Unless you are a member of the clergy or involved with the finances of a church or temple, you probably don’t know that since 1921 the federal government has subsidized a congregation’s remuneration of its pastor. This happens through the extension of a housing or “parsonage allowance” that makes it possible for an ordained member of the clergy to live “tax-free in a home owned by his or her religious organization or receive a tax-free annual payment to buy or rent a home if the congregation approves.” Originally, this was meant as a way of helping “minimize taxes on clergy members, whose compensation was often meager.”
Recent court cases have extended “the parsonage allowance to an unlimited number of homes, which may be owned either by the religious organization or the clergy member. However unintentionally, in doing this the courts may have opened “the door for the allowance to be applied to multiple homes used by leaders of wealthier ministries.” Among those concerned about the possibility that this will lead to abuse or an unjust situation is Senate Finance Committee member Sen. Charles Grassley (R., Iowa). "It's fair to question,” he says “why a clergy member needs a tax-free allowance for more than one home, and whether tax-exempt churches should subsidize millionaire ministers” (Tax Break for Clergy Questioned).
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