After months of investigating tax loopholes that benefit businesses at the expense of taxpayers for its Unfair Burden article series, the Houston Chronicle turned its attention to church parsonages, which are mostly tax-exempt in Texas.
- “The state’s most populous counties identified 2,683 parsonages worth about $1 billion, costing other residents who must fund school districts and local governments $16 million every year.”
- “There is no dollar limit to a parsonage’s tax exemption. At least 28 of the clergy residences were worth more than $1 million.”
- “Across Texas’ largest counties, the Chronicle identified more than 30 parsonages for which appraisers had granted the 100 percent tax break even though they exceed the law’s 1-acre limit.”
In May, Houston Chronicle investigative reporter Jay Root contacted Trinity Foundation for assistance on the article series. It was a learning experience for all involved. The main one Trinity Foundation helped with was the fourth in their series, focusing in on Kenneth Copeland’s parsonage and organization.
The Houston Chronicle submitted Open Records requests to Texas county appraisal districts, examined state tax code requirements to be recognized as a parsonage, and interviewed county appraisers after identifying parsonages that violated state law by covering more than one acre of land.
Staff photographers drove across the state taking pictures of parsonages. As a result, the Houston Chronicle has produced some of the best religion news coverage of 2021.
Understanding the Problem
The Texas tax code, which is 1,891 pages long, does not place a limit on the number of parsonages a church may own or the size of the tax exemption, on mansions in particular.
The Houston Chronicle investigation revealed that Highland Park Presbyterian Church in Dallas “had the most parsonages of any single house of worship — 11 as of the start of the year. And it has knocked more value off the tax rolls from clergy residences, about $15 million to $20 million last year, than any other church.”
Kenneth Copeland’s 18,279-foot parsonage, let’s call it a mansion, received additional criticism. “Copeland’s church gets a pass on what would otherwise be an annual property tax bill exceeding $150,000 — money that other local taxpayers must backfill to cover the cost of schools, police and firefighters.”
Curiously, in 2021 the mansion’s appraisal dropped by more almost $4 million.
(Photo: Property data from Tarrant Appraisal District for Copeland’s parsonage. Tarrant County covers the Fort Worth area and is home to televangelists Kenneth Copeland, Robert Morris, James Robison and Joni Lamb.)
Trinity Foundation President Pete Evans told the Houston Chronicle, “The law was never intended to give breaks to millionaires and multimillionaires.”
In 2007, Senator Charles Grassley launched a public inquiry into six TV ministries’ for alleged abuses of the tax code and submitted a long list of financial questions for the Copelands. The Senate Finance Committee summarized the Copelands’ response in a public report:
“The Church informed Senator Grassley that the Church provides a parsonage to Revs. Kenneth and Gloria Copeland and a housing allowance to Rev. John Copeland. The Church further explained to the Senator that the Church’s independent Compensation Committee takes into account the fair rental value of the parsonage or housing allowance provided to these individuals when it determines whether the overall compensation it pays to them is reasonable.”
Last year Trinity Foundation reported, “Copeland, not his church, owns his second home, a vacation home in the Rocky Mountains and is unlikely to receive a housing allowance for this second home.”
The Houston Chronicle compiled a list of ten recommendations to deal with the parsonage problems. As an example, one idea was to limit the dollar amount of the parsonage tax-exemption. “In Maine, religious organizations can claim only $20,000 of a clergy residence as tax free; the remaining value is taxed at regular local rates.”
Another suggestion was to allow the Texas Attorney General to litigate parsonage court cases. Currently, county appraisal districts are unable to recover legal costs even when they win such a lawsuit.
Such a legal change could serve as a deterrent to people falsely claiming to operate churches for tax exemptions. One such case Trinity Foundation monitored arose a decade ago.
In Illinois, millionaire George Michael (real estate agent, not the famous singer), claimed his house was a church to avoid property taxes. The county claimed he owed $225,000. Eventually the county was victorious in court.
ABC News reported, “One state judge has called Michael’s tax exemption application ‘a sham,’ arguing that Michael’s professed faith — the Armenian Orthodox religion — is at odds with the church that licensed him online, the Church of Spiritual Humanism.”
While Houston Chronicle requires a subscription to read the five articles linked below, they may be accessed through Newsbank, a database often available through local library websites, but requiring a library card.
- Some Texas religious leaders live in lavish, tax-free estates thanks to obscure law
- These Texas church homes are too big for a state tax break, but you’re still paying for them
- This wealthy Dallas church owns the most clergy homes in Texas — and it costs taxpayers six figures a year
- Kenneth Copeland is the wealthiest pastor in America. So why does he live in a tax-free Texas mansion?
- Texas could save taxpayers thousands by closing loopholes for clergy homes. Here’s how.
Trinity Foundation is continuing to investigate clergy parsonages and related properties. There is another scandalous tax exemption which we plan to expose in a future article.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.