RANDy, Minister Tax-Deduction Case?

[Venus]

I thought I heard a quick blurb today that the church won in the case (I forget the case title) about the ministers and the IRS either charging use of the parsonage as income......or else it was something that they should be able to deduct that the IRS challenged (or do I have two cases mixed together?).

I seem to recall that you were following the parsonage case.

What happened, if you know?

[The_RANDy_Corporation]

In response the Congress passed an amendment to the tax code to pre-empt the left coast legal action and it was unanimous or nearly so. The President signed it into law and we all declared victory. That's the last I heard and that's been about 3 months ago I'd guess.

[Venus]

Yes, I recall that, but I was speaking of a court decision on this of some sort that came down yesterday.

If I see/hear about it, I'll post. Folks were pretty interested and up in arms about this when it was discussed here before.

[The_RANDy_Corporation]

Yes, please post. I haven't heard anything but I've been out of cirrculation a bit.

[Venus]

Attorney Buttinski Chemerinsky <u>struck</u> (http://www.christianitytoday.com/ct/2002/133/33.0.html) again. Here's what happened, according to Ted Olsen:

Weblog: Parsonage Exemption Case Dimissed, But May Return
Plus: The walls come a-tumblin' down? And other stories from around the world.
Compiled by Ted Olsen | posted 08/28/2002


Ninth Circuit Court of Appeals dismisses parsonage tax case three months after settlement
Shortly before the Pledge of Allegiance case, the U.S. 9th Circuit Court of Appeals was drawing fire from religious leaders for suggesting that pastors' tax deductions for housing might be an unconstitutional state endorsement of religion.

The court's action was particularly galling because the IRS and Saddleback Community Church pastor Rick Warren had largely settled their differences and both agreed that the exemption was constitutional. Nevertheless, the court asked University of Southern California law professor Erwin Chemerinsky to write a brief on the deduction's constitutionality.

Congress didn't care much about Chemerinsky's interpretation, and instead passed a law quickly and unanimously clarifying the tax code on the issue.

With the new law in place, the IRS and Warren asked the court to dismiss the case. But having been drawn into the case, Chemerinsky didn't want to let go. He filed an opposition to the dismissal, then filed a motion to intervene as a private taxpayer.

Here's Ted's description of the events <u>prior to the dismissal</u> (http://www.christianitytoday.com/ct/2002/006/24.16.html):

Parsonage in Peril
Congress protects tax exemption.
By Ted Olsen | posted 05/13/2002


It began with a $20,000 difference between what the IRS and megachurch pastor Rick Warren thought he could deduct for his parsonage. It could end with clergy and churches around the country spending an extra $500 million a year in taxes. Warren, pastor of the 18,000-member Saddleback Community Church, deducted $79,999 for his actual housing costs in 1995. The IRS challenged the deduction, saying the fair market value of the home was only $59,479.

The dispute continued through the courts until appellate court judge Stephen Reinhardt dropped a bombshell March 5: "It is possible that any tax deduction that Rev. Warren receives [for the parsonage] would constitute an unconstitutional windfall at the public's expense."