the law never anticipated a free pass for clergy on a $400,000 lake home. Driscoll and his church have given all clergy a bad name. It’s enough to make one root for the IRS to win their appeal.
Contact the Rev. Creede Hinshaw at Wesley Monumental United Methodist Church in Savannah at firstname.lastname@example.org.