Do preachers have to pay taxes? Are all employees of a church exempt from income taxes?

[AnArmyVeteran]

Or is everything associated with a church exempt from any federal or state taxes? If preachers and televangelists are getting paid huge amounts of tax free money that sounds wrong to me.

I believe any church that even mentions something close to being political they should have their tax exempt status removed and be forced to pay taxes. But fundamentalist churches regularly handed out voter's guides telling their flocks how to vote. Of course, all they had to do was tell them all to vote straight party tickets because they always blindly supported right wing conservative republican candidates. All a candidate has to do is say the magic words 'born again' and fundamentalists will all vote for them. It doesn't matter if they are incompetent, stupid or even just released from prison. Fundamentalists must go into a religious stupor when they hear someone say they are 'born again'. That's why fundamentalists are so fascinated by the likes of people like Palin or Bush.

I remember the Mormon church getting into trouble years ago. They didn't allow blacks to be members of the priesthood (as they did all white men) and just when their church was about to lose tax exempt status the leader of their church, called the "President", had a revelation from 'god' saying it was okay for blacks to be members of the priesthood and that it was a big misunderstanding. God told him something like, "Of course it's okay to have blacks as priesthood members.".

I thought it was very convenient timing for the president to have a supposed 'revelation' at the same time the government was sending them a letter to revoke their tax exempt status. The only 'revelation' that occurred was the revelation about how the church was practicing discrimination against blacks and by doing so they would lose their tax exempt status. It would take someone with unlimited gullibility to believe god intervened and spoke to the president of the Mormon church. But the Mormon flock believed this nonsense...

[ProdigalJunkMail]

1. you get paid...you get taxed

employees (including the pastor) are not exempt...

sP

[AnArmyVeteran]

13. But as one person noted, they can live in tax free houses (or mansions)

If they live in a house the church paid for doesn't he have to pay the same tax rate as someone who lived in a similar valued piece of property? If it would cost a preacher $1000 a month to live in a comparable apartment or house, shouldn't he have to pay taxes on that as income? Or is it just another way to avoid paying taxes?

I am a minister of the Universal Life Church. It cost $3 for my credentials. And yes, it's legal. I am a legitimate minister and can legally marry people, among other official duties and the state will recognize me as a bona fide minister. There's nothing to stop me from turning my house into a 'church' and avoiding paying any property taxes. My 'church' would be as legitimate as any other religion and at least my church wouldn't be filled with child predators.

BTW, my Dad became a bishop in the same church by paying $5 more!. We're a very religious family. Wherever two or more of us were gathered, that was a church, even if we were sitting in a bar drinking margaritas. :)

Oh yeah,
Amen, and amen...

[wolfgangmo]

23. You need a minimum number of members, from more than one dwelling.

And you need to hold regular religious celebration or worship activities.

If it's just you and dad, well....... you are shit out of luck.

[AnArmyVeteran]

27. No, me, my Dad and 10 of his wino friends ought to do... We've been working on a catchy logo...

[GreenStormCloud]

2. Yes, preachers pay income taxes, just like everybody else.

And social security tax, and medicare tax, and personal property tax, and resl estate tax, and sales tax, and tax on their car. And he can express polical opinions and campaign for candidates and even run for office, just he is not supposed to involve the church in any of those activities.

[AnArmyVeteran]

3. But preachers & churches regularly hand out voter's guides, violating the law.

[LiberalLoner]

6. My sister, a Lutheran Pastor, is part of a group pushing to tax churcches if they

misbehave in that way. Not all churches approve of that behavior. :)

Nice to see you, dear friend. :)

[AnArmyVeteran]

12. Good for your sister! She sounds as amazing as 'you' :)

Some people have great moral compasses that drive their actions. Far too many churches are fronts for money gathering schemes to fleece their faithful flocks. I applaud your sister, especially because she is a pastor. Her moral compass is pointed in the right direction.

Always nice to see 'you'...

YASBTM!

