Tax exclusion for ministers
Ministers of the gospel can exclude
( 1) the rental value of a home furnished as compensation;
( 2) a rental allowance paid to them as compensation, to the extent the allowance is used to rent or provide a home; or
( 3) the rental value of a home owned by the minister.
The housing or housing allowance must be provided as compensation for the conduct of religious worship, the administration and maintenance of religious organizations, or the performance of teaching and administrative duties at theological seminaries.
Is this really fair?
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Captain Obvious says: No, but life isn't fair.
Religious institutions should be taxed double or triple (like cigarettes) for the public harm they cause.
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No, it isn't fair. I suppose it isn't even really all that surprising or relevant either. I've been up all night studding, and when I came across this I felt like sharing.
I knew that religious institutions received special tax treatments, but I didn't know that their was special tax treatment for Ministers as well.
Not just any ministers either. Ministers of the gospel. I wonder if that means this is only for christian ministers? When I get home I'll look it up.
§ 107 and Reg. § 1.107– 1.
I would go much farther on that religion tax Brian.
The great state of Connecticut has the taxes set up so as to not reduce the number of smokers as they are a large source of revenue. Based on some quick back of the envelope math, there is about 2.3 billion dollars/year at stake from direct taxes, the big tobacco settlement from a decade ago and the deals that we have with our two Indian casinos.
Any decrease in smoking would cost the state a crap load of cash, so they really don't want to end the gravy train, despite the two faced lie they make every time the question is raised.
A tax on religion should in some way take into account the fact that many of the worst groups directly assess their members 10% of their income. Since there is no transparency, accurate numbers just don't exist, so the first order of business needs to be figuring out some way to collect the information on just how much money they are actually siphoning out of the tax system in the first place.
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Well, I found the definition that applies. Title 26(A)(2) is the section on reporting income from self employment under which ministry is accounted for. Under that, we have section 1402 (a)( 8 ) which states:
The bit about section 119 is also interesting. Apparently, as long as they eat at home, they don't have to include what they spend on food either.
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I see all kinds of bussineses close in my area, restaurants, dry cleaners, etc. But not the fucking churches, it's seems like a new one pops up every year. I never researched how exactly they get tax exempt status or how the whole process works. I can't believe this shit is legal...
It probably isn't legal. It's likely no one has challenged it because of the negative backlash that would come from antagonizing the religious.
"I do this real moron thing, and it's called thinking. And apparently I'm not a very good American because I like to form my own opinions."
— George Carlin
If it is written in the law, then it is legal. That does not make it right though.
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It is legal, and it is very easy to get set up as a religious 501(c)3 - I once helped a friend research it.
-- I feel so much better since I stopped trying to believe.
"We are entitled to our own opinions. We're not entitled to our own facts"- Al Franken
"If death isn't sweet oblivion, I will be severely disappointed" - Ruth M.
Again, because no one challenged the law. Just like DOMA and DADT.
"I do this real moron thing, and it's called thinking. And apparently I'm not a very good American because I like to form my own opinions."
— George Carlin
What I love about this, apart from the legal information, is the connection between churches and businesses. I guess it never occurred to me that a church is a type of business, or that it fits into the larger economy.
This line of thought about special tax exempt status of ministers also leads me to think of the special treatment of married people (I'm one of those, almost 9 years) and homeowners (recently became one) and how these are assumptions that I also never questioned until adulthood and the need to prepare my own taxes. No particular point there, except to note that the law is resting on certain fundamental assumptions. Thanks for the food for thought.
Jackie
Where you been? Some of the mega churches out west not only have day care, they have restaurants, gift shops, hair salons and more. How they get around the prohibition about working on the sabbath, I don't know.
-- I feel so much better since I stopped trying to believe.
"We are entitled to our own opinions. We're not entitled to our own facts"- Al Franken
"If death isn't sweet oblivion, I will be severely disappointed" - Ruth M.
