Seventh Circuit: Clergy Housing Allowance Is Constitutional
Section 107(2) of the Tax Code allows ministers who rent or own their own homes to receive an annual housing allowance from their employing church—and not pay federal income taxes on the designated amounts. The provision was adopted by Congress in 1954 after clergy from a variety of faith traditions indicated there was unequal tax treatment for those who were not provided a parsonage from their employing house of worship. In 2017, a federal district judge in Wisconsin ruled in favor of the leaders of the Freedom From Religion Foundation (FFRF) who argued the housing allowance exclusively benefits ministers, violating the Establishment Clause of the First Amendment. On Friday afternoon, the US Court of Appeals for the Seventh Circuit in Chicago reversed this decision.