Brethren, Our Housing Allowance Is Now Unconstitutional (by William Thornton)

William Thornton is the SBC Plodder, and this post originally appeared there. 

It has been ruled so by a federal district judge in Wisconsin. I don’t know how widely the decision is to be applied.

My CPA blogging friend, Peter Reilly has greater understanding of this than I, so here is what he says:

The Freedom From Religion Foundation has won a stunning victory in the United States District  Court For The Western District Of Wisconsin where Judge Barbara Crabb has ruled that a substantial tax benefit enjoyed by many thousands of clergy – ministers, priests, rabbis, imams and others – is unconstitutional.

The ruling concerns only those housing allowances which are paid in cash, not those claimed by ministers living in pastoriums. I’d guess that most SBC pastors are in the former group and, absent subsequent action, face some serious recalibration of their compensation and tax payments.

The Freedom From Religion Foundation comments on the victory:

 The Freedom From Religion Foundation and its co-presidents Annie Laurie Gaylor and Dan Barker have won a significant ruling with far-reaching ramifications declaring unconstitutional the 1954 “parish exemption” uniquely benefiting “ministers of the gospel.”
“May we say hallelujah! This decision agrees with us that Congress may not reward ministers for fighting a ‘godless and anti-religious’ movement by letting them pay less income tax. The rest of us should not pay more because clergy pay less,” Gaylor and Barker commented.

U.S. District Judge Barbara B. Crabb for the Western District of Wisconsin issued a strong, 43-page decision Friday declaring unconstitutional 26 U.S. C. § 107(2), passed by Congress in 1954. Quoting the Supreme Court, Crabb noted, “Every tax exemption constitutes subsidy.” The law allowed “ministers of the gospel” paid through a housing allowance to exclude that allowance from taxable income. Ministers may, for instance, use the untaxed income to purchase a home, and, in a practice known as “double dipping,” may then deduct interest paid on the mortgage and property taxes.

“The Court’s decision does not evince hostility to religion — nor should it even seem controversial,” commented Richard L. Bolton, FFRF’s attorney in the case. “The Court has simply recognized the reality that a tax free housing allowance available only to ministers is a significant benefit from the government unconstitutionally provided on the basis of religion.”
Crabb wrote: “Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility. It is important to remember that the establishment clause protects the religious and nonreligious alike.”

You can expect GuideStone, the Ethics and Religious Liberty Commission, and every SBC leader living and breathing to be in a raging inferno over this decision and to be furiously lobbying for some legislative amelioration.

I haven’t read the decision and don’t know exactly what this means for clergy around the country. Let the lawyers and experts jump on it.

Alas, Sacred Clergy Tax Break in some trouble.

Those of you who live in pastoriums may now crow a bit, since you aren’t affected by the decision.


  1. Allen Calkins says

    It will also negatively affect retired pastors. Many of them shelter retirement income via qualifying for a housing allowance exemption. …Be interesting to see if the IRS comes out with any grandfather rules for retired folk. I doubt it!

  2. dr. james willingham says

    The criminality of the judge’s decision is evident on the face of it as she has clearly forgotten that the agreement made between the Baptists and the legislators in Virginia in the Revolution was that, in exchange for religious freedom, the Baptists would go back to their communities and encourage their young men to enlist in the Patriots Cause. Now, she has voided that original contribution, making it so that Baptist ministers who receive a housing allowance do so unconstitutionally, while those who live in parsonages have to pay through the nose (after all, the IRS can determine how much one should pay) and their real aim is to do what ever their creators demanded through the Federal Reserve which was to destroy the Protestant Faith, be it Baptist, Presbyterian, Episcopalian, Congregationalist, Reformed. After that, they might consider the Catholics as fair game. Anything Christian will have to go. And yet it is in records that in 1792 and, again, in 1892 that the Supreme Court ruled that this nation was a Christian nation. In fact, a couple of Scholars from Houston discovered that by 34% the Bible was the source of our founding documents over any political philosophers, including John Locke (8-9%) and Montesquieu (6-8%). What the plan is is to wrench this nation apart in a fratricidal strife in order to kill off about 75% of the population and return most of the land to the animals (e.g., a great grazing herd for the return of the buffalo). And people do not think there is a conspiracy. The brainwashing of the folks behind the scene is admirably effective. However, even the most blind can have their eyesight restored, spiritual speaking.

