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It's fairly typical of clergy in the US. They opt out of SS, and don't get a guaranteed income later. The housing allowance allows one to put money into a house and have assets later. Not to mention, cover business expenses, the way anyone else would do so.
Keep in mind, the housing allowance really just gives on a tax deduction off of the self-employment portion of the taxes. He is considered a private contractor, and pays self-employment fees. Just like any small business owner does. If you want to open a business and work out of your home, go for it. You can probably even get a deduction.
Because it makes for a healthy, stable society to have churches.
Anyone can claim business expenses.
That is obviously an opinion only. Many, many would talk about the indiscretions, the violence condoned, the abuse that occurs as exactly why churches do nothing of the sort. The healthiest societies in the world exist in the most non-religious countries. That is, if you measure healthy society by the lack of crime. The most religious countries in the world have the most human abuses.
Oh that is weird. How do you use capital to run a business if it is sitting in the bank?
Some amount would be appropriate for emergencies and/or capital improvements to be applied at a later time, like any savings account and no problem unless the money were used for other purposes than legitimate business expenses.
Housing costs are a business expense to a pastor. My pastor entertains in his home, and uses it for ministry. Heck...he had to rent a house because he took the job and moved. It's no different than anyone else that claims business expenses on their taxes.
My pastor has also opted out of SS, meaning he won't draw SS when he retires. To take away a housing allowance is a serious breach of trust between the government and America.
Nonsense. It is one thing to claim a partial home office expense and another to claim your complete residence as a business expense. It is ridiculous to suggest a pastor be able to exempt his full housing expense. It is already ridiculous to be able to opt out of SS for religious reasons when the general public cannot.
Nonsense. It is one thing to claim a partial home office expense and another to claim your complete residence as a business expense. It is ridiculous to suggest a pastor be able to exempt his full housing expense. It is already ridiculous to be able to opt out of SS for religious reasons when the general public cannot.
I know that back in the day civil servants didn't pay into ss. I think they did away with that in the 80s. They paid the same amount into a different system so they were covered anyway. Is he paying into something that covers him or will tax payers be on the hook if something happens to him?
This is unrelated but it's a different way that these organizations are bilking the system(they call it Satan's) we talk about on our exJW site sometimes. People will forgo paid work to devote more time to the ministry. They end up so low on income that the government ends up supporting them and many times their children. They are working, they are just working for the church and the government is paying the bill that allows them to do that. The very same government they claim is out to get them.
I'm sure this will get appealed all the way to the SCOTUS. Somehow it seems right though, especially when one thinks that there are many low income workers who do not get that benefit. From the decision:
"A desire to alleviate financial hardship on taxpayers is a legitimate purpose, but it is not a secular purpose when Congress eliminates the burden for a group made up of solely religious employees but maintains it for nearly everyone else."
What possible argument could one make to maintain the exemption?
The obvious one.
Church exemptions are a result of a deal with the church and the state. Basically, the deal goes as follows:
Quote:
a temple must be organized and operated exclusively for religious, educational, scientific, or other charitable purposes
net earnings may not inure to the benefit of any private individual or shareholder
no substantial part of the temple’s activity may be attempting to influence legislation
a temple may not intervene in political campaigns
a temple’s purposes and activities may not be illegal or violate fundamental public policy.
In order to be tax exempt, the church has agreed to follow the laws of a government.
So, let's assume the government tomorrow decided to stop abiding by these laws, as you just pointed out. What does this mean? It means to the government has broken a treaty. Why should the church continue to serve the government? It's obviously now cut its ties with the church, so the church has no need to serve the state.
Further, here is a second reason.
Apparently, the NFL League Office also has a similar exemption. However, they have not operated exclusively for religious, educational, scientific, or other charitable purposes. Nor are earning out of the hands of private shareholders. And recently, they've been pulling crap that is clearly political. That's at least 3 of the 5 standards not met.
Given this, which do you think better deserves tax exemption? A group that may be obnoxious to some people, but nonetheless helps alot of people through their donation to charity? Or a group that develops cities like it or not, and throws tantrums when they have an "opinion" about politics?
The obvious one.
