Should Church Ministers Get a Tax-Exempt Housing Allowance?

Is this another attack against religious freedom? The “Freedom From Religion Foundation”. In his article “Clergy Housing Tax Break Declared Unconstitutional – Everything You Want to Know and More“, Peter J. Reilly reported,

On November 22, 2013, Judge Barbara Crabb ruled that Internal Code Section 107(2) which exempts from income tax amounts, designated as housing allowances,  paid to ‘ministers of the gospel’ is unconstitutional.”

Crabb ruled in favor of the “Freedom from Religion Foundation” and its atheist presidents, Annie Laurie Gaylor and Dan Barker. Sadly, some “pastors” have taken advantage of this, and have built huge tax-free homes from the selling of books and being the head of a congregation, congregations, or a whole denomination.

What would happen to churches if this tax-exemption were removed? The writer of the Forbes’ article above, Reilly, rightly noted in 2011 (“Work, Fight and Pray – Vestige of the Medieval in Our Tax Code“),

“When it comes to housing, it would seem that Section 119 is sufficient.  If your employer provides you with a place to live, so that you will be near at hand, the value of that place to live is excludable from your gross income.  If that place happens to be a room in a hotel for the manager, a rectory or fifteen square feet on a nuclear submarine, the principle is the same.  That’s not the way it is, though.  The military and the clergy are special.  Since at least historically, housing tended to go with their jobs, monetary allowances paid in lieu of actual housing are exempt from tax.”

In stead of placing a cap on the ministers’ housing-allowances, a few have made war on religion claiming that these benefits are unfair. Yet, they conveniently forget that “ministers of the gospel” are also excluded from certain non-profit tax benefits like the forgiveness of student loans and work earned income credit while other religions are allowed.

Is this another attack against religious freedom? Yep. No matter what the courts decide, churches will simply purchase and provide their ministers’ homes, and thus make their housing tax-exempt. That is why so many ministers have previously lived in housing provided by their congregations, and this is why there is a tax exemption for ministers. In the end, these atheists do not appear to see that they are wasting their time. Either way, smaller and working-class churches will provide housing for their ministers, and ministers will continue legally avoiding this tax. Churches will continue to support other charities and non-profits that they will essentially pay no additional taxes. Their ministers may soon be volunteers from those non-profit organizations. “Even so the Lord has commanded that those who preach the gospel should live from the gospel” (1 Cor. 9:14, cf. 9:1-18). These attacks against the Christian faith are fruitless. Even when they start throwing ministers in prison for “bigotry” and fining churches, the attention that they will give will cause faith in Christ to thrive.


Can Americans Still Thank God?

About Scott J Shifferd

Minister, church of Christ in Jacksonville, FL. Husband and father of four. Email: ScottJon82[at]
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3 Responses to Should Church Ministers Get a Tax-Exempt Housing Allowance?

  1. Robert Baty says:


    What has generally not been publicized is the role members of the church of Christ played in bringing the FFRF v IRS – IRC 107 lawsuit before Judge Crabb.

    It goes back to how the folks at Abilene Christian got caught with their hands in the cookie jar and instead of doing the right thing they called in George Bush and Omar Burleson to put the squeeze on the IRS, and so Abilene, Pepperdine, and others have been able to let their employees register as ministers and claim the tax free benefit under IRC 107.

    So we’ve got multitudes of basketball ministers, math ministers, history ministers, ad nauseum at private schools like Pepperdine based on the government bowing to the demands of Bush and Burleson and recognizing Pepperdine and other schools, contrary to fact and law, as “integral agencies of the church of Christ”.

    These things should not be.
    Maybe they won’t be any longer, depending on how the FFRF case turns out in the long run.


    • First, do you have reliable sources with eyewitness records for these accusations? If they were guilty of such, they would no longer be of the Church of Christ by definition.

      Second, these 2 schools are no longer considered faithfully in line with the beliefs of the churches of Christ by most of the 12,000 congregations in the U.S.


      • rlbaty says:

        I have my eyewitness experience and public records to support such substantive claims as I make regarding the history of these important public issues.

        It’s a history that is little known and a story waiting to be told and considered by informed folks with an interest in such things.

        I was hoping that it might form a case study regarding government entanglement had the FFRF case gone to trial. The matter is referenced in paragraph #38 of the FFRF Complaint. Alas, the case did not go to trial and so that story will have to be considered and developed elsewhere, at least for the time being.

        Depending upon your interest and our time, we may develop the details further here or elsewhere by mutual agreement.


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