Court OKs tax-free housing for clergy

MADISON, Wis. — A federal appeals court ruled Friday that a law giving clergymen taxfree housing allowances is constitutional, overturning a ruling in Wisconsin that said it was an unconstitutional benefit.

The Wisconsin-based Freedom From Religion Foundation has been waging legal battles against the tax break for a decade. Several religious organizations intervened in the case, saying that the survival of many congregations depended on keeping the housing allowance. The Alliance Defending Freedom, a Christian legal advocacy group, issued a letter supporting the exemption, and more than 5,000 pastors signed onto it.

The 7th U.S. Circuit Court of Appeals said in its Friday ruling that the effect of the 1954 law is “neither to endorse nor to inhibit religion, and it does not cause excessive government entanglement.” The court noted that Congress has been providing federal tax exemptions for religious organizations as far back as 1802.

Annie Laurie Gaylor, co-founder and co-president of the Freedom From Religion Foundation, said the group was weighing whether to ask the full 7th Circuit to review the case or take it to the U.S. Supreme Court.

“It’s a blow,” Gaylor said. U.S. Justice Department spokesman Kelly Laco had no immediate comment on the ruling. The Justice Department was defending Treasury Department Secretary Steven Mnuchin, who was named in the lawsuit.

The Becket Fund for Reli- gious Liberty intervened in the case on behalf of Chicago’s Embassy Church and several other congregations.

Under the federal law passed in 1954, a “minister of the gospel” doesn’t pay income taxes on compensation that is designated part of a housing allowance.

The Freedom From Religion Foundation argued that the law discriminates against secular employees.

The benefit saves clergymen, including non-Christian religious leaders, about $800 million a year in taxes.