  3. says

    I gotta say, for a group so dedicated to be “freed from” religion, no group in America seems as obsessed with religion as they do.

    • William Thornton says

      As if the tax code must make sense and tax loopholes, special provisions, and the like are all justified.

  4. says

    I read the Forbes article. From a strictly legal standpoint, it appears this ruling is based on the premise that the establishment clause was violated. I wonder how this can be, given that the law applies to Christian pastors, Jewish rabbis, Muslim Imams, and any other recognized religious leader? I would think a legal challenge/appeal would strong merit if the scope can be limited to the particular reason for this statutes overturning.

  5. says

    I hope some legal experts will weigh in. My guess is that for now this decision applies to the area covered in the district, and will probably be taken to a higher court for appeal.

  6. Rick Patrick says

    Not until the Supreme Court rules on it. I am sure there will be an appeal. However, congratulations to the Plodder! Your wish has been granted. Let us give thanks not only for this but for all of God’s manifold blessings this Thanksgiving!

    • William Thornton says

      I don’t mind being poked at and have a robust sense of humor but be fair to me on this. My ‘wish’ has been that the HA be capped so that we do not have the absurd image of million dollar mansions being used by six figure income clergy to exclude hundreds do thousands of income from income taxes.

      I plan to write more on this later.

        • William Thornton says

          You obviously haven’t been reading all my stuff like you should. Try and pull yourself away from Alabama football and get up to speed. 😉

      • cb scott says

        Yeah, it is worth reading because O. S. Hawkins is a CRIMSON TIDE Fan. That means you can trust him to think rationally and constructive in a crisis.

  7. Rich Starnes says

    Some answers to some of the issues brought up above from an experienced appellate attorney:

    1) The ruling only applies in the jurisdiction the case was tried in–the western part of Wisconsin. If there is an appeal and the plaintiffs win (as they did in the trial court), the ruling will apply to the entire Seventh Circuit (Illinois, Indiana & Wisconsin). Only if it is appealed to and accepted to the US Supreme Court could it apply to every state. But other courts can find the reasoning of another Court of Appeals persuasive and apply it in lawsuits in other jurisdictions (that can also happen with the District Court opinion, but that doesn’t happen that often).

    2) There is no “legislative fix” for this. It’s a statute created by Congress (a legislative act) and there really is no way for Congress to pass a similar statute that would avoid the constitutional issue the court relied on.

    3) The fact that the allowance applies to all religions equally is irrelevant. The US Supreme Court has interpreted the Establishment Clause to apply to “religion” as a whole, not specific religions/sects/denominations. The relevant test under Supreme Court precedent is whether the statute has a primary effect of advancing “religion.” This law clearly does, as it provides a benefit to clergy (which is “religious”) that is not provided to non-clergy. Whether this is what the founding fathers meant to do in the Establishment Clause or whether that’s the way it should be is pretty much irrelevant–it’s binding precedent on every court but the US Supreme Court, and that court has not shown a strong inclination to change this interpretation when given the chance.

    The Seventh Circuit is not a bad court to appeal to, but I really see this going badly regardless. There is not a great secular rationale for the allowance that courts today are going to accept, as any secular rationale one could think of (e.g. churches are good for communities so we want to encourage their existence in our laws) will violate the Supreme Court’s interpretation of the Establishment Clause.

    • William Thornton says

      I am not persuaded that the case is such a slam dunk for FRRF on appeal, if Obama chooses to appeal it, as Rich says. In the joint press release by ERLC and GuideStone, Russ Moore said:

      “The clergy housing allowance isn’t a government establishment of religion, but just the reverse. The allowance is neutral to all religions.”

      • Rich Starnes says

        But it favors “religion” for no demonstrable significant secular purpose that just incidentally advances “religion”; by its nature its advances “religion.” That it applies “neutral[ly] to all religions” doesn’t change the fact that its primary effect is to favor religion over non-religion. The ERLC’s argument appears based more on what it believes the Establishment Clause should be than what the Supreme Court has said it is.

