Atheists target clergy’s tax break for housing

September 19, 2011

A long-standing tax break for clergy and other "ministers of the
gospel" is facing the lastest in a string of challenges in federal
court. The Wisconsin-based Freedom from Religion Foundation filed suit
September 13 to challenge the constitutionality of tax deductions that
clergy are allowed to claim on their housing expenses.

The tax
break, called a parish exemption, allows clergy to deduct income that is
designated as a housing allowance, including rental payments and
mortgage interest. Such allowances are a common way for religious
congregations to boost the value of modest clergy salaries.

The
suit names Treasury Secretary Timothy Geithner and Internal Revenue
Service Commissioner Douglas Shul­man. The plaintiffs are Dan Barker and
Annie Laurie Gaylor, copresidents of FFRF, and Anne Nicol Gaylor, a
past president and cofounder. Annie Laurie Gaylor is executive editor of
Freethought Today.

All three plaintiffs receive part of
their salaries as housing allowances but do not qualify for the tax
exemption because they are not clergy. That amounts to an
unconstitutional government endorsement of religion, they claim, because
the parish exemption aids and subsidizes religion by providing
ministers with financial benefits not given to secular workers.

"The
government is preferring ministers of the gospel over those of us who
think religion should be, if not eliminated, limited," said Barker. A
former ordained minister, Barker has claimed the exemption in the past.

Grant Williams, a spokesman for the Internal Revenue Service, declined to comment on any pending litigation.

The
parish exemption entered the tax code in 1954, the same year the phrase
"under God" was added to the Pledge of Allegiance. The country was deep
in the cold war, and providing clergy with a tax break was seen as
reinforcing religiosity in the fight against godless communism.

There
have been several challenges to the parish exemption in recent years.
In 1996, the IRS denied megachurch pastor Rick Warren a $79,999
deduction he claimed under the law, but he won on appeal. In 2002,
Congress passed the Clergy Housing Allowance Clarification Act to
protect the parish exemption but limited it to the fair-market rental
value of a home.

The FFRF filed a similar suit in 2009 in
California but withdrew it earlier this year out of concern that the
plaintiff's legal standing—as a taxpayer—was not strong enough. After
the FFRF began awarding all three plaintiffs a housing allowance within
the past year to improve their standing in the case, they hope the new
suit demonstrates that they suffer serious financial injury when they
are denied the exemption.  —RNS