Court Overturns Atheist Victory Against Pastors’ Best Benefit

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Seventh Circuit rules Clergy Housing Allowance is constitutional, despite challenge by Freedom from Religion Foundation.

For the second time, a popular tax break for pastors has been judged permissible under the US Constitution, despite efforts by an atheist legal group to prove otherwise.

Today the Seventh Circuit Court of Appeals overturned a lower court’s 2017 ruling that the Clergy Housing Allowance violates the First Amendment.

Offered only to “ministers of the gospel,” the 60-year-old tax break excludes the rental value of a home from the taxable income of US clergy, CT previously reported. GuideStone Financial Resources has called it the “most important tax benefit available to ministers.”

The allowance is currently claimed to the tune of $700 million a year, according to the latest estimate by the congressional Joint Committee on Taxation.

The October 2017 decision by Wisconsin district judge Judge Barbara Crabb had been a victory for the Freedom from Religion Foundation (FFRF), which “jeopardized the benefit for clergy in Illinois, Indiana, and Wisconsin … and many predicted similar consequences nationwide,” wrote CT’s sister publication, Church Law & Tax (CLT) in an analysis.

In today’s ruling, a panel of three judges again refuted the claims of FFRF attorneys, deciding that the allowance passes muster according to two related Supreme Court rulings, Town of Greece v. Galloway and Lemon v. Kurtzman.

“FFRF claims Section 107(2) renders unto God that which is Caesar’s,” wrote circuit judge Michael Brennan. “But this tax provision falls into the play between the joints of the Free Exercise Clause and the Establishment Clause: neither commanded by the former, nor proscribed by the latter.”

CT previously reported how the FFRF challenged the same tax …

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