On Friday a federal judge ruled that an IRS exemption that gives clergy tax-free housing allowances is unconstitutional. The exemption applies to an estimated 44,000 ministers, priests, rabbis, imams and others. If the ruling stands, some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.
Aside from the question of constitutionality, the clergy exemption raises a question that many people — whether religious or not — are likely to be wondering: Why exactly do ministers receive a tax exemption for their housing allowance?
At the website of the Ethics and Religious Liberty Commission, I explain the historical, legal, and ecclesiological reasons for allowing the exemption and why it’s an issue of religious freedom: