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At-Home Church Means Big Tax Breaks |
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| Home Sweet Church? | ||
 by Tamar Fox, July 24, 2008 |
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Look! It's the Intersection of Church and State: Somebody call the ACLU
Last week I wrote about churches and synagogues being turned into homes. This week, homes are being turned into churches.
A man in Lake Bluff, IL recently converted a portion of his house into a church, and then claimed an $80,000 break on his property taxes because of a little known church-and-state loophole called parsonage. George Michael (no, not that George Michael) has a $3 million home in Lake Bluff, complete with an electric lift for his wheelchair-bound wife. But Michael and his family still found it difficult to attend church services (specifically Armenian church services) that were handicap accessible. So Michael took an online course and became an official member of the clergy thanks to the Church of Spiritual Humanism. He then went about constructing a church in his home.
Once the “church” was completed, Michael was able to ask for a huge discount on his property taxes. This discount is called parsonage.
Parsonage is the tax rule that allows clergy to exempt from their federal income taxes a portion of salary that's earmarked for housing costs. Nearly 100 years old, parsonage originated when many congregations provided housing to attract clergy to their communities. This exemption has broadened over the years to where today, clergy can exempt the annual rental value of their home from their taxable income, even if they own the home themselves.
In 2002, the Ninth Circuit Court debated the constitutionality of parsonage. Because of that case, Congress passed the Clergy Housing Allowance Clarification Act of 2002, which President Bush signed into law. The act clarified the constitutionality of parsonage and also made clear that a parsonage allowance is now limited to the fair rental value of the home. (Previously, the parsonage value was determined using any one of three tests.)
Though Michael was initially challenged by the Lake County Board of Review, the Illinois Department of Revenue eventually found that Michael’s church is a real church (he provided photos of a church altar, the church's affidavit of organization from January 2007, church bylaws and copies of weekly church bulletins dating to December) and that he is eligible for a tax exemption.
Who says religion doesn’t pay?
Wringing comedy from preemptive despair.
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Maayan
zbird
The courts will hardly ever try to judge the validity or content of a religion, no matter how ridiculous. But they could inquire into the sincerity of the person claiming the exemption. In other words, does the guy really believe it's a church.
--Z
Null
Anonymous
Actually, small "Born Again" congregations have been meeting in homes for decades.
Jonathan
There is at least one rabbi in Chicago (and I will leave him nameless) that for years had a congregation on the first floor of his home. He ceased leading the congregation and closed it years ago, and the rabbi actively attends another shul. Nevertheless, his house it's still off the tax rolls because it is still listed as an active congregation.
Judaism, the gift that keeps on giving....
Washington DC Hard working citizen
I am livid about the tax breaks given to faux members of the "clergy." They provide absolutely no better or beneficial service than any other hard-working American. Case in point: There is a "Rabbi" that lives in a penthouse in my building. She has the mouth of a sailor, bitches about her "clients" and spends most of her time traveling all over the world. She owns countless rental property, two Mercedes, and hauls in a heafty income from all of it. She "counsels" interfaith couples about to marry. What a joke!!! She's now cut that back to only a few weeks out of the year, I suppose to meet the minimum requirement as a "practicing rabbi."
I work my butt off as a communications consultant and struggle to maintain a decent lifestyle. I've not been able to take a vacation in 8 years or do anything "fun" because" 32% of my income goes to the IRS. Meanwhile, the faux Rabbi is living the high life and paying virtually nothing to the government. The only fair answer for all Americans is a single, flat income tax rate. Loop holes put the burden on people like me who make an honest living.
thanbo
The house that my great-grandfather built in Crown Heights (which is now an empty shell, r"l), its previous owner maintained a synagogue in the basement, so he could take the tax deduction.
I went to a shul in White Oak (part of Silver Spring) which was in the rabbi's basement. They also sometimes rented space from a local public school (I guess Maryland doesn't have such strict Blaine Amendments as NY). They had, I think, tried to buy a building and failed, so the remaining bit of congregation was small enough to daven in the rabbi's basement.
I also went to a shul in a basement in Wesley Hills (Monsey area), which teetered on the brink of legality. The town, in order to discourage people from doing this, had passed a land ordinance requiring synagogues to be on at least a double plot - the plots in that area are pretty huge. However, to qualify as a synagogue and fall afoul of the ordinance, it had to hold services for 6 weeks running. So every 6th week, they went to someone else's home. Clearly they weren't going for a local tax exemption, but convenience, because the houses are so far apart that a big central synagogue is difficult for people to walk to.