Kerby Anderson

The Internal Revenue Code allows ministers and other religious leaders to take a housing allowance exemption, but that has now been threatened by a ruling by a federal district court judge. Her decision is currently on hold and has been appealed to the Seventh Circuit Court of Appeals. The Alliance Defending Freedom brief argues that the housing allowance provided to ministers “does not transfer public monies to ministers or houses of worship, nor does it result in any administrative or financial relationship between the government and religion.” Therefore, it is a permissible accommodation of religion and is consistent with this country’s “practice of exempting churches and other religious organizations from government-imposed tax burdens.” It is worth noting that the housing allowance exemption actually predates the IRS code. Originally, it was provided for employees who had to live in a particular location in order to do their jobs (ranch hands, innkeepers, and military personnel). Hiram Sasser (First Liberty Institute) asks, “Why would anyone ban rabbis, imams, pastors, and other religious leaders from a decades-old housing exemption simply because they are religious?” Ken Klukowski (also of First Liberty) reminds us “The parsonage exemption mirrors other housing allowances for teachers, first responders, and military personnel who must live in the community they serve.” Many pastors already pay both the employee and employer taxes on Social Security and Medicare on their housing allowance. Removing the housing allowance without considering the self-employment tax issue would put ministers at a disadvantage in their tax burden. The IRS code, therefore, is a permissible accommodation of religion because it lifts the governmentally imposed tax burdens on ministers and other religious leaders.