By Melissa Barnhart
March 18, 2019
The U.S. Court of Appeals for the Seventh Circuit ruled Friday that a law giving clergy an exemption from paying income taxes on their housing allowance is constitutional. The ruling protects religious leaders nationwide from having to pay nearly $1 billion more each year in taxes.
The court’s unanimous decision in the case Gaylor v. Mnuchin reversed a district court’s ruling in 2017 in favor of the atheist legal group Freedom From Religion Foundation, which argued that excluding pastors’ housing allowance from their taxable income was unconstitutional.
A group of clergy who rely on the housing allowance appealed that decision to the Seventh Circuit and were represented by the law firm Becket.
“The tax code treats ministers the same as hundreds of thousands of nonreligious workers who receive tax-exempt housing for their jobs — that’s not special treatment, it’s equal treatment,” said Luke Goodrich, vice president and senior counsel at Becket, which defends religious rights. “The court rightly recognized that striking down the parsonage allowance would devastate small, low-income houses of worship in our neediest neighborhoods and would cause needless conflict between church and state,” he added. Read the rest of this entry