District Court: § 107 Housing Allowance for 'Ministers of the Gospel' Violates the Establishment Clause

Freedom From Religion Foundation v. Lew (W.D. Wisc. Nov. 22, 2013):

§ 107(2) ["In the case of a minister of the gospel, gross income does not include ... the rental allowance paid to him as part of his compensation."] violates the establishment clause under the holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), because the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise. ... Because a primary function of a “minister of the gospel” is to disseminate a religious message, a tax exemption provided only to ministers results in preferential treatment for religious messages over secular ones. ... [I]f Congress believes that there are important secular reasons for granting the exemption in § 107(2), it is free to rewrite the provision in accordance with the principles laid down in Texas Monthly and Walz so that it includes ministers as part of a larger group of beneficiaries. ... As it stands now, however, § 107(2) is unconstitutional.

• Forbes, Judge Declares Tax Exclusion For Clergy Housing Payments Unconstitutional, by Peter J. Reilly
• Freedom From Religion Foundation Press Release, FFRF, Gaylor, Barker Overturn ‘Parsonage Exemption’ Clergy Privilege
• Religion Clause, Court Holds That Tax Code's Parsonage Allowance Violates Establishment Clause, by Howard Friedman (Toledo)
• The Volokh Conspiracy, Tax Exemption for Ministers’ Housing Expenses Violates the Establishment Clause, by Eugene Volokh (UCLA)
• Washington Examiner,  Secular Victory: Religious Income Tax Exemption Ruled Unconstitutional

(Hat Tip:  Howard Friedman, Lori McMillan, Steven Sholk.) Prior TaxProf Blog coverage:

• Burgess J.W. Raby & William L. Raby, The Clergy and the Tax Collector, 2006 TNT 41-23 (Mar. 3, 2006)
• John R. Dorocak (California State University, San Bernardino), Toward a Legislative Solution to Constitutional Problems of Same-Sex Couples and Ministers of the Gospel?, 19 Temp. Pol. & Civ. Rts. L. Rev. 223 (2009).
• John R. Dorocak (California State University, San Bernardino), The Income Tax Exclusion of the Housing Allowance for Ministers of the Gospel Per I.R.C. § 107, 54 S.D. L. Rev. 233 (2009)
• District Court Allows 1st Amendment Challenge to § 107 Parsonage Allowance to Proceed to Trial (May 24, 2010)
• Edward A. Zelinsky (Cardozo), The Constitutionality of the § 107 Parsonage Allowance (Mar. 23, 2012)