The Seventh Circuit Court of Appeals overturned a 2013 court decision that said clergy housing was unconstitutional. The tax break allows pastors to exclude the value of their rental home from their taxable income.
The Freedom from Religion Foundation challenged that tax law in 2013 in Wisconsin. The judge decided that the tax break did violate the First Amendment because it was “a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”
The housing allowance is "the most important tax benefit available to ministers," according to GuideStone Financial Resources.
This week, however, the court of appeals overturned that 2013 ruling, writing in an opinion that the FFRF should instead apply for those same church benefits on housing.
Earlier this year, a Kentucky court threw out a challenge to clergy tax benefits, saying that the atheists groups challenging the benefits should try to apply for those same benefits.
"At this point, the Atheists have no idea whether they could gain classification as a church or religious organization under I.R.C. 501(c)(3) because they have never sought such classification," he wrote, noting "the statutes and regulations pertaining to tax-exempt organizations do not expressly favor certain churches or certain religious organizations, nor do they expressly favor theist organizations over atheist or non-theist organizations."
Publication date: November 14, 2014