Preachers Discover that IRS is Watching

Real Preachers Of LA Just Discovered That The IRS Was Also Watching: New Lawsuits Challenging Tax Exemptions For Pastors

When the show Real Preachers of L.A. first took to the air the ratings for the show were off the charts, some would even say it set records for Gospel Programing. As Believers tuned in to watch the Pastors flaunt their lavish lifestyles two other unexpected groups also tuned in, the Internal Revenue Service and the Freedom From Religion Groups.

During the first season of the Preachers of L.A. fans of the show received unprecedented access to the lifestyles of pastors like Bishop Noel Jones as the show captured his extravagant homes, and luxury cars, all of which were Tax Free. The Pastors even boasted about living the lifestyle of Rap Stars, but there is one major issue with that comparison, Rap Stars like Jay-Z pay millions of dollars in Taxes.

The Real Preachers of L.A. really did all of the hard investigative work for Transparency Groups and Atheist Organization, who would like to see an end to the free lunch Pastors have enjoyed. While the Pastors were cruising through poor neighborhoods in their Bentleys, their actions and possessions were also being gathered as evidence. The flamboyancy of the same Pastors will soon play out in another daytime drama but not in front of Judge Judy in some scripted People’s Court episode, this time all of the rulings will be real and life changing.

The first blow to the life style of rich pastors came last November when U.S. District Judge Barbara Crabb ruled in favor of a lawsuit filed by the Madison-based Freedom From Religion Foundation, which claimed that clergy members have an unfair advantage in receiving untaxed income to pay for rental housing or home ownership and property taxes.

The second blow came earlier this week when the same court issued another ruling that would allow a lawsuit that could force all pastors to report every dime they receive or face prison time for tax evasion. The day of Pastors having members line up to give a $500 Love Offering could soon see a young lady at the end of that line with a Wal-Mart like cash register, to track the taxes owed to the Internal Revenue Service.The only hope that your Pastor can keep his 18k sq foot home tax free is a pending appeal that will be heard by the 7th Circuit U.S. Court of Appeals in Chicago. The appeal comes as no surprise, said Annie Laurie Gaylor, co-president of the Freedom From Religion Foundation.

“We knew this was going to happen,” Gaylor said. “We have formulated this case to go up to the Supreme Court, so an appeal was inevitable. It’s a very strong case. We’re right. I think everyone knows we’re right. If reason prevails and the Constitution prevails, we will prevail.” Crabb, a judge in U.S. District Court for the Western District of Wisconsin, wrote in her decision that the housing allowance was a boon to ministers. The exemption was estimated to have saved clergy members $2.3 billion in taxes from 2002-2007. The exemption “provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise,” Crabb wrote.

Gaylor cited a study by Christianity Today magazine that found 84 percent of senior pastors receive a housing allowance from $20,000 to $38,000 a year in added salary that is not reported or taxed. That money can be used not just to pay for rent or a mortgage, but also for home maintenance and repairs.