Paul L. Caron

Sunday, July 22, 2018

22 Tax Profs File Amicus Brief: The Section 107 Housing Allowance For 'Ministers Of The Gospel' Violates The First Amendment's Establishment Clause

Ellen Aprill (Loyola-L.A.), Reuven Avi-Yonnah (Michigan), Linda Beale (Wayne State), Samuel Brunson (Loyola-Chicago), Neil Buchanan (George Washington), Patricia Cain (Santa Clara), Adam Chodorow (Arizona State), Mark Cochran (St. Mary's), Bridget Crawford (Pace), Jonathan Forman (Oregon), Gregory Germaine (Syracuse), David Herzig (Valparaiso), Benjamin Leff (American), William Lyons (Nebraska), Roberta Mann (Oregon), Lori McMillan (Washburn), Joel Newman (Wake Forest), Henry Ordower (St. Louis), Katherine Pratt (Loyola-L.A.), Daniel Schaffa (Richmond), Erin Scharff (Arizona State) & Theodore Seto (Loyola-L.A.), Amicus Curiae Brief of Tax Law Professors in Support of Appellees (Gaylor v. Mnuchin, Nos. 18-1277 & 18-1280, 7th Cir. :

Section 107 allows “ministers of the gospel” to exclude the value of housing benefits from income, whether provided in-kind or as a cash allowance, at a cost of approximately $9.3 billion in forgone taxes over a ten-year window. The trial court dismissed the challenge to Section 107(1), which excludes in-kind housing, on standing grounds, but that section remains relevant to the analysis of Section 107(2). Supporters argue that Section 107(2), which excludes cash allowances, comports with the First Amendment’s Establishment Clause because (1) it is part of a broad policy expressed in a number of provisions that exempts housing provided for the convenience of the employer and (2) tax exemptions do not subsidize religious actors. Alternately, they argue that Section 107(2) is permitted as an accommodation for religion because it equalizes treatment of different religious groups and avoids church/state entanglement. Finally, they claim that eliminating Section 107(2) would imperil other exemptions.

Section 107 is a tax provision, and understanding how it functions within the Tax Code and differs from other facially similar provisions is critical to the constitutional analysis. Amici make four points. First, Section 107(2) differs significantly from other tax provisions that exempt housing from income and is not part of a broad housing policy that naturally includes ministers. Second, Section 107(2) subsidizes ministers, as reflected in both court decisions and the government’s own admissions. Third, Section 107(2) is not an appropriate accommodation for religion because it (1) disregards important differences in ministerial income that warrant different tax treatment, and (2) creates significantly more church/state entanglement than would the generally applicable rule. Finally, finding Section 107(2) unconstitutional would not imperil other exemptions.

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Michael W. Perry - What does the Clinton Foundation have to do with this topic? And, while on the topic of your tangent, what reputable source or credible evidence is there for your obsession with the idea that the Clinton Foundation has participated in any "tax-evading illegalities"?

Posted by: Awesome Anon Name | Jul 23, 2018 11:12:19 AM

When Republicans treat religious freedom as a piggy bank they can crack open to fund corporate tax cuts, you have to wonder how much longer the coalition of social conservatives and oligarchic billionaires can hold together.

Posted by: Over reaching GOP | Jul 23, 2018 10:26:27 AM

As much as I tend to disagree with the progressive causes of the law professor "elites," they are right on target here. Why should the clergy receive tax-free benefits that others who perform comparable services do not? I would put social workers, mental health professionals and employees of various 501(c)(3) organizations in a similar category. Most of those professions are low-paying as well.

Religion should be treated identically to any other non-profit activity, neither favored nor discriminated against. A billion dollars a year is not an insignificant amount, let's start collecting it.

Posted by: Todd | Jul 23, 2018 10:22:25 AM

From the brief: APPENDIX A -- All affiliations listed below are for identification purposes only.

Every one of the professors joining in this have many ways to identify themselves. Clearly, the prominent listing of affiliations with their colleges, without permission, is intended to provide weight to their position, which, perhaps, is at odds with any positions of their respective institutions. That would get people fired from many government agencies and businesses.

Posted by: Woody | Jul 22, 2018 7:19:07 PM

Are they also going to point out that the Clinton foundation's numerous, tax-evading illegalities should be investigated and prosecuted? Somehow I suspect not.

Posted by: Michael W. Perry | Jul 22, 2018 10:55:42 AM