- The Washington Times - Saturday, May 4, 2002

Congress made a pre-emptive strike against a federal appeals court this week, with the Senate's passage Thursday of a bill designed to protect a long-standing tax break for clergy.
The measure, which now goes to the White House, clarifies and preserves a tax provision in place since 1921 that exempts ministers and other clergy from paying taxes on housing allowances they receive from their churches.
Supporters say the measure is necessary because the U.S. Court of Appeals for the 9th Circuit is questioning the constitutionality of this tax break.
The House passed the bill 408-0 on April 16 and the Senate followed suit Thursday, passing it by unanimous consent. White House spokeswoman Anne Womack said President Bush supports the bill and plans to sign it.
"Without this legislation, the 81-year-old housing tax exclusion for members of the clergy would be struck down by judicial overreach on the part of America's most activist circuit court," Rep. Jim Ramstad, Minnesota Republican and bill sponsor said. "One misguided court is literally trying to tax our clergy out of house and home."
The long-standing parsonage exemption prevents clergy from being taxed on the portion of their church income that is used to provide housing. The Internal Revenue Service limits the exemption to the fair market rental value of the clergy member's home or parsonage.
The issue began to emerge when the Rev. Richard D. Warren, a Baptist minister in California, challenged the IRS rule that limits the housing-allowance exemption to the fair market rental value of the clergy's home. The U.S. Tax Court sided with the minister, and the IRS appealed the case to the 9th Circuit Court.
But instead of simply addressing the question of whether the IRS has the authority to limit the housing-allowance exemption, the 9th Circuit which spans nine Western states questioned the overall constitutionality of the tax benefit for clergy.
Mr. Ramstad asked the Senate to consider the measure quickly after the House passed it, because he said the court, "had signaled its intent to strike down the clergy housing allowance as early as this month."
An aide to Mr. Ramstad said the court could rule as soon as two weeks from now.
Mr. Ramstad and other supporters estimate that without the tax exemption, the nation's clergy would face a $2.3 billion tax increase.
"As soon as the president signs my bill, the clergy housing allowance will be preserved and our nation's clergy will be protected," he said.

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