7th Circuit Hears Oral Arguments in Housing Allowance Case

Religion Clause blog reports today that the 7th Circuit U.S. Court of Appeals heard oral arguments (audio of full arguments) yesterday in Freedom From Religion Foundation v. Lew, No. 14-1152. FFRF is challenging Section 107 of the Internal Revenue Code which allows "ministers of the gospel" to exempt from their income taxes income designated as a housing allowance. The exemption is just one more example of mythical equal justice under law and the government's favoritism of belief (and Christianity in particular) over non-belief.

The benefit can be quite substantial. For example, Rick Warren, pastor of Saddlebrook Church in California, has been able to exempt a Section 107 housing allowance of hundreds of thousands of dollars per year from his income tax liability -- just one more reason why every man, woman and child share of the nation debt is $55,000.

As an aside, I am jealous of FFRF because Michael Gompertz and Robert Baty requested that I take this case a number of years ago.  FFRF beat me to the courthouse.

Housing allowance for ministers of the gospel held unconstitutional

Congratulations to Freedom From Religion Foundation for its win in FFRF v. Lew (W.D. Wisc., Nov. 22, 2013).

The U.S. District Court Judge Barbara B. Crabb held in an opinion filed today that the housing allowance exemption for "ministers of the gospel" -- IRC Sec. 107(2) -- violates the Establishment Clause under the Supreme Court's holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989).

26 USC § 107 - Rental value of parsonages reads in part:

In the case of a minister of the gospel, gross income does not include— 

(2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home 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.

This is a major victory for freedom from government sponsored religion, for the First Amendment of the Constitution prohibits government favoring one religion over another, or religion over nonreligion.

The benefit of the §107(2) exemption to clergy has been estimated to relieve ministers of $2.3 billion in taxes over five years. See statement of Congressman Jim Ramstad regarding the Clergy Housing Allowance Clarification Act of 2002, 148 Cong. Rec. H1299-O1 (Apr. 16, 2002).

Judge Crabb noted: "Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility." I made a similar point in my October 19th blog Myth #11: Removal of the Tombstone to Jesus Christ Would Constitute Hostility Towards Religion.