Housing allowance weighed by appeals court

Baptist Press
Posted: Sep 09, 2014 5:22 PM
EDITOR'S NOTE: Baptist Press will run an extended story tomorrow (Sept.10).

CHICAGO (BP) -- The fate of the ministerial housing allowance rests for now with a federal appeals court.

The Seventh Circuit Court of Appeals in Chicago heard oral arguments Tuesday (Sept. 9) regarding the portion of a 1954 law that allows clergy to exclude for federal income tax purposes a portion or all of their gross income as a housing allowance. A federal judge in Wisconsin struck down the allowance in November.

Three entities of the Southern Baptist Convention have joined other religious organizations in urging the Seventh Circuit Court to reverse the ruling of Barbara Crabb, who said the allowance violates the First Amendment's prohibition of government establishment of religion.

The Ethics & Religious Liberty Commission and the International Mission Board signed onto a friend-of-the-court brief with a diverse array of religious organizations in support of the housing allowance. GuideStone Financial Resources, the SBC's financial and health benefits entity, joined in a brief with other denominational benefit boards as part of the Church Alliance. Both briefs were filed in April.

ERLC President Russell D. Moore told Baptist Press, "The clergy housing allowance is not a government establishment of religion, but just the reverse. It does not show preference towards any religion, but is neutral towards all.

"More than that, eliminating the allowance would have the effect of penalizing thousands of small congregations and their leaders across the country," Moore said in a written statement. He added that the ERLC is "proud" to stand with GuideStone and the IMB on this issue and said he hopes "the Seventh Circuit will overturn the district court's previous decision."

In issuing her decision, Crabb, a judge in the western district of Wisconsin, blocked enforcement of the ruling until the appeals process is complete. The Obama administration appealed Crabb's decision to the Seventh Circuit.

The brief endorsed by the ERLC and IMB -- and filed by the Becket Fund for Religious Liberty -- tells the appeals court the ministerial housing allowance is both equitable and admirable. Eliminating the allowance, the brief contends, would "needlessly entangle courts in religious questions; create discrimination among religions; and insert the government into important decisions about the relationship between a church and its ministers."

At its website, GuideStone describes the housing allowance as "the most important tax benefit available to ministers."

The allowance has been especially helpful to smaller congregations, because their pastors or ministers -- who typically receive lower salaries -- benefit from part of their income being non-taxable.

The case is Freedom From Religion Foundation v. Lew. The FFRF, which is based in Madison, Wis., sued the Internal Revenue Service regarding the housing allowance. Jacob Lew is secretary of the Department of the Treasury.

Compiled by Tom Strode, Washington bureau chief for Baptist Press, the Southern Baptist Convention's news service. BP reports on missions, ministry and witness advanced through the Cooperative Program and on news related to Southern Baptists' concerns nationally and globally. Get Baptist Press headlines and breaking news on Twitter (@BaptistPress), Facebook (Facebook.com/BaptistPress) and in your email (baptistpress.com/SubscribeBP.asp).

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