Is it proper for a Pastor’s salary increase to be called housing expense to avoid paying taxes on it? Can you give me Scripture, that would indicate that it is OK or not OK to do this?
Remember Jesus’ answer in regard to the payment of taxes? Matthew 22:17-22 says, “Tell us therefore, What thinkest thou? Is it lawful to give tribute unto Caesar, or not? But Jesus perceived their wickedness, and said, Why tempt ye me, ye hypocrites? Show me the tribute money. And they brought unto him a penny. And he saith unto them, Whose is this image and superscription? They say unto him, Caesar’s. Then saith he unto them, RENDER THEREFORE UNTO CAESAR THE THINGS WHICH ARE CAESAR’S; AND UNTO GOD THE THINGS THAT ARE GOD’S. When they had heard these words, they marvelled, and left him, and went their way.”
People have a responsibility to the government and to God. The government is also made up of the citizens of a country, and therefore also has a responsibility to God. One government took at least a part of that seriously. Ezra 7:21-24 says, “And I, even I Artaxerxes the king, do make a decree to all the treasurers which are beyond the river, that whatsoever Ezra the priest, the scribe of the law of the God of heaven, shall require of you, it be done speedily, Unto an hundred talents of silver, and to an hundred measures of wheat, and to an hundred baths of wine, and to an hundred baths of oil, and salt without prescribing how much. Whatsoever is commanded by the God of heaven, let it be diligently done for the house of the God of heaven: for why should there be wrath against the realm of the king and his sons? Also we certify you, THAT TOUCHING ANY OF THE PRIESTS AND LEVITES, singers, porters, Nethinims, OR MINISTERS OF THIS HOUSE OF GOD, IT SHALL NOT BE LAWFUL TO IMPOSE TOLL, TRIBUTE, OR CUSTOM, UPON THEM.”
Praise God when the king has a heart to honor the work of God and His ministers. If the government allows an exemption to a preacher of the gospel, there is nothing wrong with taking it, so long as the government does not try and control the preacher and his message. The government should happily give exemptions for true preachers of the gospel, because when they are doing their job preaching against sin, the government’s job is easier.
You need to check with a tax consultant, but the last that I knew, it was indeed legal for a church to declare part of their Pastor’s support as “Housing Allowance,” (whether or not the amount equals a current raise in support does not matter) providing that all of the legal guidelines are met as to how much can be declared as such. For those guidelines, you need to talk to a tax consultant. There is nothing shady or underhanded about using tax breaks to help out a minister of the gospel. The government should do everything in its power to encourage and help true ministers of the gospel.