(Kaylee McGhee, Liberty Headlines) A federal court in Wisconsin struck down a longstanding tax provision on Friday that protected ministers and other religious officials to live close to their churches or the communities they serve.
The “parsonage allowance,” protected by nearly 65 years of precedent, was deemed a violation of the Establishment clause, “because it does not have a secular purpose or effect and because a reasonable observer would view the statute as an endorsement of religion.”
Ken Klukowski, an attorney for the First Liberty Institute, said on “Washington Watch with Tony Perkins” that he wasn’t surprised by the ruling, given federal Judge Barbara Crabb’s past far-left rulings.
“I understand how she reached her decision,” Klukowski said. “I think it’s wrong, not because she didn’t engage in a careful analysis, but because she fundamentally flips on its head what the Establishment clause is supposed to all be about.”
The “parsonage allowance,” a federal law established in 1954, stated that a “minister of the Gospel” does not need to pay income taxes on compensation that is designated to his or her housing bills. The Freedom From Religion Foundation, an atheist organization based in Madison, argued the statute discriminated against secular employees.
Becket law, a religious freedom nonprofit representing a Chicago-based pastor Chris Butler, said the law cannot be discriminatory, since it also covers secular employees who receive housing funds from employers.
Becket said that if Butler lost the housing allowance, he would be forced to move out of his neighborhood — one of the poorest in the city — and find a second job to support his family. The court’s decision could even force churches to close altogether, the group said.
Crabb agreed with FFRF, however, saying the tax code allows clergy members and other religious officials to “double dip,” a practice in which citizens use untaxed income to purchase a home and then deduct the interest paid on the mortgage and property taxes.
“In reaching this conclusion, I do not mean to imply that any particular minister is undeserving of the exemption or does not have a financial need for one,” Crabb wrote in her decision. “The important point is that many equally deserving secular employees (as well as other kinds of religious employees) could benefit from the exemption as well, but they must satisfy much more demanding requirements despite the lack of justification for the difference in treatment.”
Crabb struck down the law in 2013, but the 7th U.S. Circuit Court of Appeals reversed the ruling after it was appealed, saying the FFRF did not have legal standing to bring the lawsuit, since its co-presidents had never been denied the parsonage exemption. The co-presidents then requested the tax benefit in 2015 and were rejected by the IRS, allowing them to file a new lawsuit in 2016.
Hannah Smith, senior counsel at Becket, said that nothing about the tax code was unconstitutional, since it treated both religious and secular employees the same.
“It’s not unconstitutional for the federal government to treat faith leaders the same as other secular employees in their housing allowances. In fact, treating them differently would be discrimination against religion, pure and simple,” she said in a press release.
Klukowski said there is a chance that the case can be appealed because of Crabb’s obvious anti-religious bias. Annie Laurie Gaylor, a co-president of FFRF, said she was confident the decision would survive appellate challenges, however.
“It’s a huge ruling,” she said. “The last one created shockwaves and this one should really be creating them. I think everybody knows we’re right, they just don’t like changing the law.”
Butler said the ruling does a disservice to the religious community and to the Constitution. He said he hopes a higher court will uphold the true interpretation of the Establishment Clause.
“This decision is crippling to the equal treatment of our nation’s faith leaders—but it will not stand,” he said in a statement. “Our job and our life’s purpose are one and the same: to serve our congregations and our communities 24/7. Living close to our faith communities is vital to our missions, and we should not face discriminatory tax penalties for doing so.”Click here for reuse options!
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