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.
What does it take to successfully obtain charitable property tax exemption for a nonprofit’s real estate? As the Illinois Supreme Court ruled recently in: plenty – and more than just doing good in terms of overall programming. While its holding focused on hospital exemption, the Court decision is more broadly instructive in reaffirming the long-established and still-applicable key elements of exemption qualification.
When a local church or other house of worship leaves a denomination for theological or other reasons, who or what keeps its real property and other assets? Given the ever-shifting lines of the American religious landscape, this is unfortunately a perennial question – for religious organizations and sometimes for the courts, too. In recent years, the U.S. Supreme Court has repeatedly resisted efforts to address property rights battles between the Episcopal denomination and breakaway local churches. A newly filed petition arising from a South Carolina court ruling against a local church may present just the right Supreme Court opportunity to resolve lower federal and state courts’ conflicts about how best to balance First Amendment rights among denominations and their local churches.