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The Clergy Housing Allowance Clarification Act of 2002

Signed into law by the President on May 20, 2002

Article summary. A new law amends the tax code to limit the nontaxable amount of a housing allowance for ministers who own their home to the annual "fair rental value" of the home. This legislation was designed to bring an end to the "Warren case," in which the Tax Court had ruled two years ago that a 1971 IRS ruling imposing the "fair rental value" limit to ministers' housing allowances was an unwarranted interpretation of the tax code. The IRS appealed this ruling to a federal appeals court. In a preliminary order, the court indicated that it was going to rule that the housing allowance violates the first amendment's nonestablishment of religion clause. In response, Congress enacted the Clergy Housing Allowance Clarification Act to resolve the appeal of the Warren case. This article reviews the background of ...

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Posted:
  • July 1, 2002

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