Appeals court upholds constitutionality of minister’s housing allowance in tax code

CHICAGO – The U.S. Court of Appeals for the 7th Circuit affirmed Friday that a provision in the federal tax code which keeps the Internal Revenue Service from taxing housing money that churches provide to ministers is constitutional. Alliance Defending Freedom attorneys filed a friend-of-the-court brief with the 7th Circuit in the case, Gaylor v. Mnuchin, on behalf of 8,899 ministers and churches defending the minister’s housing allowance.

“As the 7th Circuit correctly found, declining to tax the housing support money that congregations provide to their ministers is not in any way a government establishment of a particular religion or any religion,” said ADF Senior Counsel Erik Stanley, director of the ADF Center for Christian Ministries. “The power to tax is the power to destroy, and so refusing to tax a minister’s housing expenses is simply the best way to ensure the free exercise of religion and prevent the excessive entanglement of government with religion.”

“In addition, our brief demonstrated just how many ministers would be directly and negatively affected if those attacking the housing allowance were to prevail. The 7th Circuit was certainly right to recognize ‘that the survival of many congregations hangs in the balance,’” Stanley said.

“Providing a tax exemption does not ‘connote sponsorship, financial support, and active involvement of the government in religious activity…,’” the 7th Circuit wrote in its opinion. “Congressional action to minimize governmental interference with the decision-making process in religions…does not violate the Establishment Clause.”

Alliance Defending Freedom is an alliance-building, non-profit legal organization that advocates for the right of people to freely live out their faith.

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