I have just completed my 2012 federal income tax return and sent it off with a sigh of relief. But once again I was troubled by something in the tax code that gives me a huge advantage over almost everyone else except other clergy.
I refer to the IRS provision that exempts clergy from paying tax on remuneration received under the rubric “housing allowance,” to the extent that the money is actually used for housing.
When this provision was passed decades ago, it made some sense. Clergy were expected to, and did, live in parsonages (usually next to the church), and lived there “for the convenience of the church.” They were in the same category as the military living in military housing “for the convenience of the government,” and both groups were exempted from paying tax on the value of their housing.
Many clergy are still in this category, and providing an exemption for them makes sense.
But the situation has changed dramatically in recent decades. Large numbers of clergy now receive housing allowances, and buy or rent their homes at places of their own choice, like persons in almost every other occupation.
I retired more than 20 years ago, and receive a pension from the General Board of Pension and Health Benefits of our Church. I still receive the benefit of the housing exemption, thanks to a resolution passed by the Board declaring part of my pension a “housing allowance.” Such a provision is surely not for the convenience of the church, but for the financial benefit of the clergy involved.
But does this special treatment meet the standard of fairness and justice that we profess as Christians? Why do my friends and neighbors in other occupations (or retired from other occupations) not receive the break which may result in a cash savings of $1,000 to $3,000 annually?
Congress is struggling to close loopholes in the tax code. The efforts are largely in vain because of the fierce opposition of the loophole beneficiaries.
Are we clergy just another group of beneficiaries fighting for our loophole? Or do we have an obligation as a band of Christians to say, “In the name of justice and fairness, close this loophole!”
Bishop Tuell, a former president of the UMC Council of Bishops, lives in Des Moines, Wash.