Ministerial Housing Allowance Held Unconstitutional

As expected, a federal district court judge in Wisconsin has ruled that the ministerial housing allowance violates the Constitution. However, according to Art Rhodes, President and CEO of the Church of God Benefits Board, Inc., the ruling only deals with the housing allowance where ministers are provided cash to rent or purchase a home, and leaves fully intact, at least for now, the tax-free use of parsonages.

In the ruling dated October 6, 2017, Judge Barbara Crabb held that Section 107(2) of the Tax Code, the provision that specifically addresses the “cash” ministerial housing allowance, violates the Establishment Clause of the First Amendment, simply because it does not have a secular purpose or effect, and because it singles out “ministers of the Gospel” for special tax treatment not available to others.

Although Judge Crabb ruled that the ministerial housing allowance was unconstitutional, she did not immediately implement a ruling as to what is supposed to happen next. The judge has given all parties until October 30 to respond as to how they think her ruling should be implemented.

“Regardless of the implementation of ‘remedies’ by Judge Crabb, the unconstitutional determination will be appealed to the Seventh Circuit Court of Appeals in Chicago, continuing a legal battle that ultimately could end up before the U. S. Supreme Court,” Rhodes stated. “It is expected that the Church of God International Offices and the Church of God Benefits Board will file a ‘friend of the court’ brief in support of maintaining the housing allowance once the case reaches the appellate court.

To read the entire decision of the district court in Gaylor vs. Mnuchin, please contact [email protected]

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