Seventh Circuit: Clergy Housing Allowance Is Constitutional
Appellate court reverses lower court ruling, preserving valuable tax benefit.

After an appellate court ruled the clergy housing allowance to be constitutionally permissible in March, churches across the nation breathed a collective sigh of relief. For good reason. The allowance is the most valuable tax benefit to ministers who qualify for it. It’s estimated to be worth nearly $700 million a year, according to the congressional Joint Committee on Taxation.

Still, churches should be aware that the clergy housing allowance could be headed for more challenges, either from the Freedom From Religion Foundation (FFRF)—the atheist organization that brought the most recent lawsuit—or other like-minded organizations.

In a statement after the March decision by the US Court of Appeals for the Seventh Circuit in Chicago, the FFRF urged Congress to take the opportunity and intervene by repealing Section 107(2), the Tax Code provision that makes the clergy housing allowance possible. In a tweet, the Associated Press said FFRF is “reviewing options.”

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Posted: March 15, 2019
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