[hfojvt]

7. it's not against the law

if their voter guide is "issue specific" rather than "party (or candidate) specific". This is true even if their issue specific guide tends to lean towards one party. They can say "vote for the pro-life candidate" or "vote for the candidate who defends marriage" and still be legal but they cannot say "vote for the Republican" or "vote for Schwarzenegger".

[MajorChode]

5. Not exactly

Many churches furnish their clergy with a home and a vehicle and provide them with many other tax deductable expenses. There's lots of tax loopholes for clergy.

[LiberalLoner]

25. True. A parsonage is standard in ELCA congregations at least n/t

[SPedigrees]

4. It is church (real) property that is tax exempt.

This exemption should be abolished IMO.

[Dappleganger]

10. I AGREE

First Baptist Church of Jacksonville sits downtown on some of the THE most prime real estate in the area. They encompass a number of buildings in that location. All tax-free. This means money which our city DESPERATELY NEEDS is not being paid into the city coffers for services being cut daily.

What is even worse, four of the COJ council members are also long-standing members of First Baptist and in my opinion is a huge conflict of interest. REmember the asshole who demanded that Dr. Ahmed, the recently elected human rights commissioner in this city who's a muslim, say a prayer out loud to embarrass him? That was Mr. Redman, a deacon at First Baptist downtown and city council member.

This shit has got to stop.

[AnArmyVeteran]

14. How I won against the churches in my town, using baseball

I managed and played for a baseball team several years ago. The name of my team was the "Mad Dogs". If you saw my teammates you would understand why I chose that name. They were great guys, but they were like the Hanson Brothers in the movie, "Slap Shot", except unlike the movie, I had twelve of them on my team. I lost count of all the bench-emptying brawls they were involved in. When you combine booze and adrenaline it is a very explosive cocktail.

We were a great team and often won league titles and we also played in many state tournaments. But one year I went to a city facility to sign my team up for the next season. But just as I got to the window I was told the league was full. I noticed another window still open and accepting teams and asked what that line of people was. They told me that was for the church league. I immediately went to that line and when I got to the front desk I told them I wanted my team to play in the church league. They asked me what the name of my church was and I told them the "Universal Life Church". I also told them I was the minister of the church, which was true. I pulled a card showing I was a minister from my wallet and showed it to them. The city accepted my application and my team was admitted into the church league.

I didn't deceive anyone to get into the church league. A couple of years earlier my dad talked me into becoming a minister in the Universal Life Church, a 'church' where anyone can become an ordained minister for three bucks. My church was as legitimate as all the other churches in the league. There were Baptists, Methodists, Catholics and even a couple of really fundamentalist churches. The 'mother church' for the Universal Life Church was in Modesto, California. It was our 'Vatican'. Oh yeah, as soon as I became a reverend, my Dad was rewarded by the church by being elevated to the title of 'Bishop'. He was so proud to progress so far up in the church.

When the season began and we played our first game the opponents from other churches would ask where our church was. I already met with my team to prepare them to play in the church league and how to respond to any questions they might face. I told them if anyone asked where our church was I told them to answer, "Wherever two or more of us are gathered". Hey, that's right out of the Bible so I thought what was good enough for Jesus, was good enough for our 'church'.

You should have seen the reactions from our opponent churches when I quoted Jesus' interpretation of a 'church'. They became very arrogant, aloof and confrontational because they believed churches should all be brick and mortar buildings, even though my team's 'church' was everywhere, just as Jesus envisioned. They also looked at us as lesser human beings because we didn't have a location where we performed our 'services'. But we were a very flexible flock because we held our services in topless bars, hockey games and rock concerts.

But I did have lots of parties at my house which all my team members came to. I jokingly told them that every time we met it was a church service and often thought I could legitimately get my house exempted from paying property taxes by claiming it as a place of worship. But I never took that step, but it would have been as legitimate as any other church.

Although I often demanded the respect of a 'man of the cloth' as their minister, my teammates usually just gave me another beer. A humorous side note: I had twelve people on my team, not including myself. I used to jokingly call them my disciples, but instead of "Mark", "Luke", "Matthew" or "John", I had "Moose", "Rick the Stick", "Stan the Man", "Clark the Spark" and "Rocky".

