As tax time begins, our church legal expert Richard Hammar warns ministers, pastors and clerics to be mindful of a legal battle that has strong financial implications on their personal and church taxes in 2011.
In the January 2011 issue of Church Law & Tax Report, Hammar highlights tax developments, drawing special attention to a California court case that threatens to extinguish a federal tax break which dates back to 1954, the parsonage exemption.
(Spearheaded by family patriach Kirby Hensley, the Hensley siblings and the mail order Universal Life Church of Modesto, CA., one of their objectives of existence was the Hensley vendetta toward Christians and traditional Churches to do away with tax benefits for all Ministers. Hensley himself stated: "I just want to raise all the hell I can, and get all the kooks and what-have-you as churches; then they (the government) will have to tax them all." Led by Hensley and atheist Madalyn Murray O'Hare's initiative, atheists still today continue to attempt to derail the tax free allowances available to traditional memebers of the clergy. The Brother Michael led Universal Life Church of Florida does not support such atheist led initiatives or the ordination of atheists and follows in the path of the original Universal Church of the 2nd century.)
Many churches give their pastors and ministers an allowance to help ease housing-related expenses, such utility bills, repair and yard work costs. The parsonage exemption allows ministers to receive this money free of any federal, and in parts of the country, state taxes.
However, a lawsuit set for trial in 2011 threatens the constitutionality of sections 107 and 265(1)(6) of the federal tax code, which establishes the housing allowance for ministers.
Atheist group Freedom from Religion Foundation filed the federal lawsuit in 2009. The group asserts the unique benefit set aside especially for “ministers of the gospel” is a violation of separation of church and state.
The FFRF cites the 1989 U.S. Supreme Court case Texas Monthly, Inc. v. Bullock to assert that tax benefits given only to religious institutions violate the Constitution’s Establishment Clause.
FFRF Co-President Annie Laurie Gaylor states in a 2009 press release that the benefit is unfair to those who are not religious ministers.
“All other taxpayers pay more because clergy receive this privileged benefit,” she proclaimed.
But the late U.S. Rep. Peter Mack, Jr. declared at the making of the amendment that the benefit levels the playing field in a “godless world.”
"Certainly, in these times when we are being threatened by a godless and antireligious world movement we should correct this discrimination against certain ministers of the gospel who are carrying on such a courageous fight against this foe. Certainly this is not too much to do for these people who are caring for our spiritual welfare,” Mack affirmed.
Just this May, a federal court judge allowed the case to continue to trial. Hearings will likely occur in the fall of 2011.
Dan Busby, president of evangelical financial accreditation group ECFA, says of the lawsuit, “This is a really big deal for ministers.”
Removing the exemption would mean less money for bills and family expenses, Busby explains. He shares that the exemption would also cost churches, to which ministers will likely turn for financial help. Churches with many ministers, he adds, will be especially impacted by change to the exemption.
“It would seem to put a bigger burden on churches,” he shares.
Hammar states the elimination of the housing allowance would have an immediate and catastrophic financial effect on hundreds of thousands of ministers who have purchased their home and secured a mortgage loan relying exclusively on the housing allowance.
No ruling has yet been made in the lawsuit, and no changes have been made to the tax code allowing the parsonage exemption. Busby believes that any ruling in the case will be appealed to the Supreme Court. He estimates this will take several years and urges churches not to be too alarmed.
Still, Hammar insists that church ministers and clergy take note of the lawsuit’s implications. He also urges them to pay attention to changes in the tax code that he says will directly affect clerics and churches in America.
ref: Christianity Today
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Atheist group Freedom from Religion Foundation filed the federal lawsuit in 2009. The group asserts the unique benefit set aside especially for “ministers of the gospel” is a violation of separation of church and state.
The FFRF cites the 1989 U.S. Supreme Court case Texas Monthly, Inc. v. Bullock to assert that tax benefits given only to religious institutions violate the Constitution’s Establishment Clause.
FFRF Co-President Annie Laurie Gaylor states in a 2009 press release that the benefit is unfair to those who are not religious ministers.
“All other taxpayers pay more because clergy receive this privileged benefit,” she proclaimed.
But the late U.S. Rep. Peter Mack, Jr. declared at the making of the amendment that the benefit levels the playing field in a “godless world.”
"Certainly, in these times when we are being threatened by a godless and antireligious world movement we should correct this discrimination against certain ministers of the gospel who are carrying on such a courageous fight against this foe. Certainly this is not too much to do for these people who are caring for our spiritual welfare,” Mack affirmed.
Just this May, a federal court judge allowed the case to continue to trial. Hearings will likely occur in the fall of 2011.
Dan Busby, president of evangelical financial accreditation group ECFA, says of the lawsuit, “This is a really big deal for ministers.”
Removing the exemption would mean less money for bills and family expenses, Busby explains. He shares that the exemption would also cost churches, to which ministers will likely turn for financial help. Churches with many ministers, he adds, will be especially impacted by change to the exemption.
“It would seem to put a bigger burden on churches,” he shares.
Hammar states the elimination of the housing allowance would have an immediate and catastrophic financial effect on hundreds of thousands of ministers who have purchased their home and secured a mortgage loan relying exclusively on the housing allowance.
No ruling has yet been made in the lawsuit, and no changes have been made to the tax code allowing the parsonage exemption. Busby believes that any ruling in the case will be appealed to the Supreme Court. He estimates this will take several years and urges churches not to be too alarmed.
Still, Hammar insists that church ministers and clergy take note of the lawsuit’s implications. He also urges them to pay attention to changes in the tax code that he says will directly affect clerics and churches in America.
ref: Christianity Today
The Only Official Certified & Verified Ordinations
or Degree's Website With the Trust-Guard Seal
Universal Life Church
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©2011 Universal Life Church and Christian Academy, USA
Tel No: (850)926-6085
Official Universal Life Church Website - http://www.ulcnetwork.com
"Click Links to Join The ULC Network or For Our Sunday Service Online"
©2011 Universal Life Church and Christian Academy, USA
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