Capin Crouse provided an article to me which explains the latest court ruling on the Minister’s Housing Allowance. If this holds up it could radically change the financial landscape of many pastors in the United States.
I have summarized the summary that Capin Crouse provided me.
Important Minister’s Housing Allowance Update
On Friday, November 22, Judge Barbara Crabb in the Western District of Wisconsin declared the minister’s housing allowance unconstitutional in a case brought by the Freedom From Religion Foundation (FFRF). The decision may ultimately have a substantial financial impact on ministers and the churches and other ministries that employ them. The decision will certainly be appealed, however, and enforcement will be delayed until all appeals are final.
The decision did not affect the exemption from taxation of a church-provided parsonage. The court dismissed that challenge. The court did not, however, hold that the parsonage is constitutional. Rather, since the FFRF did not actually attempt to provide parsonages to its employees, the FFRF did not have standing to say its employees had been discriminated against. Consequently, for the time being there is no case challenging, or decision holding, that minister housing provided by churches (other organizations) must be taxed.
The ruling will undoubtedly be appealed. A Federal District Court is the lowest general purpose court in the federal court system. Its decisions may be appealed to the appropriate Circuit Court of Appeals, which in this case is the Seventh Circuit. A decision of the Seventh Circuit Court of Appeals may be appealed to the United States Supreme Court. It will be years before a final decision is made.
This court’s ruling of unconstitutionality will not be enforced until the final appellate decision is issued.
It is important to note that:
- The minister’s housing allowance exclusion may continue, just as it has, for at least 2014 (and probably sometime beyond that, while the appeals are in process).
- Ministers and organizations employing ministers should continue to monitor the decisions in this area.