WASHINGTON (RNS)—The Freedom From Religion Foundation has dropped its long-running fight against the clergy housing allowance permitted by the U.S. government.
“We have full confidence in the legal merits of our challenge of the discriminatory pastoral housing allowance privileges,” the Wisconsin-based atheist watchdog announced June 14. “We did not feel the same confidence, however, in how the current Supreme Court would rule in our case, had we appealed. After ‘counting heads,’ we concluded that any decision from the current court would put the kibosh on challenging the housing allowance for several generations.”
The Freedom From Religion Foundation said it hopes its strategy will allow the issue to be reconsidered when the high court has a different makeup.
In March, the 7th U.S. Circuit Court of Appeals ruled that the allowance was constitutional. A lower court had ruled in the atheist group’s favor. But a three-judge circuit panel reversed a Wisconsin judge’s decision.
“Any financial interaction between religion and government—like taxing a church, or exempting it from tax—entails some degree of entanglement,” wrote Judge Michael Brennan. “But only excessive entanglement violates the Establishment Clause.”
He added that the allowance also is not forbidden by the free exercise clause of the First Amendment.
Under IRS regulations that date to 1954, clergy do not have to pay taxes on housing that is supplied in a parsonage by their congregation or on the portion of their salary that they use for housing expenses.
The Freedom From Religion Foundation also challenged the housing allowance in 2013, winning in a lower court. But an appeals court also overturned that ruling.
Becket, a nonprofit law firm that focuses on religious liberty, celebrated the The Freedom From Religion Foundation’s dropping of its legal fight over the parsonage issue. It had represented a Chicago church and religious leaders who supported the allowance.
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Luke Goodrich, Becket’s vice president and senior counsel, said the tax code exempted ministers as well as members of the military and others in special categories.
“The court rightly recognized that providing this kind of equal treatment to churches is perfectly constitutional, and churches should be allowed to serve the neediest members of their communities without the tax man breathing down their neck,” he said.