  8. says

    The main comment I have on this is that those of us in parsonages best not crow.

    First of all, because it would be wrong to celebrate Dave paying more taxes. :)

    Second, because it is a misfortune, especially to retired ministers who had planned on using that exemption to make lower pensions last better by excluding part from taxation.

    And, if you need a selfish reason, unless there is a general tax rule that allows any employer to provide an employee with a residence without counting the value of that residence as income, and therefore taxable, how long before that shoe drops, too? Avoiding the church paying property taxes on it might endure longer, but our habitation for no-cost/no-tax? That’s probably done for within 3 years of the appeals on this case playing out.

    Reasonable limitations would have been better. As to the statute, the one thing on the court case is this: the 1954 law seems to include the phrasing of “ministers of the gospel.” If you rewrote the law to indicate “recognized clergy/clergy-like employees of religious entities listed by the IRS” or something like that, which would potentially include even the so-called atheist clergy that I’ve read about–like the guy who wants to be a DoD Chaplain for atheists–then it might shift the situation. Don’t count on that one coming through Congress.

    As it looks, folks, start thinking now about how you will handle, and your church will handle, the end of religion-based tax-exempt status. That day is coming, and this is the real alarm from this ruling. FFRF has persuaded a court that a tax break for religion is a 1st Amendment violation. Consider that principle: a a tax break for religion is a 1st Amendment violation. What does that mean when it is extended to any tax break for religion?

    How much would the property tax on your building and grounds cost? Because you likely don’t pay them, due to a tax break for religion. How much income tax should your church pay, if it were a small business? Because you don’t pay it, because of a tax break for religion.

    That’s the pessimist view, but a few years ago we called William a pessimist for thinking this would actually happen, especially if there were no practical limits put on housing allowances. Now this ruling is there, and by the time it gets to the US Supreme Court, because FFRF won’t stop until they have nationally applicable precedent, who knows what will happen? Most likely, the Court backs the original ruling–and then watch how it’s applied.

    The days of consumer culture for the American church might have just been handed their death notice, thanks to a secularist group and a liberal judge.

    • Steve J. says

      I would speculate that those in parsonages won’t be excluded for long. I could easily see the courts and IRS deciding that church-provided housing is to be considered as a form of “imputed income” which they would tax. A very sad turn of events for our nation.

    • Rich Starnes says

      Those in parsonages would likely have no reason to crow. Should the exemption be overturned, the provision of “free” housing as part of compensation most likely becomes a taxable event (i.e., it’s just like any other income), and you would have to include an estimate of the fair rental value of the property in your reported income (and thus would have to pay income tax on it).

      • William Thornton says

        On this, clergy are no different than any who live in housing provided for them by their employer for the employer’s convenience; hence the lack of a constitutional issue and reason the decision Friday was directed solely to cash housing allowances.

        Most of us know about being required to next to the church for the congregation’s convenience. A church just providing a random house would be income to the minister.

        So as not to let pastorium-dwellers feel left out, they get to pay SECA taxes on the FRV of their ecclesiastical domicile.

  9. Dave Miller says

    Okay, all you legal eagles out there (where are Louis and Zach?) – is it possible that the court do some kind of dodge to keep the allowance legal? In the past, they have denied that the person bringing the suit has standing to do so. They have used that on gay marriage cases. What gives the plaintiffs standing to bring the suit?

    • Rich Starnes says

      In its “wisdom,” the Court has held that Establishment Clause cases are the only cases (outside of any where statutes convey standing) where being a citizen/taxpayer is sufficient to give you standing. Otherwise, there would never be an “injured party” to raise Establishment Clause cases. There don’t appear to be any other procedural hurdles involved here.

        • says

          My understanding is that on appeal the issue of standing is likely to come up again. We’ve seen numerous challenges on the basis of the Establishment Clause dismissed on technical reasons related to lack of standing.

          I’m not so sure this is a slam-dunk Establishment Clause violation, assuming that appeals court(s) will decide to closely follow the Lemon Test that Rich is alluding to. A strict application of the Lemon Test on Establishment Clause claims has fallen out of style in recent years.

          Remember that this same Judge – Barbara Crabb – previously ruled in 2010 that the statute establishing the National Day of Prayer was “an inherently religious exercise that serves no secular function.”

