The Clergy Housing Allowance On Trial – New Developments

Will the clergy housing allowance stand?  Members of the clergy continue to receive mixed signals.  Two federal district courts in Kentucky and Wisconsin have considered the question – with very different outcomes.  The Wisconsin case is now on appeal before the Seventh Circuit Court of Appeals.  The venerable housing allowance stands in the balance.  Hundreds of thousands of clergypersons could be impacted by outcome of the appeal. We therefore provide this update and some insight on how the divergent outcomes might impact the Seventh Circuit’s decision. 

2014 ACT Report Released on the Unrelated Business Income Tax

On June 11, 2014, the IRS’ Advisory Committee on Tax-Exempt & Government Entities (“ACT”) released its 2014 Annual Report of Recommendations.  Approximately two hundred pages of the 357-page report are specifically focused on tax laws affecting exempt organizations, and all of the recommendations set forth therein focus on the unrelated business income tax.  The following are five key recommendations:

IRS Not Above First Amendment

The First Amendment trumps IRS’ interpretations of the limits of its authority.  In heartening news for nonprofits, a federal district court recently rejected the IRS’s efforts to defeat a First Amendment claim filed by an advocacy organization seeking Section 501(c)(3) recognition.   The case was filed by Z Street, Inc., a nonprofit corporation dedicated to educating the public about issues related to Israel and the Middle East.   See Z St., Inc. v. Koskinen, 12-CV-0401 (KBJ), 2014 WL 2195492 (D.D.C.