I mention the above true story because everyone on my team payed taxes and all the city fields were paid for using our taxes. Not one dime came from any of the churches in our league. I didn't think that was fair, so that's why I signed up to play in the church league to play on fields paid for by tax dollars. Not a dime of the tithing money from church members were used to build the fields we played on. I thought if they wanted to play in a league, they should use their own church fields, and not my city, tax funded fields.

I don't believe churches should be tax exempt. Most are for-profit organizations anyway. And every time I drive by one I think about the enormous costs to build all the grandiose structures. In my opinion, if a church is going to be built it should be very plain, just four walls and a roof. I find it hypocritical how Christians want to congregate in a huge, gaudy buildings costing millions, when all of that money should be used to feed and clothe the members of the churches who are poor and needy. I think it's sad how so many church members seem so eager to entrap themselves in extravagance, rather than have their focus on the true teachings of Jesus.

My baseball team was full of guys who drank and some even smoked pot before the games, but at least they were more honest than the people we played against. And not once did any of my team members talk down to any of our church team opponents, but we were constantly attacked by so-called 'Christians'.

There are hundreds of churches in the medium-size town I live in. Every time I drive by a church their parking lots are almost empty. But even so, new churches keep getting built. I believe no new church should be built until they can fill the ones they already have. Just maybe if they lost their tax exempt status they would begin to be more frugal and start to think about the important things in life, rather than the pomp and circumstance associated with their churches and their services.

One more thing: If we can't take away the tax exempt status of churches, we should at least force them to give a specific portion of their proceeds to the poor, the needy and the sick. The new health care reform bill requires insurance companies to use 80-85% of the money they take in to actually go toward the healing of human beings. Why is it so low? Why just 85%? Why not 100%? If we eliminated the middle men look how many more resources could be used to help those who truly need help? And I consider most churches to be like middle men, taking at least 10% from people, and giving back very little. I believe anything a church spends on extravagant items to entice people into their churches should be taxed at 100% to stop the misuse of funds they get from well meaning members.

[SPedigrees]

22. That's a great true story, and hilarious in the telling.

One of the first religions in this country was the Quakers, and they meet traditionally in each other's homes. I doubt very much they claim their houses as churches, although they are by your (and Jesus') definition.

Good for you for using the church league's own rules against them.

[wolfgangmo]

24. Good story.

FYI - that 15% that health insurance companies "get" to keep (let's see how many loopholes they find to NOT pay) is more than twice what the next highest overhead costs of any other industrialized nation. Canada, next highest on the planet, comes in at 7% adminsitrative overhead.

I think you should incorporate as a church. But I don't think you can with the church you are a pastor in. Check with the IRS. I'd attend.

[AnArmyVeteran]

26. Thanks Wofgangmo, and welcome to my flock :)

But no attendance is required to be a faithful member of my flock. All it takes are regular, weekly donations of a paltry $50 in love offerings and have your will changed to leave all of your estate to my church. I learned a lot by watching how the televangelists operate.

Again, welcome to my flock. BTW, if you want to start your own church contact the Universal Life Church. Their equivalent to the Vatican, or their 'mother church' is in Modesto, California. It used to cost $3 to get a certificate of ministership. It might be higher now, since they tightened the requirements to become a minister. You can also become a bishop or get all kinds of legal certificates that the state has to recognize, just because it's a church.

I wonder if Ebay has pews for sale? I could turn one of my bedrooms into a cozy little chapel. Or I could just hold my services at a local biker bar.

Thanks for your nice comments too!

[Name removed]

8. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[MindPilot]

9. The pastor gets a "parsonage exemption".

Tax law that allows clergy pay to be divided into two separate categories: salary plus housing and utility allowance. The latter amount is excluded from federal tax. This applies even if the mega-church pastor's house is a mega mansion.

There are no real guidelines on how that can be split so 90% could be housing & utility allowance and 10% salary. Additionally the property taxes and mortgage interest are also still deductible so Rick Warren gets to pay for his multi-million dollar estate deducting expenses paid for with tax-exempt income.