          The Obama Administration appealed (read that again) and the 7th Circuit Court of Appeals UNANIMOUSLY overturned Crabb’s ruling. That court found that FFRF lacked standing AND also rejected the substance of their argument.

          Church-state issues are never cut and dry. But, let’s look at this from a historical standpoint. The trajectory of church-state jurisprudence over the past 20 years or more has been away from separation and toward accommodation. We just haven’t seen many (any?) big Establishment Clause violations with broad implications upheld on appeal.

          The last major case on Establishment Clause grounds that I can remember was the 10 Commandments case and if you’ve been to Austin lately, the 10 Commandments in question are still located on the Capitol grounds….

          One judge declaring that this or that statute has no secular purpose, results in excessive government entanglement with religion and has the primary effect of advancing or inhibiting religion, is always the beginning of a conversation – not the end. And the trajectory has been for appeals courts to reject the controversial ruling of one lone federal judge on EC claims.

          • Rich Starnes says

            Well, the National Day of Prayer case was not based on taxpayer standing (as there was no federal expenditure involved). Also, the Kentucky 10 Commandments case handed down the same day as the Texas 10 Commandments case pretty strongly upheld Lemon and struck down the display in that case.

            There is a good recent case on the issue, however, which involved FFRF, the Western District of Wisconsin, and the 7th Circuit in a challenge to expenditures for Bush’s “Faith-Based Initiative” program. In that case, the District Court found no standing, the 7th Circuit found taxpayer standing, and the US Supreme Court found no standing. But they did not overrule the “taxpayer standing rule” (which only Scalia and Thomas wanted to do), instead limiting it to only to challenging congressional expenditures.

            Now, the allowance is an exclusion from revenue, not an expenditure. But that argument may be a little too fine. As long as there is taxpayer standing in EC cases, the FRFF members serving as plaintiffs probably have a pretty good argument it should apply here.

    • says

      “where are Louis and Zach?”

      Unfortunately, I was away from my computer all weekend, so I’m just now getting caught up on blogs. As I’m late to the party, I think that Rich Sterns (above) and Louis (below) have pretty much covered all the corners.

      The only thing that I would reiterate would be something that Rich has touched upon in his comments.

      As Christians, it’s important to understand that cases involving the Establishment Clause are likely being judged by a standard that is probably not intuitive or clear to those outside the legal field. It’s easy to want to look at the language of the Establishment Clause and to conclude simply that a tax break for ministers does not violate the prohibition against “Congress [making a] law respecting an establishment of religion.” Like it or not, though, the strict language of the Establishment Clause is not the be-all-end-all inquiry for these cases. The courts, in rendering their decisions, are bound to an extensive body of case law. Although previous cases may not have dealt directly with the housing allowance, previous cases have defined the parameters of the Establishment Clause and have directed the standards by which these cases are decided.

      I’m not saying I like or agree with the body of case law surrounding the Establishment Clause—I don’t—but it is what it is, and the concept of stare decisis is foundational to the operation of our court system.

      Regarding the ERLC’s comments posted above: As I’ve stated on here before, I have nothing but tremendous respect for Russell Moore and the rest of the team at the ERLC. In fact, I love the way the ERLC has really ramped up its educational and policy outreach over the past few months. That being said, I would agree with Rich’s assessment that their position “appears based more on what it believes the Establishment Clause should be than what the Supreme Court has said it is.”

      I wouldn’t say that the fight to maintain the housing allowance is completely hopeless. But, if I was a betting man, (and if this wasn’t an baptist blog!), I’d put my money on the housing allowance going away. Case law surrounding the Establishment Clause is just too broad.

      I’ve got the opinion printed out here on my desk. If I have a little extra time to read it this afternoon, I may post some more comments.

  10. Tarheel says

    So I would not have standing to object on the constitutionality of direct tax subsidies to planned parenthood….but any ole tax payer cn object to any indirect “subsidy” I may get?

    Direct subsidy is taking from us and giving real money to thier PP or green energy.

    I disagree with the whole premise that tax deductions/tax breaks are subsides as they only reduce the confiscated amount of our money they take…while subsidies are taking by force of law the money ive earned and giving it directly to someone else.

