September 11, 2012
Judge Revives Atheist Challenge To Clergy Housing Allowance
Freedom From Religion Foundation now has legal standing to sue after restructuring its compensation.
An atheist-led challenge to the longstanding parsonage tax break enjoyed by ministers will now move forward -- again -- after a Wisconsin federal judge recently ruled that the group has new legal standing for its lawsuit.
District judge Barbara Crabb ruled Aug. 29 that plaintiffs from the Freedom from Religion Foundation (FFRF) can challenge an IRS tax exemption for "minister[s] of the gospel" for certain housing-related compensation because the FFRF recently changed its salary structure to include such a housing allowance.
The federal government attempted to dismiss the case, arguing that “plaintiffs cannot file a federal lawsuit until they claim an exemption on their tax returns and the IRS denies the claim.” But Crabb ruled that the statute clearly denies the exemption to FFRF employees.
“I see no reason to make their standing contingent on the futile exercise of making a formal claim with the IRS,” she stated.
Last year, FFRF dropped a similar lawsuit after the U.S. Supreme Court ruled that individuals who wish to sue the government must prove injury as a direct result of the law—instead of suing just because they pay taxes. FFRF recently adjusted its salary structure to include housing allowances, which “do not qualify for the parish exemption as they (FFRF employees) are not ‘ministers of the gospel.’”
FFRF contends that the IRS code violates its employees’ rights under the establishment clause of the First Amendment and the equal protection component of the Fifth Amendment.
CT previously covered the Supreme Court's ruling in the related tax-break case in 2011 and the dismissal of the previous FFRF case. CT has also examined whether or not Congress should change pastors' housing allowances.