US Federal Judge and atheist group tag-team attack churches, congregations

Sometimes I muse about what it must have been like for a pagan priest in 4th century Rome who tended a crossroads shrine as he watched the demolition of his entire world.

It is, perhaps, our turn now.

The not-so-Catholic-friendly, Liberal Religion News Service has a story which reveals another symptom of the Left’s relentless attack on religion in the public square.

Federal judge: Clergy tax-free housing allowance is unconstitutional

(RNS) A federal judge has ruled that an Internal Revenue Service exemption that gives clergy tax-free housing allowances is unconstitutional. [One wonders about the twisted logic of this.  Maybe it will be explained.]

The exemption applies to an estimated 44,000 ministers, priests, rabbis, imams and others. If the ruling stands, some clergy members could experience an estimated 5 to 10 percent cut in take-home pay. [Because they get so much already.]

U.S. District Court Judge Barbara Crabb[7th District Court – appointed by Carter, from ultra-liberal Madison] ruled on Friday (Nov. 22) in favor of the Freedom From Religion Foundation, [HQ in ultra-liberal Madison.  We have seen them before.] saying the exemption violates the First Amendment because it “provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.” [It isn’t? Given their salaries, you could argue that it is.  How else are some protestant groups able to court a pastor? How will many parishes bear the extra expenses of higher salaries?]

The case, decided in the District Court for the Western District Of Wisconsin, will likely be appealed to the the Chicago-based 7th U.S. Circuit Court of Appeals, which covers the states of Wisconsin, Illinois and Indiana.

The housing allowances of pastors in Wisconsin remain unaffected after Crabb stayed the ruling until all appeals are exhausted. Crabb also ruled in 2010 that the National Day of Prayer was unconstitutional. [Are you sensing a pattern?  It sounds as if the Freedom from Religion people have a tame judge.]

Earlier this month, the 7th Circuit barred the enforcement of the Obama administration’s contraceptive mandate,  [Which judge made the ruling?  I suspect it wasn’t her. No, wait… split court, and Crabb isn’t mentioned.  HERE] an issue circulating through federal courts across the country and likely to be taken up by the U.S. Supreme Court next spring.

Churches routinely designate a portion of a pastor’s salary as a housing allowance. So, for example, a minister that earns an average of $50,000 may receive another a third of income, or $16,000, as a tax-free housing allowance, essentially earning $66,000. Having to pay taxes on the additional $16,000 ($4,000 in this case), would mean an 8 percent cut in salary.

The exemption is worth about $700 million per year, according to the Joint Committee on Taxation Estimate of Federal Tax Expenditure. [Hmmm… judicial activism for the sake of the governments desire to raise taxes?]

Crabb ruled that the law provides that the gross income of a “minister of the gospel” does not include “the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.”

Tobin Grant, a political science professor at Southern Illinois University, said the exemption dates from an era when churches paid clergy who lived in church-owned parsonage. [So, priests who live in a house away from their parish…]

“Over time, fewer churches owned parsonages and instead gave clergy housing allowances, which were also treated as tax-free. The difference, however, was that these were regular salaries that now had an exclusion. Part could be tax-free, part couldn’t. So, why not give a pastor a huge housing allowance, which is tax free?” [Do they actually get “huge” allowances?]

The ruling addresses the housing allowance, while parsonages are still tax-exempt properties, like the churches that own them.

Peter J. Reilly, a contributor to Forbes, writes that the exclusion goes back to 1921.

“I’m not sure what Congress could do in this instance,” he said. “There is strong clergy influence on both sides of the aisle though, so there is a good chance that Congress will at least try to make it look like it has done something.” [Will “try to make it look like it has done something”.  Yep.  ‘Bout right.]

The law’s tax exemption has been contested since a decade-old dispute between the IRS and California megachurch pastor Rick Warren. In 2002, the IRS attempted to charge Warren back taxes after he claimed a housing allowance of more than $70,000.

He eventually won the federal court case, and that led Congress to clarify the rules for housing allowances. The allowance is limited to one house, and is restricted to either the fair market rental value of the house or the money actually spent on housing.

Uh-huh. Yes. This makes sense.

Annie Laurie Gaylor and Dan Barker, co-presidents of the Freedom From Religion Foundation, [based in ultra-liberal Madison, where the federal judge is from] which brought the suit, hailed the decision. “May we say hallelujah! This decision agrees with us that Congress may not reward ministers for fighting a ‘godless and anti-religious’ movement by letting them pay less income tax,” they said. “The rest of us should not pay more because clergy pay less.” [HUH? Pay more? Why would… ah yes… liberals believe in the zero sum model of the pie, don’t they.]The Southern Baptist Convention’s Ethics and Religious Liberty Commission and Southern Baptist-affiliated GuideStone Financial Resources plan to fight for the exemption.