  11. Tarheel says

    I’d also ask how this tax break constitutes the “establishment of religion” as it requires no one to be religious or join or pay taxes to a particular religion…which was wha the founders wanted to prevent with the establishment clause.

  12. Tarheel says

    How is this tax break different than those afforded other “groups” … Is this intended to be used as part of an overall plan to end all tax breaks?

    If so….go to flat tax that everyone pays, no deductions…10%…everyone pays it….

    Ecpxmpt the first so much as poverty threshold.

    You make 500k your taxes are 10% Afterthe poverty threshold amount.

    You make 5 million same

    You make 45k

    You make 60k same.

    They’ll Never do that though.

  13. Louis says

    I am a lawyer and have great appreciation for the court system and our constitutional form of government.

    What will happen in this case is anybody’s guess.

    Since the New Deal, the courts have basically become the tool (and victim) of various groups opposed to the expression of religious views in public life. These groups have made an industry out of attacking religion in the public square. There are so many examples, it would be impossible to list them.

    The courts (including the Supreme Court) are all over the map on this. The root problem is that they have substituted actual constitutional language for non-constitutional language, have created extra Constitutional “tests” (3 pronged and otherwise) to analyze local, state and national statutes and practices.

    The results are often a hodgepodge that bear no relationship to either the Constitution or the history of our Republic.

    For example, the Supreme Court has ruled that the public can spend money on transportation getting kids to religious schools and for books, but not for maps.

    Sometimes the Ten Commandments are o.k. Sometimes not.

    Prayers in some places are o.k. Sometimes not.

    The truth is, it’s often arbitrary to the casual observer.

    I could go on here forever.

    This activity usually completely ignores the history of our country. What did the framers and ratifiers of our constitution mean when they said, “Congress shall make no law respecting an establishment of religion or prohibit the free exercise thereof.” The best way to find that out is to see how they lived and practiced their religion and its relationship to government.

    I am not suggesting that these cases are simple or that there might not be some examples of religious practice that should be forbade.

    But the cottage industry of groups established for the purpose of ferreting out practices they find offensive, suing, and then being paid attorneys’ fees if they win, that has been a part of our political life for the last 50 to 60 years really bears no historical relationship to the Constitution or our Republic.

    Standing is an issue, in my opinion, that should be revisited. Someone being offended should not give them standing.

    What these lawsuits boil down to is whether various practices (in this case, a housing allowance) is good and fair policy. They rarely touch the Constitution. If they did, one would have found lawsuits stretching back to the founding challenging all sorts of matters. And one does not find that.

    I believe the founders and ratifiers of the Constitution basically left these things up to the people to decide from time to time. Things would change over time as people changed their mind on issues.

    But we are where we are. So what’s the right answer here.

    I don’t know. I don’t know the history of the exemption. The Internal Revenue Code, as we have come to know it, was essentially adopted in 1954. The exemption dates from 1954, if the SBC site is correct.

    What was the purpose of the exemption? To promote Christianity? No. It applies to all religions.

    To promote religion? Probably not. It was probably to promote the health of society in general.

    In 1954, there was probably a recognition that one aspect of people’s lives that the government did not get involved in was religious faith and the help and comfort that came from religious groups. Those groups, primarily, operate on a shoestring budget with after tax dollars contributed by adherents. And in that day, many pastors lived in pastoriums. Many did not have retirement accounts. This history of the Sunday School Board is instructive here. Frost, Van Ness and other early leaders of the Sunday School Board kept working in later years, even in failing health, because they did not have retirement pensions.

    So, in adopting the IRC in 1954, the Congress probably recognized that society was receiving a great deal of care and assistance from a class of people working for non-profit groups living on a shoestring budget, and exempted some of their income so the churches and other groups would not have to make up the difference with salary increases.

    I have to admit, however, much of that is a guess.

    I would like to see some history on this, and not read it through 2013 glasses.

    On the other side, it is a good question to ask why religious ministers, as opposed to those who work in other non-profits who help people, should get some of their income exempted. That is a really good question. I can’t argue why, except from history and that churches and ministers are used to it. Is that good policy? Probably not. A tax break still makes some sense in my mind for those who live in facilities owned by the non-profit because they are not going to see any appreciation in the value of their property, as a homeowner would.