Didn't mean to be silly. Something can be right in front of me, but sometimes it takes a bit of a push to see it in a new way. The business thing wasn't obvious to me- I work in the semiconductor industry, which is pretty profit-driven, international, and on the open market. I don't think of my church (I am an atheist but go to a UU church) as a business- but it clearly is, since it takes in cash and provides services. Now that you mention hair salons and the like, I remember a recent radio story about churches that operate excercise gyms, complete with membership fees, etc. Also, the hospital where I gave birth to my kids was a Catholic hospital (with religious iconography and statues in the lobby) yet somehow it was covered by my regular old insurance, and nobody thought to mention it at my OBGYN's office. I wasn't exactly asked, and no one assumed that it would matter one way or the other.
I've never been to a megachurch, though I have heard about them. I don't think I've ever seen a church with a restaurant, though.
Jackie
I've never been to one either - saw a report on TV - 60 minutes maybe? Awhile ago. Have one mega church just down the street from me. Older, so it doesn't have all the whizz bangs some of the new ones do. They did put in a pretty fancy RV park on one corner of the block they own a couple of years ago. They have big evangelical meetings in the summer and people come and stay in the RV park or in what looks to me like storage sheds with electricity. Pretty ugly and my husband and I call them the "dog kennels".
Yeah, even the smaller churches economically impact their local economy - including not paying taxes. I'm of two minds about this. When I was in junior high my best friend was a preacher's kid. Her family had to move to a larger church as they were literally eating plain boiled rice three meals a day. But then look at the life style of the Jim Bakkers and Ted Haggards. People like that are definitely not paying enough taxes.
edit: Hospitals - a couple locally are religious affiliated. And yeah, insurance doesn't care. All of the local hospitals are not for profit, so there aren't any private ones and those are the ones your insurance gets huffy about. My sister who is a Jehovah's Witness wound up at a Catholic hospital for her by pass surgery. It was funny because she is one of those who hate Catholics because they are "idolaters". But they had a special ward and surgical unit for people who refuse blood transfusions. And they wrote off the entire cost of her operation - she didn't have insurance and just a minimum wage job. So she was impressed in spite of herself.
-- I feel so much better since I stopped trying to believe.
"We are entitled to our own opinions. We're not entitled to our own facts"- Al Franken
"If death isn't sweet oblivion, I will be severely disappointed" - Ruth M.
Now that you bring that up, I was going to start a topic about making a religion but I saw someone else had done something similar. Anyway is there a limit to how many followers you need to start a religion? Can't we just gather all the forum members and create an atheist religion that has the scientific method as it's commandments? Then we can get tax exempt status, the website will pay for itself, and we'll be paid out the ass in no time!!! Two particular idiots that amaze me with the religions they created El Ron Hubbard (shitty sci fi writer), and José Luis de Jesús Miranda (lives in my great state of Florida.) It's always amazing to me considering how incredibly stupid these two people are that they could make so much money with what seems like such a poorly thought out plan. SO LETS START A RELIGION I'M SURE WE COULD ALL USE THE MONEY!!!
The most important thing you need to know is that starting a religion is only a way to make money if you are planning to be dishonest about it and break the law. Funds from any non-profit may not enure to any private individuals.
Secular non-profits are also federally tax exempt (I don't know about all of the local laws).
There are only three advantages churches have over secular groups:
1. They aren't audited as frequently or as easily, and the reporting requirements are almost non-existent.
-This is only an advantage if you plan to be dishonest, as I have mentioned. Otherwise it's just less a few hours of paperwork filing.
2. Bush's unconstitutional faith-based initiative.
3. Ministers of certain religions, and Amish, are allowed to exempt themselves from social security.
-They aren't supposed to get the benefits of social security, but some times still do (thus you are paying for religious figures to get benefits)
-The organization must demonstrate that it provides for them in some way for retirement.
There are secular equivalents to pretty much everything else.
