Court Hears Oral Arguments in Housing Allowance Case

The Seventh Circuit Court of Appeals in Chicago heard oral argument in the housing allowance case (Freedom From Religion Foundation vs. Lew) on Tuesday, September 9, 2014.

Art Rhodes, president of the Church of God Benefits Board, Inc., stated that from knowledgeable court room observers, there was agreement that the arguments to maintain the ministerial housing allowance, “went rather well and received a fair hearing from the appellate court. The attorney for the government, speaking in support of Section 107 of the Tax Code and in favor of keeping the housing allowance, was experienced and well-prepared, while the attorney for the FFRF seemed to have difficulties understanding the rapid-fire questions posed by the court and actually at one time agreed with one of the judges that the housing allowance was constitutional.”

Rhodes went on to say that from listening to the questions posed by the three-judge panel (Judges Rovner, Flaum and Hamilton), it was clearly obvious that the judges had read the briefs, including our amicus brief, and were ready with their questions. The questions seemed to reflect the judges understanding of the magnitude of the matter before them – and the potential impact that their decision could have on ministers.

During the opening argument, the government’s lawyer argued that the FFRF did not have standing (or the legal right) to challenge the constitutionality of Section 107(2) – the Tax Code provision that contains the ministerial housing allowance provision – and that even if they did, Section 107(2) was constitutional in any event. All three judges seemed receptive to both arguments. In fact, during the questioning Judge Hamilton picked up on one of the best arguments from the briefs by noting that allowing Section 107(1) to stand (Section 107(1) allows for tax-free parsonages) – and striking Section 107(2) (the ministerial housing allowance provision) – would impermissibly favor certain denominations or churches which use parsonages over those denominations which use cash for ministerial housing allowances.

Later, Judge Rovner even suggested that the ministerial housing allowance provision (Section 107(2)) could be viewed simply as a codification of many judicial holdings from before 1954 that permitted cash housing allowances under the parsonage provision (Section 107(1)).

The entire exchange between both sides and the three-judge panel lasted only about 35 minutes. While the arguments were somewhat technical based upon previous cases decided by the U.S. Supreme Court, some very practical points were made about the impact of holding the ministerial housing allowance unconstitutional.

“While court observers have differing opinions on how the Seventh Circuit might rule in this matter, it is expected that a decision could be handed down well before the end of 2014,” Rhodes continued. “With the judges expressing so much familiarity with the written arguments in the case, it is expected that they will release an opinion sooner rather than later. As soon as that opinion is released, we will advise you of such. In the meantime, due to the drastic impact that a ruling that the ministerial housing allowance is unconstitutional could have on active and retired ministers, this case should be a matter of prayer for us all.”

Print This Post Print This Post