[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4156 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4156

    To amend the Internal Revenue Code of 1986 to clarify that the 
 parsonage allowance exclusion is limited to the fair rental value of 
                             the property.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 10, 2002

   Mr. Ramstad (for himself, Mr. Pomeroy, Mr. Crane, Mr. Herger, Mr. 
McCrery, Mr. Nussle, Mr. Sam Johnson of Texas, Mr. Hayworth, Mr. Foley, 
 Mr. Blunt, Mr. Cox, Mr. Mica, Mr. Wamp, Mr. Kennedy of Minnesota, and 
Mr. Chambliss) introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to clarify that the 
 parsonage allowance exclusion is limited to the fair rental value of 
                             the property.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clergy Housing Allowance 
Clarification Act of 2002''.

SEC. 2. FINDINGS, PURPOSES, AND CONSTRUCTION.

    (a) Purposes.--Section 107 of the Internal Revenue Code of 1986, 
and the amendments made by this Act, are intended, among other 
purposes, to--
            (1) further the tax policy of encouraging home ownership 
        and providing tax preferences for housing;
            (2) accommodate clergy in denominations that require as 
        part of their ministry that they locate to specific communities 
        for such periods of time as designated by their denomination, 
        and whose denominations may provide housing or housing 
        allowances;
            (3) minimize government intrusion into internal church 
        operations and the relationship between a church and its 
        clergy;
            (4) accommodate the differing governance structures, 
        practices, traditions, and other characteristics of churches 
        through tax policies that strive to be neutral with respect to 
        such differences;
            (5) recognize that clergy frequently are required to use 
        their homes for purposes that would otherwise qualify for 
        favorable tax treatment, but which may require more intrusive 
        inquiries by the government into the relationship between 
        clergy and their respective churches with respect to activities 
        that are inherently religious; and
            (6) minimize controversies between clergy and the Internal 
        Revenue Service by clarifying the extent to which a parsonage 
        or a housing allowance is not considered gross income for 
        Federal income tax purposes.
    (b) Construction.--Nothing in this Act shall be construed to 
reverse or modify any regulation, revenue ruling, or other guidance 
that was issued by the Internal Revenue Service prior to the date of 
enactment of this Act, except with respect to the effective date of the 
fair market value limitation added to section 107 of the Internal 
Revenue Code of 1986 by this Act.
    (c) Finding.--Congress finds that it would be appropriate and 
consistent with the purposes of this Act and the general administration 
of the Federal tax laws for the Internal Revenue Service to provide 
additional guidance with respect to fair market valuation 
determinations in order to minimize disputes regarding valuation under 
section 107 of the Internal Revenue Code of 1986.

SEC. 3. CLARIFICATION OF PARSONAGE ALLOWANCE EXCLUSION.

    (a) In General.--Section 107 of the Internal Revenue Code of 1986 
is amended by inserting before the period at the end of paragraph (2) 
``and to the extent such allowance does not exceed the fair rental 
value of the home, including furnishings and appurtenances such as a 
garage, plus the cost of utilities''.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to--
                    (A) taxable years beginning after December 31, 
                2000, and
                    (B) taxable years beginning before January 1, 2001, 
                with respect to taxpayers who filed a return before 
                April 10, 2002, for such taxable year limiting the 
                exclusion under section 107 of the Internal Revenue 
                Code of 1986 as provided in such amendment.
            (2) Waiver of interest and penalties.--In the case of a 
        taxable year beginning after December 31, 2000, no penalty, 
        addition to tax, or interest shall be imposed by reason of the 
        amendment made by subsection (a) with respect to any return 
        filed before the date of the enactment of this Act if an 
        amended return is filed within 90 days after such date of 
        enactment that limits the exclusion under section 107 of such 
        Code in accordance with the amendment made by this section.
            (3) Years before 2001.--Except as provided in paragraph 
        (1)(B), notwithstanding any prior regulation, revenue ruling, 
        or other guidance issued by the Internal Revenue Service, no 
        person shall be subject to the limitations added to section 107 
        of such Code by this Act for any taxable year beginning before 
        January 1, 2001.
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