What will become of the clergy housing allowance? We have been following the legal developments a 2013 Wisconsin federal district court case, which struck down the venerable income tax benefit as unconstitutional. The case is now on appeal before the Seventh Circuit Court of Appeals. See Freedom from Religion Found., Inc. v. Lew, 983 F. Supp. 2d 1051 (W.D. Wis. 2013). This decision stands in stark contrast to other decisions, including a 2014 Kentucky federal court case, that have rejected such challenges creating disagreement among the courts as to whether the tax benefit is constitutional. If upheld on appeal, the Wisconsin case thus could result in a drastic sea change for clergy tax benefits.
Not surprisingly, the Seventh Circuit appeal continues to generate much interest. As of September 3, 2014, six briefs have been filed with the Seventh Circuit Court of Appeals. Two of the briefs are from the parties themselves. Four, however, have been filed by amici curiae -- “friends of the court.” The friends of the court are interested parties who feel they have important information for the court to consider. The parties provide such information to the court in amicus curiaebriefs.
Three of the amicus curiae briefs argue the housing allowance is constitutional and should not be disturbed. Remarkably, these briefs, together, represent more than ninety American religious groups. These groups span much of the American religious landscape: Jewish, Protestant, Islamic, and Catholic. The groups’ broad support underscores the critical nature of the issue under consideration. The remaining brief has been filed on behalf of two small organizations arguing for abolition of the housing allowance.
Copies of the four briefs are located here:
- Brief in opposition to the housing allowance
- Brief 1 in support of the housing allowance
- Brief 2 in support of the housing allowance
- Brief 3 in support of the housing allowance
If the Seventh Circuit affirms the Wisconsin district court and the IRS implements such decision, the financial impact on clergy and the religious institutions they serve could be massive. Our law firm will continue to monitor developments from the Seventh Circuit and report updates to the status in this crucial case.
Interested in learning more? Click for our other posts on the clergy housing allowance exemption.