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IRC 107 to be tested?

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  • rlbaty50
    Here s a summary of Chemerinsky s brief that was filed in the Warren case. It might be some indication of where he plans to go if he gets around to filing his
    Message 1 of 1 , Dec 4, 2002
      Here's a summary of Chemerinsky's brief that was filed in the Warren
      case. It might be some indication of where he plans to go if he gets
      around to filing his own stand-alone suit, as promised, in the coming
      months.

      IRC Section 107 is the law that is the basis of Revenue Ruling 70-
      549. The problem is that section 107 was not intended to provide
      benefits to employees who were not employed by "integral agencies" of
      the church. With such abuse as is represented by Revenue Ruling 70-
      549 and the issue in the Warren case, it is not suprising that folks
      like Chemerinsky would take the opportunity to attempt a
      constitutional challenge to the law itself.

      Sincerely,
      Robert Baty

      ###############################

      Code Section: Section 107 -- Rental Value of Parsonage
      Author: Chemerinsky, Erwin
      Institutional Author: University of Southern California Law School
      Citations: Richard D. Warren, et ux. v. Commissioner; No. 00-71217 (3
      May 2002)

      Amicus Argues Parsonage Exemption Violates the Establishment Clause
      In an amicus curiae brief for the Ninth Circuit, Professor Erwin
      Chemerinsky has argued that the parsonage exemption of section 107
      violates the Establishment Clause by according "ministers of the
      gospel" a benefit available to no others.

      =============== SUMMARY ===============

      In an amicus curiae brief for the Ninth Circuit, Professor Erwin
      Chemerinsky has argued that the parsonage exemption of section 107
      violates the Establishment Clause by according "ministers of the
      gospel" a benefit available to no others. Richard Warren served as an
      ordained minister of a church and wrote several religious books in
      1993-1995. The church gave Richard a housing allowance and
      compensation, which he used to provide a home for himself and his
      family. Richard filed joint returns with his wife, Elizabeth,
      excluding the amounts used to provide a home from income under
      section 107(2). The IRS determined deficiencies, finding that the
      amount excluded from income exceeded the fair rental value (FRV) of
      the house.

      The Tax Court held that under section 107(2), Richard may exclude
      from income amounts spent providing himself with a home. The court
      found that the exclusion isn't limited to the FRV; rather, it applies
      to a rental allowance to the extent used to provide a home. The court
      noted that the statute clearly provided a different measure for the
      exclusion under section 107(2) than under 107(1). The court dismissed
      the IRS's arguments that its position prevents unequal treatment
      between ministers for whom housing is provided and those receiving a
      rental allowance. Richard D. Warren, et ux. v. Commissioner, 114 T.C.
      No. 23 (For a summary, see Tax Notes, May 22, 2000, p. 1103; for the
      full text, see Doc 2000-13875 (18 original pages) or 2000 TNT 96-8 .)

      The Ninth Circuit subsequently appointed Professor Erwin Chemerinsky
      of the University of Southern California Law School to serve as
      amicus curiae and requested supplemental briefs on the
      constitutionality of the parsonage allowance exclusion from all
      parties. (For a summary, see Tax Notes, Mar. 11, 2002, p. 1306; for
      the full text, see Doc 2002-5526 (10 original pages) [PDF]or 2002 TNT
      44- 12 .)

      Chemerinsky argues that under controlling Supreme Court precedents
      the parsonage exemption clearly violates the Establishment Clause. He
      further insists that the parsonage exemption is unconstitutional
      under any theory of the Establishment Clause, including the test of
      Lemon v. Kurtzman, 403 U.S. 602(1971) and the neutrality test favored
      by some Justices on the Supreme Court. Chemerinsky further maintains
      that the parsonage exemption is an impermissible government
      endorsement for religion. Finally, Chemerinsky emphasizes that the
      Ninth Circuit does have the authority to consider the
      constitutionality of section 107(2), despite the fact that this issue
      has not been presented by the parties to the litigation.
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