The challenge to the minister's housing allowance tax exclusion was dismissed Friday, June 17, in the Federal District Court for the Eastern District of California in Sacramento.
The case, Freedom From Religion Foundation v. Geithner, was originally filed in 2009. The case was voluntarily dismissed by the plaintiffs in light of a U.S. Supreme Court decision in 2011 on the issue of standing, a legal concept that only parties who have been directly harmed by a statute can challenge its constitutionality. Because the plaintiffs are not directly impacted by Section 107 of the Internal Revenue Code -- the section that governs the housing allowance exclusion -- they do not have the standing to challenge it.
"This is the most recent challenge to the minister's housing allowance exclusion," said O.S. Hawkins, president of GuideStone Financial Resources. "We remain committed to making known to Congress the importance of the minister's housing allowance and will continue to work with other church pension boards in Washington to keep this important tax benefit for ministers."
The minister's housing allowance is among the most important tax benefits available to ministers. Section 107 of the Internal Revenue Code allows "ministers of the gospel" to exclude some or all of their ministerial income -- as designated by their church or church-related employer -- as a housing allowance from income for federal income tax purposes. Rules and limits are discussed in a special Q&A on GuideStone's website, www.GuideStone.org/housingallowance.
"GuideStone, along with other denominational pension boards, filed friend-of-the-court briefs in another case in 2002 challenging the constitutionality of the housing allowance exclusion, and we continue to work to ensure the housing allowance is maintained for all pastors," Hawkins said. "We are especially aware of how important this benefit is to those pastors at the crossroads, in rural areas where their housing and lower income would make a new tax burden particularly onerous."
While there are no further challenges to the housing allowance exclusion in process, GuideStone remains vigilant, Hawkins said.
"Moving forward, we can expect more challenges, either through other court cases or through the legislative process, to the housing allowance exclusion," he said. "One of the sacred trusts we have at GuideStone is to stand as an advocate for the pastors we serve. We also serve as advocates with churches in helping them understand the most advantageous way to develop a compensation plan, as well as within the corridors of power in Washington and elsewhere. It is our privilege to help serve those who serve the Lord in these important matters."
Roy Hayhurst is editorial services manager for GuideStone Financial Resources of the Southern Baptist Convention.
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