I'd guess that most SBC clergy, folks who have been known to lay awake at night worrying about a ten dollar bill, are keenly aware of and take advantage of this break. Actually, it's a double break in some cases, since the minister gets a deduction on the interest paid on a mortgage and he gets to deduct that a second time because the part of his compensation used to make those payments is paid as a housing allowance, not taxable as income or included in his W-2.
We don't write tax laws. We certainly need not feel guilty for doing what the law allows. I'm all for paying only the tax I owe and not for paying a dime of tax that I don't owe.
But it may surprise folks to understand that if the minister has two homes, he can even use his vacation home in the mountains or at the beach for the tax break.
Megapastors, Christian music rock stars, and televangelists take notice. You don't have to squeeze your membership or viewers for so much money. Poor taxpaying saps can subsidize your multi-million dollar beach condo.
Phil Driscoll, trumpeter (earlier jailed for tax evasion) can be thanked, or blamed, for that. The case is here. The summary below is from the Georgia Baptist Convention:
Phil Driscoll owns two homes. One in Cleveland Tennessee and a lake home outside of Cleveland Tennessee. Phil Driscoll is an ordained gospel minister. Phil Driscoll Ministries paid for both homes and it was excluded from his income under the Pastor's Housing allowance under Section 107 of the Internal Revenue Code of 1986. The IRS felt that to be a bit greedy and assessed him with additional income and fraud penalties.
Rev. Driscoll took the IRS to tax Court. The IRS argued that the use of the word "home" in Section 107 refers only to one home. Rev. Driscoll countered that in Section 7701(m) the Code provides that singular may include plural. Further, the legislative history did not forbid that interpretation. For those reasons the Tax Court ruled in Driscoll, et ux v. Commissioner, 135 TC 27 (2010) that both houses were homes for the purposes of Section 107 and both could be excluded from income.
This double tax break when expanded to multiple homes, cannot possibly be justified and surely some legislative watchdog will push to amend or repeal it. One can hardly object to that.
What a great country! Some high flying ordained ministers get to have taxpayers subsidize their second homes. We may one day lose this tax break (it isn't exclusive to clergy, military receive it as well) because of how it has been greedily applied.