[AnArmyVeteran]

11. Wouldn't it be refreshing to see a limit on housing to the size of "Jesus' house"?

Of course, Jesus' house was wherever two or more were gathered, so that meant anywhere, even under a tree.

Restricting the non-taxable size of the residence of a preacher would eliminate the multi-million dollar mansions some preachers live in. If they were true believers in Jesus, they wouldn't have a lust for possessions in the first place. They would do what Jesus did and live under trees. But just like Diogenes trying to find a honest man in ancient Athens, I haven't seen one preacher who truly walks in Jesus' shoes. I am not condemning Christianity or all preachers. I know most preachers who are good, decent people, but no better than a non-Christian or someone who doesn't belong to any religion. I do find it offensive how some predatory preachers, usually televangelists, will take the last dime from the poorest in their flocks, while living in mansions and driving luxury cars. I don't see how any preacher could take millions from their congregations for personal benefit. I recall a Dallas preacher who had his congregation send him 'prayer requests' with donations. The envelopes were opened, checks removed and the letters were found in a dumpster behind the church, unread and ignored. All of those people who were in pain, had devastating losses and were vulnerable were victimized by a predatory church. Taking advantage of the vulnerable is pure evil...

[Solomon]

15. I used to sue bad ministers who would not leave their churches

after being voted out. A lot of them played games with taxes. One trick they used was to collect what they called "love offerings" to supplement, or in lieu of salary. Until the IRS caught up with this trick, they paid no taxes on the weekly "love offerings."

[AnArmyVeteran]

17. You can't tax love (yet) but you can tax offerings...

But for clarification: If you went to a brothel in Nevada I'm sure you'd pay taxes on that 'love' though.

[earth mom]

16. Tax exemption for churches is bullshit. Tax em all to the max!

:grr:

[Xithras]

18. Well, theres a common mistake in your reasoning.

Here's the fundamental problem:

The United States government is prohibited, under the Contitution, from passing laws about religion and churches. The "Wall of Seperation" that Jefferson talked about went two ways...churches can't get into the government, and government can't get into the churches. There were several lawsuits over this in the early days, and the courts always held the same position...religion cannot be "freely exercised" if you have to pay the government for the right to do so.

What this lead to, predictably, was 150 years of every yahoo with a Bible and three followers claiming to be a church, and every farmer claiming that his crop was "for God". 150 years of lawsuits over what was, and was not, exempted from taxation.

In the 1950's Lyndon Johnson introduced a bill that created the 501c3. That bill laid out rules for churches, and a simple promise...follow these rules, and we'll never challenge your tax exemptions. Most churches had no problems with the rules, and many had experienced skirmishes with the IRS over their tax exempt status in the past, so it was seen as an easy solution.

So here's the rub. Johnsons 1950's law doesn't override the Constitution or previous court orders, and there is nothing in the Constitution prohibiting churches from practicing politics. If you revoke the 501c3 status of a church, that doesn't mean that they automatically begin paying taxes. It ONLY means that the church will again be auditable by the IRS and courts to determine whether they are genuinely a religious organization, or whether they are a political (or business, or social) organization simply attempting to mask their operations under the guise of religion. A genuine church, practicing only religious activities that occasionally delivers political messages to its congregation, will NOT pay taxes on income even if its 501c3 status is revoked. If they are found to be spending large sums of money to push political causes, the worst they would face is a tax bill on the portion of their earnings spent for non religious/church activities.

It should be pointed out that there are MANY churches in the U.S. today that are NOT 501c3 registrants for philosophical and religious reasons. None of them pay taxes either.

Implementing a full income tax on churches would require either a Constitutional amendment, or a Supreme Court decision overturning previous precedent.

[AnArmyVeteran]

21. Thanks Xithras for a great post and clarifications. Great job!

[Goblinmonger]

19. I believe they can opt out of deductions

from their salary for Social Security. Of course, they don't get Social Security when they retire.

[mitchum]

20. I always try to get the anti-tax nuts to turn their ire on the grifters using the holy tax dodge