Tax Free Parsonages

During my career I frequently lived in parsonages, manses, rectory, take your pick of names. Meaning it was housing owned by the church I served and provided as a part of my pastoral remuneration while serving that congregation. The church did not pay tax on it as it was church owned. What most folk don’t understand is that pastors do pay social security taxes on that property which is either the estimated rental value or 30% of your salary, whichever was greater. Pastors are self employed so no half payment, you pay the total amount. In essence it is not a great deal tax wise for pastors, except they don’t have to come up with a down payment on a home or worry about selling when they leave. But in effect a number of pastors end their career with no place to live. But it is very helpful for beginning pastors. An okay idea. I always thought it would be a good idea for the church to sell the manse to the pastor who in turn would sell it back to the church when they left; everyone would win. The state would get property taxes, the pastor would build up equity, and the church could attract ministers who needed a beginning helping hand. But that’s probably illegal.

But as with all things this system can be abused. Phil Driscoll is an evangelical musician who has second home worth $400,000 which qualifies as a tax-free parsonage. He is not a pastor but after playing with Joe Cocker and having a pop music career he created what he called “the Mighty Horn Ministries.” Or in other words, he’s doing what he’s always done he just calls it ministry now.

Some of you may know Kenneth and Gloria Copeland and their TV ministry based in Texas. They live in an 18,280 square foot lakefront parsonage on 25 acres, valued at $6.2 million dollars.  And then there was Jim and Tammy Faye Baker with their air conditioned dog house as a part of their perks.

Somehow this seems to miss the original intent of the provision. Oh yes, the U.S. Tax court ruled in favor of Phil Driscoll’s parsonage exemption.

Ah the things that are done in the name of evangelism. In these cases this is good news is for the opportunistic sellers of religion, who tend to be very judgmental of those who don’t believe just like they do. I can see a new book, or song coming, “I Was a Con Artist for the Lord.”