    So I can make a case either way, but would really like to have more historical data. That would be helpful.

    I don’t find, however, that this matter is a “Constitutional” matter for the reasons stated above. It is a legislative matter to be decided by Congress. Minds in our society are changing on this. Obama’s Treasury Secretary apparently is against it, so I think it would be helpful to have a legislative discussion about it and settle it there.

    It doesn’t make sense to solve this dispute by allowing some non-profit group to forum shop to find a judge who is known, apparently, for her extreme views on what the Constitution doesn’t allow with regard to religion or religious people and have her decide the case.

    And then for it to wind up to 9 people, most of who’s votes we can already reasonable guesstimate.

    I realize that is not a satisfactory answer, but it’s the best I’ve got.

    • says

      “On the other side, it is a good question to ask why religious ministers, as opposed to those who work in other non-profits who help people, should get some of their income exempted.”

      A very good question indeed.

      I work for a religious organization. I’m not ordained. Many of my colleagues are. From my vantage point, there is no fundamental difference in the type of work that I do and the type of work that my ordained colleagues do. They are eligible for the HA. I am not, and had I decided to get a M.Div instead of a M.A., I would probably be ordained too as it seems that ordination has become what a graduating/graduated seminarian does regardless of what’s next in life.

      It is interesting that the ministerial exception would apply to the ordained and those who have not been ordained, protecting the rights of religious institutions – but those same employees who aren’t ordained can’t get the benefit of a HA.

  14. Louis says

    Ordination is probably the test because historically only legitimate ministers were ordained and set apart in society, usually for life. Ordination was a bright line test for determining who has been set apart by their religious orders for full time work.

    Ordination works well as the test if the religions in a society maintain a strong clergy/laity distinction.

    Evangelicals don’t even care for that distinction. It breaks down in all sorts of ways.

    I was “licensed” to preach at age 19. At my church I am an elder and our official definition is that of a pastor. I preach, have performed weddings, have administered Communion (without incident or mistake – “B before C”) and can baptize.

    Plus, look at the proliferation of non-profits now that do really good work. I am not for expanding the housing allowance because I think it would become out of control. Would everyone who works at Campus Crusade, Acorn or the ACLU get it?

    And since I am not for an expansion, I can see why there would be criticism of having it only for ordained ministers.

    It is apparently a historical artifact that has many critics.

    • Jon says

      There are limitations beyond ordination. The church/employer has to set the amount, and it’s limited to the actual expenses for a single house, not to exceed fair rental value.

      If Crusade, Acorn or the ACLU could articulate a job description that required substantial business use of a residence akin to a parsonage, I don’t know why we’d object. The IRS seemed inclined to do just that. This is merely a recognition that business use of the premises is a common expectation of employees in a ministerial job.

      I don’t think there’s anything specifically religious about the idea, except maybe that churches aren’t required to engage in post-hoc documentation. But if an independent employer and employee both agree there’s a similar requirement for top executives, I don’t know that it makes sense to turn it into a bookkeeping nightmare.

      The alternative is that you force nonprofit employers to buy houses outright (killing local property tax), or require the employer and employee to have an annual, after-the-fact meeting, going over square footage rental rates, toilet paper used by guests, and cups of coffee consumed during ‘business’ discussions.

  15. says

    This law has existed in some form since 1921. Its a technical issue and the first hurdle for anyone complaining about it is a technical legal theory called standing. That means unless you have been wronged, you can’t complain. These guys ginned up a wrong for themselves by being awarded a housing allowance and then said, hey we’re being discriminated against. My concern is that the Obama Administration has to defend this law and given its unwillingness to defend laws (like DOMA) that are seen as favoring evangelicals, it might let the ruling stand unappealed (in which case it applies to the folks in the Western District of Wisconsin). On the other hand if folks like Rev. Wright get his ear, then it might have a chance of being appealed to the 7th Circuit.

  16. William Thornton says

    I suspect that there will be a rare convergence of lib, mod, and con religious groups and the administration will appeal.