“The clergy housing allowance isn’t a government establishment of religion, but just the reverse,” said Russell Moore, president of ERLC. “The allowance is neutral to all religions. Without it, clergy in small congregations of all sorts would be penalized and harmed.[Which is what that foundation, and probably the federal judge, want.]

Church housing has been a hot topic in recent months as the Southern Baptist pastor of one of the nation’s fastest-growing churches is building a 16,000-square-foot gated estate near Charlotte, N.C. The tax value on the 19-acre property owned by Steven Furtick of Elevation Church is estimated to be $1.6 million.

Earlier this year, the federal government offered the Freedom From Religion Foundation a tax break available to religious groups that it rejected. [If they really believe in what they are doing, they should voluntarily pay twice the amount of taxes owed.]

Separately, in a federal court case in Kentucky, atheists are challenging IRS regulations that exempt religious groups from the same financial disclosure requirements of other non-profit groups.

We will have choices to make in the future, dear readers, hard choices.

More from the atheist group HERE.

About Fr. John Zuhlsdorf

Fr. Z is the guy who runs this blog. o{]:¬)
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  1. Lisa Graas says:

    No need to take “In God We Trust” off the money if you can convince enough people that the money belongs not to God but to “the people” collectively.

    The government may still be printing “In God We Trust” on the money, but unless people know what that actually means, it’s for nought.

  2. Legisperitus says:

    “May we say hallelujah”? Well, no, not if you know what the word means.

  3. jacobi says:

    “We will have choices to make in the future, dear readers, hard choices.”

    On the other hand, Father, the Church in Germany where I believe they get supporting tax from the laity but delivered and guaranteed through the State, and consequently rather well off, is in meltdown!

  4. chantgirl says:

    Though this might not mean much for most Catholic priests yet (unless it becomes the basis for future rulings), there are already very weird taxes relating to rectory values in some dioceses. In some localities, priests are supposed to pay federal taxes relating to the value of the rectory in which they live, even though they have no say in which parish they are assigned, and even though they have no real ownership of the rectories they inhabit. A priest sent to an affluent parish with a nice rectory may owe more on his taxes than a priest who is sent to a poor area with a smaller rectory. It seems incredible to me to tax someone on property that they do not own, especially when they don’t have a choice as to where they live.

  5. Sonshine135 says:

    Elevation Church has become a real scandal in these parts. They are one of the many young, dynamic, and entertainment-oriented venues for Sunday “Worship”. Apparently, there are some really screwy things going on in that church. A lot of the money that was given towards his building project came from presales of books to his congregation that haven’t even been written yet. Needless to say, he has a captive audience. The point is that these Mega-Churches in the south have really led to a universal condemnation and support for groups like this Freedom From Religion Foundation. That bleeds over to the Catholic and other mainstream Protestant Churches that, a lot of times, are just trying to keep the lights on and the candles burning.

    The Obama Administration doesn’t help either. There has been a noticeable uptick in the amount of audits of religious associated organizations. In my Knights of Columbus Council, we have been very fortunate to have extremely good Treasurer and Financial Secretaries who keep great records and therefore, us out of trouble. The semi-annual audits have become a very big pain and cost about 40-80 man hours a piece! This is for a 501c8 with a $30,000 budget. It is no fun folks, and it is going to get a lot worse.

  6. Fr AJ says:

    Each year our Diocese sends out a memo telling us how much the housing allowance is for the tax year, so far it’s been under $10,000. We are supposed to add that on to our pay as “independent contractors” to get our total income for taxation.

  7. AGA says:

    Within most of our lifetimes, we will see the complete separation between Church and State in our Country. All special excemptions or “benefits” will cease. The military chaplaincy will end — or change dramatically, beyond recognition.

    We shouldn’t forget that within the former USSR and the form Soviet bloc countries religion was never outlawed. It was ostracized.

    In the mid-90s, I remember talking about this to a young Polish Army officer, who had spent most of his youth under communism, and who had actually lived for many years in Havana, where his father was an attache. I asked him what was it like going to school in anti-religious, communist states such as Poland or Cuba. He said that faith was mocked and ridiculed. You were free to believe whatever you wanted. But if you believed in God, it was akin to someone in our country believing the Moon Landings were fakes or that aliens landed in Rosewell, NM in 1948. You were treated like a loon.

    Frankly, we are already very close to this. Any religious belief expressed publicly is treated like a break in the secular decorum. We should all keep our beliefs to ourselves. There is no more common belief system to share, to appeal to, or to use as a point of reference

    Catholics among the various institutional bureacracies are too often the biggest enforcers of this secular decorum against religion. Censorship doesn’t have to come from without, we have enough censorship from within. And of course this is a huge victory for the Enemy — when we are groomed to do his bidding without outright coersion.