Any on-location professional can exclude certain living expenses from income tax- the foreign exemption is something like 80k a year. If you have a certain set of skills your employer needs, and you are relocating for your employer's benefit, you can also exclude the cost of housing and certain living expenses from your income. Note: The janitor at the church doesn't generally get this exclusion. There's a matter of distinct professional skill required. If he was specially trained to clean things and anoint them in holy water, then maybe... but that's beside the point.
As to those three points:
#1, as I have said, is only a real advantage if you are planning to be dishonest. I hope you are not.
#2 is a piece of shit law from a bigoted president in blatant violation of the constitution- we need standing in court to challenge it, and that kind of standing for suit would be difficult to find. All I can suggest is that you withhold all of your taxes from the IRS, and instead send them a letter explaining the faith based initiative, and how it is against your religion to pay a tithe. You'll have to put all of your seizable assets out of reach of the IRS, otherwise they'll just take what they are owed- that will force them to take you to court. Spend a couple years fighting it, and you may eventually get a ruling from a higher court that you have to pay your taxes, but that the faith based initiative is unconstitutional federal spending.
This wouldn't be a means to personal profit either; it would just get government money back where it should be.
#3 This is the same kind of unconstitutional unfairness. If you are ideologically opposed to paying social security tax, you could do the same as in #2- file the social security exemption forms and file a letter with the IRS. You'll have to prove you have some kind of group of coop with ability to take care of you when you retire (a replacement for Social security), and then wait to be taken to court by the IRS. Eventually, they court will be compelled to rule in your favor.
You would probably find that setting up the needed replacement for social security would cost about as much, or even more, than social security does though- this would be purely ideological, and not a means to profit.
(Edite) NOTE:
Eep, I just realized:
Make sure you do this in a legal way! Consult a tax professional/lawyer first if you plan to do anything like this! (Are there any tax experts of lawyers here?)
You don't want to be fined or jailed for moving your funds in an illegal way, or storing them somewhere illegal (this is particularly complicated since the patriot act- be careful what you do with money).
If you want to get rich honestly, invest in capitalistic enterprises. If you want to get rich dishonestly... well, prepare to go to jail if you get caught. I really don't think you want to follow in the footsteps of many of these famous preachers who have been exposed.
If you want to make a non-profit org- a church or a regular non-profit, it doesn't really matter which you go with unless you're trying to get federal funding.
Yes, it has been challenged and there have been several Supreme Court cases outlining exactly what can be and can't be exempt.
Walz v. Tax Commission of New York City 397 U.S. 664 (1970) Is the case that offered the best argument against it. Walz was claiming that churches being exempt forced him to pay more taxes and thus support religion. The decision was 8-1 against Walz. So like it or not, it is legal and highly unlikely to ever be overturned.
DOMA & DADT are both facing challenges in federal court. It take a long time for any case to make it to the Supreme Court. In time, they probably will in one fashion or another unless they are repealed by congress.
If, if a white man puts his arm around me voluntarily, that's brotherhood. But if you - if you hold a gun on him and make him embrace me and pretend to be friendly or brotherly toward me, then that's not brotherhood, that's hypocrisy.- Malcolm X
Well, not a lawyer here but I do know what will ring alarm bells in high places.
Several decades ago, the feds set up a law that states that whenever $10,000 or more gets moved from one place to another, it will silently create a record that is apart from all the normal records of financial dealings. The idea being that that way, if anyone tried to to a bit of money laundering, they could tell right away.
Subsequently, you just can't keep that reporting system as secret as it was intended to be. Eventually, if the government wants criminal trials, they have to lay down evidence in public. So the scum criminals found out about it and pretty much started doing transactions that were below the threshold. This is called “structuring” (of financial transactions to avoid prosecution).
In order to make this law work, there is no specific dollar value attached and the government has to rely on traditional investigative techniques. However, if you are doing some fairly scummy things and you get caught, then having a whole series of, say, $9,000 transactions can get you an additional charge of structuring on to of what ever else you would have done wrong.
They do use that provision for tax evaders BTW. Kent Hovind and his wife ran at least 250 separate transactions to hide over two million dollars that way. Look where that ended them up.
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