    One interesting part of the government’s defense of the HA was that even though the cash housing allowance payment was allowable for “ministers of the gospel” the phrase should be given a broad reading such that athiests may be seen as “ministers of the gospel” and thereby entitled to a HA.

    • says

      A couple interesting observations from skimming the decision.

      1) The judge invokes Scalia’s dissent in Texas Monthly to justify her argument on one point.

      2) The judge quotes Donald Reagan, the Treasury Secretary during the REAGAN Administration, citing a memo he wrote in 1984 arguing for the repeal of Section 107 because “there is no evidence that the financial circumstances of ministers justify special tax treatment. The average minister’s compensation is low compared to other professionals, but not compared to taxpayers in general.”

      Lew argued that Section 107 “provides a disproportionately greater benefit to relatively affluent ministers, due to the higher marginal tax rates applicable to their incomes.”

      The history of the Housing Allowance as described in the opinion is interesting:

      “The Treasury Department began applying the doctrine in 1919, shortly after the federal government began collecting income tax, using the rationale that housing should not be viewed as compensation if it is provided by the employer to enable an employee to do his job properly. Examples of employees who received the exemption included seamen and hospital workers who were required to be on call 24 hours a day.”

      Then the exemption was codified into law in 1954, allowing an employee to exclude from gross income “the value of any…lodging furnished to him…buf\t only if…the employee is required to accept such lodging on the business premises of his employer as a condition of his employment.”

      And now in 1954 is when the agreed upon history and purpose of the exemption just completely breaks down.

      The argument from the atheists goes that the purpose of the 1954 law was to advance/promote religion. To make this argument, they cite a quote then from Rep. Peter Mack who sponsored the law, who clearly shows that the exemption was to help ministers “being threatened by a godless anti-religious world movement.”

      Also, the judge contends that 107(2) discrimination against religions that do not have ministers (some Mormons perhaps?) and discriminates among clergy based on the specific tasks they are forming. “For example, a congregational religion with no permanent or specifically designated ministers would not receive section 107(2)s financial benefits as would a centralized religion with a designated ministry”

      • Louis says

        The Gospel Coalition has an interesting article on the decision and the history of the exemption. It says that people serving in the Peace Corps and the diplomatic corps also get a housing allowance exemption. One of the reasons cited is the fact that ministers, peace corps workers, and the diplomatic corps have to move often.

        The article says that the allowance moved from the traditional pastorium to situations where there was not a pastorium so as not to favor wealthy, established churches that owned property to the disadvantage of younger churches and church starts which might not even own property for a church building, let alone a second property as a place for pastors to live in.

        Here it is:

        As for whom the Judge quotes, that can be interesting, but quotes abound, and one can select anyone across the spectrum, as poeple are probably not monolithic on this.

        Quoting Don Reagen and Antonin Scalia (who are as different as night and day on some issues) is just the judge’s way of trying to justify her opinion – quoting someone people might think would be on the opposite side. What if someone found quotes in favor of the allowance from Robert Byrd and Harry Reid? Would be the same thing.

        The legislative history quote from the one congressional reprensentative shows how citations to legislative history are often absused.

        Getting an overall sense of why a provision was passed is necessary and helpful. But quoting one guy like this is not really reliable. Congress has 535 members (did I get that right?), and any one of them can step to a camera or a mic and say what they think. Their thinking should not be imposed on all 535 members. And quotes like that should not be used to taint a legislative proposal at some later date.

        I personally know of legislators who are opposed to legislation, but when they see it is going to pass, they will often vote in favor of it, and issue presss releases and make outlandish statements about the legisitlation that they hope will taint it when and if a constiutional challenge is made. They can’t defeat it with a vote, but they can try to set it up so it’s defeated later.

        I suspect that the quoted congressman was sincere. Regardless, his thinking cannot be inappropriately applied to the entire body or to the language of the legislation. We have to look at the actual law to figure that out.

        I appreciate your providing the quotes. But for the most part, they all sound like legislative arguments, not consitutional ones.

        That is my main point in all of this.

        • William Thornton says

          There are legitimate constitutional scholars who fall on both sides of this question about the cash HA constituting an establishment of religion.