Church exemptions are a result of a deal with the church and the state. Basically, the deal goes as follows:
Let's look at the qualifications you've provided one at a time:
Quote:
a temple must be organized and operated exclusively for religious, educational, scientific, or other charitable purposes
A private residence is not religious, educational, scientific or charitable, in nature or purpose.
Quote:
net earnings may not inure to the benefit of any private individual or shareholder
Most private residences contain furniture and appliances purchased for the owner's personal use, by the owner from their own working salary. That is most definitely an example of 'net earnings' being inured to the benefit of a private individual.
Quote:
no substantial part of the temple’s activity may be attempting to influence legislation
By voting, or addressing a city council, a homeowner is attempting to 'influence legislation'.
Quote:
a temple may not intervene in political campaigns
Again, by voting, a homeowner intervenes in a political campaign.
Quote:
a temple’s purposes and activities may not be illegal or violate fundamental public policy.
This much, I won't dispute -- the owner of a private residence must still follow the law.
So, given that a private residence fails to qualify under four of your five criteria, why should such a private residence receive an exemption from reporting their housing allowance?
Housing costs are a business expense to a pastor. My pastor entertains in his home, and uses it for ministry. Heck...he had to rent a house because he took the job and moved. It's no different than anyone else that claims business expenses on their taxes.
My pastor has also opted out of SS, meaning he won't draw SS when he retires. To take away a housing allowance is a serious breach of trust between the government and America.
You are being intentionally misleading or don't understand much about how the clergy housing allowance exemption really works.
1. Your pastor may not collect SS when he retires, but he is also not paying any SS tax - not sure what point you were trying to make here
2. The housing allowance exemption deals with the income side not the expense side. For the non clergy employee or contractor that receives a housing allowance or housing is provided to them at no charge, the fair market rental value of that housing must be reported as income. As an example, lets say a secular employee's total compensation is 50k salary and free housing worth 3k per month, they would report taxable income of 86k. A member of the clergy does not have to report the value of the housing as income at all, so any discussion of the deduction of business expenses is meaningless and moot.
I have done tax work for clergy before, the housing allowance is a huge loophole that they take advantage of to avoid paying taxes. In the typical arrangement a clergy member would agree to receive lets say 100k combined total compensation. I have seen arrangements where this 100k is split 40k taxable salary income and 60k non taxable housing allowance. They will push the fair rental value as high as they can go without getting caught.
It is clearly unconstitutional to make a secular employee pay more tax on the same type of income and housing allowance as compared to a church employee or contractor. There is no legal basis for the disparate treatment.
Because a home is an asset. It's one of the ONLY assets clergy might have come retirement age.
Wouldn't the pastor have at least the 6.2% Social Security tax in their pocket to invest for the future? The same 6.2% that the rest of us are forced to send to the government instead. In fact, if your pastor took that 6.2% and invested it, he would most likely receive significantly more during retirement than the rest of us poor schlubs that send our money to the SSA for them to give back later.
Your pastor is simply doing what the GOP has proposed we all do with respect to SS. Eliminate the tax, let people save and invest their own money for their future retirement.
The SS issue and the housing allowance have nothing at all to do with each other. Non clergy employees can be exempt from SS also, some railroad and government employees and they don't get tax exempt housing allowances.
Because a home is an asset. It's one of the ONLY assets clergy might have come retirement age.
If a home is an asset, it should be taxed as a residence. Its primary function is not religious; it is a dwelling-place, under the law, that happens to provide a place of worship.
If a home qualifies as a church because it's occasionally used as one, then logically, my condo qualifies as a public pool, since I let my non-resident overnight guests use the bathroom to bathe. I should be allowed to write off my water and heating bills on my taxes.
For what it's worth, I would be satisfied if a residence-as-church was taxed on the basis that the worship area is exclusively used for worship and that it's not used as 'part of a residence'. Claiming an entire residence because you use one room for a specific purpose is like claiming that your insurance covers wear on the house key because it's 'used to secure the front hall'.
Looks like BF has left the thread. He has posted elsewhere 11 times since his last post here. Have we found something even he finds indefensible?
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