“You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run…”
— Kenny Rogers, The Gambler
The Freedom from Religion Foundation has decided not to ask the U.S. Supreme Court to review the 7th Circuit decision in Gaylor v. Mnuchin (7th Cir., March 15, 2019) upholding a clergy-specific tax-free housing allowance provision in the IRS code. The secular organization has consistently argued that Internal Revenue Code Sec. 107(2) violates the Establishment Clause.
Although the FFRF was successful in challenging the allowance at the trial level, the 7th Circuit applied the Lemon test as well as the “historical significance test” and found that the primary purpose of the exclusion was secular and that the exclusion “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. We conclude Sec. 107(2) is constitutional.”
In a press release issued June 14, 2019, the FFRF stated that they “have full confidence in the legal merits of our challenge of the discriminatory pastoral housing privileges” because it provides clergy a housing allowance but denies it to those in secular 501(c)(3) organizations, but that moving the case to the Supreme Court would not likely result in their favor. “We did not feel the same confidence, however, in how the current Supreme Court would rule in our case, had we appealed. After ‘counting heads,’ we concluded that any decision from the current court would put the kibosh on challenging the housing allowance for several generations.”
For more information:
The Seventh Circuit Court of Appeals heard oral arguments this week in Gaylor v. Peecher, a case that challenges the constitutionality of tax-exempt housing for clergy. Under 25 U.S.C. § 107(2), a pastor may receive a payment separate from taxable salary to pay for housing-related expenses including rent, mortgages and utility services.
The 7th Circuit will decide whether a tax rule that allows only members of the clergy to deduct housing costs including rent, mortgage, furnishing, utilities, maintenance, and other associated costs is constitutional.
Last November, a federal judge stuck a stick in a beehive when she found that a long-standing tax-exemption for clergy housing was unconstitutional. The case, Freedom from Religion Foundation (FFRF) vs. Lew, is currently on appeal to the Seventh Circuit Court of Appeals and religious organizations are out in force defending the exemption.