          There is a common sense question that needs to be answered by those who point to the difference between a minister who is required to live in a pastorium as a convenience to his employer (just like caretakers and some other secular occupations; those housing allowances were not affected by the judge’s decision) and the minister whose church has sold the old pastorium and which now pays the pastor a cash allowance.

          The question is this: Where a minister shops for his own home, finds one he likes, and buys it with the HA, is this minister living in that home for the convenience of his employer just like he did when he lived in the pastorium next to the church and where his back yard play equipment was used by all the church kids, where he fielded requests for handouts by transients passing through, or where church members would freely drop by to see if the pastor could get the temperature right for their committee meetings.

          Few of us would dare to say “yes,” the pastor moved into a community as a convenience to his employer that was in any way different than the new school teacher or executive who lives near his or her job

          This is not a credible argument. In fact, it is probably hypocritical for many of us to make it since we persuaded the church to sell the pastorium so that the pastor and his family wouldn’t have to endure this stuff.

          There may be some case to be made with differences between denominations but the government didn’t make much of an case for that.

          • Louis says


            There are legitimate constitutional scholars who fall on different sides of almost every matter decided the Court.

            Your other points are well taken. Legislators need to take all of those questions, and others, into consideration when making a decision like this.

            After reading BDW’s information and the Gospel Coalition article, it’s pretty obvious that the HA exemption developed over the years. Started out as a pastorium, then was extended so as not to discriminate against poorer and non-ecclesiastical churches to the point where we are today.

            This is not the kind of exemption that would be adopted today, if we were instituting the income tax today.

            But things develop over time, and now we have generations of people who have lived with it and thousands of religious workers and their congregations who have relied on it.

            The question is what to do about it now.

            It is a tough question.

          • Jon says

            There’s a psychic benefit to picking out a place, William, but I’m not sure that makes the church expectation about its use very different.

            The ministers I know use their houses for home office and study, meetings with members, pie and coffee discussions, dinners with deacons, elders, etc. They see lots of impromptu visits and requests for handouts. They keep extra food around for unexpected guests; they keep the A/C and heater a bit closer to 72. They host visiting missionaries, evangelists, speakers, guests, etc. They try to have public areas of the house that are presentable on short notice, with decent furniture, separate from the kids. If you forced them (or their wives) to track the hours, expenses, and areas used for church activities, it would be significant in many cases.

            I think the job usually requires the pastor to consider the location of his ministry, his flock, and the expectations of the congregation. He’s likely to buy a bigger house than he otherwise would, spend his money on different features, devote some of the space primarily to church and career, and spend his money differently to keep it stocked and maintained. Given his salary, he’s likely to be in a more expensive house than he would, otherwise, and and even though statistics say he’ll only be there for three or four years.

            So, it’s an improvement to fix your own roof without involving the parsonage committee — but most churches I know expect a good deal of the minister’s house. I’d make that case to the IRS, but I get the feeling lots of pastors say they’re pulling a fast one. Am I alone in this time warp?

          • William Thornton says

            Jon, that’s a pretty good effort but I don’t think either the IRS, courts, or general public will be persuaded that the pastor living in a parsonage next to the church and one living five miles away are equally using their domicile a for the convenience of their employer.

    • Tarheel says

      Of course in obedience to the authority ordained by God I’ll render what Ceaser requires…

      ….but commitment does not require liking it, or forbid objecting to or opposing tax schedules or even avoiding legally every tax I can avoid.

          • Tarheel says

            Greg, I think you know thats a bit of a Distortion of what I said.

            I mean’t that I’ll obey God by honoring Caesar, but I’ll also excercise the freedom recognized by Caesar (also a form of honoring Caesar) in our democratic republic to object as I see fit to tax policies and work within the bounds of the law to persinally avoid excessive taxation.

    • Louis says

      In a democracy, “We, the people” are Caesar.

      We can be passive about lots of legislative matters.

      But having an interest and an opinion or argument about the way things ought to be is not uspiritual. It’s actually the exercise of our stewardship as citizens.

      But in the end – you are right. We have to render. We can still lobby for changes, but until then, we obey the law.

    • Tarheel says

      Your comments on subsides mirror the points I’ve made for years relating to “tax breaks being subsidies”.

      They’re not. Period.