Pastors can breathe a sigh of relief today as the 7^th Circuit Court of Appeals has reversed a lower court decision to strike down the minister’s housing allowance as unconstitutional.

Previously, the Freedom From Religion Foundation (FFRF) had argue that the housing allowance given to pastors was unconstitutional because it provided an unfair tax benefit to pastors, creating preferential treatment for religious messages. It was argued that the housing allowance violated the Establishment Clause of the First Amendment and the equal protection provision of the Fourteenth Amendment. The lower court, with Judge Barbara Crabb ruling, agreed with the FFRF and ruled the housing allowance unconstitutional.

Though the ruling only affected pastors in Wisconsin, Illinois, and Indiana, pastors across the country watched the case with serious interest knowing if the ruling was upheld it would soon spread.

The 7^th Circuit determined that since the FFRF was never denied tax-exemption under the housing allowance tax code they had no standing concerning the issue:

“The plaintiffs were never denied the parsonage exemption because they never asked for it, ” the three-judge panel stated. “Without a request, there can be no denial. And absent any personal denial of a benefit, the plaintiff s’ claim amounts to nothing more than a generalized grievance about §107(2)’s unconstitutionality, which does not support standing.”

Commenting on dismissing the case for standing, Christianity Today wrote:

“In other words, the FFRF should apply for the same benefits that churches get. This was the intriguing argument the Department of Justice made earlier in the case: that atheists would qualify as “ministers of the gospel” under IRS guidelines. CT’s sister publication, Church Law and Tax, offers more analysis, including how the Seventh Circuit rejected the current challenge but outlined how a future challenge could proceed. The FFRF told Religion News Service that it plans to carry on the legal fight.”

It is clear this fight will continue. What is curious and will be interesting to watch is whether atheist groups such as the FFRF will apply for pastors housing allowance tax benefits. If they do, they will no doubt fall under the same IRS codes for religious organizations that they currently seek to hold churches accountable to. That is significant in that they would no longer be allowed to do many of the things they currently do in opposing churches.

Would the FFRF really apply for and receive a major tax benefit just for the purpose of then going to court to sue to have it removed? Not likely. It seems far more plausible that the FFRF is simply seeking to gain this tax benefit for themselves. But in doing so they would then be forced to fall under the same guidelines and classifications that churches do. This seems problematic for the FFRF as they seek to disseminate information in places they believe churches are not legally allowed to. Their entire operation would be severely hindered if they were classified as a “religious organization.”

Alliance Defending Freedom has been on the forefront of this legal battle from the beginning. With the support of churches and pastors across the nation they went to court to defend the ministers housing allowance. After the decision by the 7^th Circuit ADF senior legal counsel Erik Stanley said:

“The government isn’t subsidizing something when its money is not even involved. That’s what the U.S. Supreme Court has determined in previous cases as recently as 2011. The atheists who filed this suit may have an axe to grind against religion, but as the 7th Circuit found, that doesn’t give them sufficient standing to challenge a tax benefit for which it has never applied and that has been provided to pastors for decades. The allowance many churches provide to pastors is church money, not government money. It is constitutional and should continue to be respected and protected.”

Stanley comments, in conjunction with the court’s ruling, makes it clear that either the FFRF wants to enjoy this tax benefit for themselves, or they simply have animus towards churches and pastors. Either way, I agree with Stanley that the housing allowance is constitutional and should be respected.

According to the Becket Fund for Religious Liberty the housing allowance serves three purposes: “It ensures that ministers are treated the same as similar nonreligious employees; it reduces tax discrimination among ministers from wealthy and poor denominations; and it keeps the government from making intrusive judgments about how ministers use their homes. Without the allowance, many minority or poor faith groups would have difficulty providing for their ministers.”

If removed, the loss of the housing allowance would affect some 45,000 pastors nationwide at a cost of $700 million dollars annually. Roughly 11% of pastors live in a parsonage, while 87% live in their own home. The impact of losing this critical tax benefit cannot be overstated.

Thankfully, for now, pastors and churches will continue to enjoy this helpful tax benefit. But we must be vigilant in defending it or we will certainly lose it. Many thanks to groups like Alliance Defending Freedom and the Becket Fund for Religious Liberty for aggressively defending pastors and churches in this matter.

More resources: ADF friend-of-the-court brief filed with 7th Circuit on behalf of more than 600 churches: Lew v. Freedom From Religion Foundation