Washington (May 22, 2002) -- President Bush has signed into law a bill protecting the housing tax break enjoyed by ministers, priests and rabbis.

The bill clarifies that parsonage allowances are limited to the fair market rental value of the residence. Sen. Chuck Grassley, ranking member of the Committee on Finance, was the lead co-sponsor of this bill in the Senate.

"I appreciate the President's quick action," Grassley said. "Without this bill, congregations nationwide would have suffered needlessly. Ministers, priests and rabbis work hard for low pay. They depend on their church or synagogue to help with their housing costs. This is especially important in rural areas, where very small congregations have trouble attracting clergy members."

Grassley noted that if Congress and the president had failed to clarify the parsonage housing tax allowance, "churches and synagogues could have taken a huge tax hit. It's reasonable for the tax code to offer modest tax breaks to non-profit organizations like churches and synagogues."

-- Electronic Accountant Newswire staff

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