  8. Johnno says:

    Hey, socialist governments have to pay for all their promises somehow… As usual, atheists are the useful idiots of the state who are only too happy to serve. Of course all those Protestant mega-churched and what not are also to blame for the impression they make, but atheists continue to outspend their capacity for critical thinking by being unable to discriminate that one of these things is not like the other, but then again they believe in the evolution of everything so it’s all just some common family ancestry to them anyway, no matter how ridiculous the lines they wish to draw.

  9. Venerator Sti Lot says:

    “May we say hallelujah”? Even if they mean to say it ironically, in a voice dripping with sarcasm, it rather decisively undercuts them by meaning what it means, “Praise JaH(WH), i.e, the Holy and Life-giving Trinity!”

  10. anilwang says:

    This is an issue I’m torn about.

    OTOH, there is no way it could be unconstitutional. If a state created a law whereby a subset of no-profits had certain tax benefits, it would be constitutional. Making that subset be based on religion doesn’t automatically make it unconstitutional.

    OTOH, the last thing the American part of the Church needs is to fall into the state weaning that the German Church has. That is lethal to the American part of the Church and toxic to the Church in the rest of the world.

    OTOH, this is a power grab meant to ultimately crush religious institutions into submission and it must be fought.

    OTOH, while Catholic and Orthodox priests get minimum wage (at least in Canada, by law since I don’t believe pure monastic vows of complete poverty are accepted), it is most certainly the case that many Protestant ministers pull in huge salaries and run their churches like NGO corporations marketing a product. Something has to give. They exploit religion to make a buck and very often pump millions nationally and abroad into things that are meant to undermine the Church and push the secular agenda (even if it is just to spite the Church). Anyone who’s familiar with the situation in Africa or the Philippines knows what I mean.

    So I do think there needs to be a chastening to sift out the authentic faith from all the pretenders. This applies to Protestants (there are many faithful ministers who try to humbly follow the Gospel the best they can, even though they have an incomplete Gospel), but it also applies to Catholics who have gotten too comfortable making friends with the State for the sake of 30 pieces of silver.

  11. FranzJosf says:

    I don’t think it is likely that this ruling will stand. If necessary, it might make strange bedfellows because there are secular situations in which housing is part of compensation. As a boarding school teacher, it is part of mine.

    (Love that ruling was made by Judge Crabb. Earlier today I encountered an article about the “Knock-out” game written by a Mr. Boxer. My high school principal was named Mr. Wallace Grimm (aka “Warden Wally”), and boy was he.

  12. Eriugena says:

    Think of those (mostly Jesuit, I think) Martyrs murdered by “native Americans”. Is the American Government planning on giving compensation to the Company of Jesus? No, the only compensation they give is to Mohammedan lesbians from Tunisia…

  13. Supertradmum says:

    The American Constitution has been misrepresented as to complete separation of Church and State, and the Catholic Church has never taught that-only that the State and the Church had different spheres of responsibility and that it was the duty of the State to protect the one, true, holy, Catholic and apostolic Church.

    This government is Marxist leaning, which some of us tried to warn against as early as 2007. Americans, even some trads I met in Chicago, keep saying, “The worse won’t happen here.” Why not? All the rules are being put into place for the complete marginalization and, finally persecution, of the Church.

    As long as good Catholics keep sitting comfortably in denial, the steamroller will continue.

    But, sadly, the so-called Obama Catholics, and I have only met those types in Iowa so far and no GOP Catholics except in the TLM group, believe it or not, have only themselves to blame once they have to make decisions either for the Faith or against it.

    Remember, however, that the vast majority of English went over to Henry and the Anglicans, leaving a persecuted remnant. And, all the laws persecuting Catholics were voted in by ex-Catholics.

  14. Lepidus says:

    I’m torn on this one as well. When I was growing up, priests lived on the parish grounds, got next to nothing to live on, and drove beaters. Now, diocesan priests get a somewhat decent salary, especially considering that if they keep their noses clean they have guaranteed “employment” and no college expenses for the kids. They live in their own condos, drive average cars, go to Packer’s games, and take ski vacations (on their own dime). Then a priest friend of mine told me what he gets in Christmas gifts from the parishioners. On top of that, we take a look at some of the priests that got the boot for their behavior and find that many of them are not in the poor house. Looking at that, I start to think that maybe taxes like the rest of us pay might not be such a bad idea. Maybe an exclusion for religious order priests who don’t have anything to their names.

  15. Papabile says:

    On a related note, the lawsuit depended on calling the federal tax deduction a “tax expenditure” by the federal government. This, of course is all the rage in DC that tax deductions and exemptions are really “expenditures”.

