Report: Judge declares tax-free housing for clergy ‘unconstitutional’

Report: Judge declares tax-free housing for clergy ‘unconstitutional’

The law was reportedly passed by Congress in 1954.

According to a report from the Wisconsin State Journal, a federal judge has ruled that a law that allows clergy members to avoid paying income taxes on housing money is unconstitutional.

Code Section 107(2) says that the income of a “minster of the gospel” does not include: “the rental [housing] 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.”

U.S. District Judge Barbara Crabb in Wisconsin wrote that “the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”

According to The Associated Press, the Freedom From Religion Foundation filed the lawsuit against U.S. Treasury Secretary Jacob Lew and acting IRS commissioner Daniel Werfel. Lew and Werfel were represented by the Department of Justice.

Annie Laurie Gaylor, co-president of the Freedom From Religion Foundation, told The AP that the law means that a church “could pay a minister $50,000 but designate $20,000 of it a housing allowance so that only $30,000 would be taxed as salary.”

The law was reportedly passed by Congress in 1954.

“The court’s decision does not evince hostility to religion — nor should it even seem controversial,” foundation attorney Richard L. Bolton said in a statement obtained by the Wisconsin State Journal. “The court has simply recognized the reality that a tax-free housing allowance available only to ministers is a significant benefit from the government unconstitutionally provided on the basis of religion.”

What do you think of the decision? Are you a clergy member? How do you feel about this ruling? Start a conversation by sharing your thoughts in the comments section.

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