By Will Hall, Message Editor
The ministerial housing allowance allowed by the IRS has been upheld by the 7th U.S. Circuit Court of Appeals in Chicago after being struck down for the second time by the same federal jurist for the Western District of Wisconsin.
U.S. District Court Judge Barbara Crabb, appointed in 1979 by President Jimmy Carter, had ruled in 2017 and before that in 2013, that the housing allowance was a violation of the Establishment Clause of the First Amendment in the U.S. Constitution.
In the first case, the 7th Circuit Court ruled that the Freedom from Religion Foundation, an atheist group which brought the suit, did not have standing because they could not show harm from the benefit being extended to clergy. But the court did not rule on the constitutionality of the housing allowance.
This time, FFRF executives applied for the housing allowance and were denied the benefit that permits “ministers of the gospel” to deduct housing-related expenses from their taxable income when filing with the IRS.
But a three-judge panel, all Republican appointees, was not sympathetic to the FRFF’s claim that the Internal Revenue Code 107(2) tax break for religious leaders effectively “renders unto God that which is Caesar’s.”
“[T]his tax provision falls into the play between the joints of the Free Exercise Clause and the Establishment Clause: neither commanded by the former, nor proscribed by the latter. We conclude § 107(2) is constitutional. The judgment of the district court is REVERSED.”