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Appeals Court Orders Dismissal of Lawsuit Challenging Constitutionality of Clergy Housing Allowance Exclusion

November 14, 2014

Yesterday, the United States Court of Appeals for the Seventh Circuit ordered dismissal of the lawsuit filed by atheists with the Freedom from Religion Foundation claiming that the clergy housing allowance exclusion is unconstitutional.  The case was on appeal by the U.S. government after a Wisconsin Circuit Court judge ruled in 2013 that the clergy housing allowance exclusion is unconstitutional.  The appeals court ruled that the plaintiffs in the case do not have “standing” to file the suit (i.e., they are not eligible to make such a legal claim), since they had not suffered injury or damages in connection with the housing allowance exclusion available to ministers.  The court said that in order for the plaintiffs to have standing for this issue, they must receive a housing allowance, treat it as exempt from income tax, and then be denied the exclusion by the IRS.  The plaintiffs had not done that.  So, the appeals court ordered that the case be dismissed.

The atheists with the Freedom from Religion Foundation have been a persistent group – filing multiple lawsuits against the federal government related to various aspects of religious accommodation.

Interestingly, the federal government made the argument in this case that it may be possible that the atheist leaders of the group could be considered the equivalent of ministers and that atheism could be considered a religion.  While there is no question that these atheists would like to see the clergy housing exclusion eliminated, it is not so clear that they will be able to achieve their goal.  If the atheist leaders do claim a clergy housing exclusion, and the IRS doesn’t deny it, they may have difficulty ever having standing to file a suit claiming that the allowance is unconstitutional.

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