Law Firm Says Circuit Court is ‘Highly Receptive’ to Saving IRS Clergy Housing Allowance

The Court of Appeals for the Seventh Circuit seemed open to arguments against an atheist group’s lawsuit seeking to end a clergy housing tax allowance, according to a counsel with the religious liberty law firm Becket.

The Seventh Circuit heard arguments on Wednesday in the case of Gaylor v. Mnuchin, which centers on the Freedom From Religion Foundation attempt to have the IRS’ parsonage allowance declared unconstitutional.

Becket is representing Chris Butler, a pastor based in Chicago, Illinois who filed a declaration in the case, arguing that if the parsonage allowance is struck down, his ministry will be greatly harmed.

Joe Davis, counsel at Becket, told The Christian Post in an interview on Thursday that he believed the “court appeared highly receptive to our arguments.”

“We’re confident that the panel members will understand that the parsonage allowance is fair tax treatment for ministers, not a unique benefit, and that there’s no warrant for imposing crippling new taxes on churches and ministers across the country,” said Davis.

Becket estimates that if struck down, churches across the United States will be burdened with an estimated $1 billion in additional taxes.

Davis explained to CP that this estimate comes in part from a report by the U.S. Department of the Treasury, which “estimates the housing allowance at $0.97 billion for 2018, and expects that it will actually exceed $1 billion by next year.”

“Congressional estimates—for instance the Estimates of Federal Tax Expenditures for Fiscal Years 2016–2020, prepared by the Joint Committee on Taxation—likewise estimate the allowance at nearly a billion dollars annually,” added Davis.

In 2011, the FFRF filed a lawsuit against 26 U.S. Code § 107(2), a law passed in 1954 that gave an exemption on clergy housing allowance.

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Source: Christian Post