On October 24, 2018, a three-judge panel of the federal Seventh Circuit Court of Appeals heard oral arguments in Gaylor v. Mnuchin, a tax case brought by the Freedom From Religion Foundation (FFRF) and its individual leaders challenging the constitutionality of tax exemption for the venerable clergy housing allowance. Attorneys from the U.S. Department of Justice (DOJ) for U.S. Treasury Secretary and the IRS Commissioner, as well as a group of religious intervenors, urged the court to uphold the exemption and defended its basis in the Constitution and related religious liberty jurisprudence. Attorneys for FFRF and a group of opposing tax professors contended that the allowance favors religion in violation of the First Amendment.
In a recently issued Tax Court case, Judge Mark Holmes rendered a decision that may be the most thorough judicial analysis of the law surrounding “love gifts” for pastors that has ever been published.
Yet another court ruling has been issued on a somewhat obscure regulatory requirement that highlights the tension between significant First Amendment rights and the state’s power to threaten them. The context is the power of the States’ Attorneys General, in regulating Section 501(c)(3) charitable organizations, to obtain otherwise confidential major donor information as disclosed on IRS Form 990 Schedule B. The case is Americans for Prosperity Foundation v. Becerra, previously Americans for Prosperity Foundation v. Harris, in which a three-judge panel of the federal Ninth Circuit Court of Appeals recently reversed a District Court Judge’s judgment that such requirement was unconstitutional as applied to the litigants’ specific circumstances. The Court’s ruling demonstrates a fundamental difference in perspective as to the government’s role in the face of compelling First Amendment free speech and freedom of association rights.