    If one accepts that, then one will very quickly see Churches losing their tax exemptions entirely.

    This, of course, is an intentional side effect of calling them expenditures. Regardless of where one is on the proper level of taxes, calling them expenditures leads to this.

  16. Kathleen10 says:

    Did ya hear about the terrorist who held 100 lawyers hostage?

    He said if his demands weren’t met he would release one lawyer an hour.

  17. Uxixu says:

    Can’t be stated enough that separation of Church and State is nowhere in the Constitution. Or that the establishment clause is only meant to prohibit an official Church of the United States.

    It’s not a zero sum game. This lawsuit is rubbish and should be laughed out of court. Check that, it shouldn’t even enter court as it’s absurd on it’s face.

    That said, given the reality of current tax law, as long as the organization owns the property and not the individual, they should be completely exempt… at least to a certain point. Your parish priest, be he in Beverly Hills or Podunk, USA, has no choice where he is, so should be 100% exempt.

    I think to some extent that bishops and such is a different scenario and I have a little less problem with taxation on the like of those higher up in the hierarchy, be he Rick Warren or the Archbishop of a large diocese, though whether it be born by the individual or is partially contributed by the tithe is a different story. As long as it’s not prohibitive and malicious.

    OTOH, as this administration has already shown little compunction in either being deliberately consorting or willfully neglecting to reign in their allegedly rogue IRS, I’m not inclined to give them or any administration ANY rope.

  18. Titus says:

    I am skeptical of the standing ruling here, although it’s not quite my bailiwick. It just smells like taxpayer standing in sheep’s clothing.

    Also, Father, some friendly pointers for reporting on federal lawsuits:

    * the federal trial courts are United States District Courts. There are 94 judicial districts, but they are not numbered: each is identified by a directional descriptor and the state, e.g., “Southern District of New York.” A “District Judge” is a life-tenured federal trial judge sitting in one of those districts.

    * decisions of District Courts are appealed to one of thirteen federal Courts of Appeal, sometimes referred to as “Circuit Courts” because each is a Court of Appeals for the N Circuit. (The states are broken into eleven circuits, then there is one for DC and one for the “Federal Circuit” that hears certain appeals regarding patents, customs, and claims against the US.) A “Circuit Judge” is a life-tenured federal judge sitting on one of these Courts of Appeals.

    * Cases before the “Nth Circuit” are usually heard and decided by a three-judge panel of Circuit Judges from that Circuit. In rare instances, all of the judges assigned to that Circuit sit en banc and decide a case. In even rarer instances (especially in important cases), a District Judge will sit “by designation” on a Court of Appeals panel if it is not possible for the panel to be filled by Circuit Judges. But it is astonishingly rare for a Court of Appeals opinion to be written by a District Judge sitting by designation.

    Re: Papabile’s comment that “the lawsuit depended on calling the federal tax deduction a ‘tax expenditure’ by the federal government.”

    I don’t believe this is correct. Looking at the opinion, the plaintiffs claim an injury because religious ministers enjoy a tax benefit that they (the plaintiffs) do not. Now, the inanity of calling tax exemptions “expenditures” allows them to talk about it in a way that sounds more like a subsidy, and I agree that that language is used with intentional consequences. But, if these guys can bring their claim at all, I think they can bring it regardless of whether or not you characterize the issue as an expenditure by the government or a (free) benefit afforded the taxpayer.

  19. I’m wondering how this tax deduction from salary for housing works and why I haven’t been able to get it. Like Fr. AJ, I’m required to add on a certain amount (approximately $720/mo. for this diocese) to my pre-tax income as my housing allowance. Note that this is pre-tax, which means it’s taxable income that I have to account for in my monthly deductions. This is in addition to the entirety of FICA and Medicare, as priests are considered independent contractors. I guess the Freedom From Religion Foundation doesn’t have to worry about Catholic priests paying less taxes.

  20. Supertradmum says:

    Here is real separation of Church and State—sign of the times.

  21. Hans says:

    Seems as though Judge Crabb is rounding out her resume for promotion from the court of first instance to the appeals courts.

  22. excalibur says:

    This ‘judge’ has been overturned on religious issues before. She once ruled that the President could not call for a national day of prayer, which the Appellate Court slammed down her throat.

  23. Fr AJ says:

    Lepidus, keep in mind every Diocese has a different pay scale which may depend on the cost of living in a certain area. In addition, in my Diocese every priest lives in a rectory on church grounds, we don’t have anyone off living on their own as you describe and, given our salary and taxes, I don’t see how anyone could afford to live in a condo and pay for it out of their salary. Some may have had good jobs and saved their money before becoming a priest or others may inherit family money.

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