The ongoing litigation over the constitutionality of the clergy housing exclusion has taken a fascinating turn. According to attorneys for the U.S. Department of Justice, not only is the law constitutional, but atheists might also be considered religious leaders for purposes of federal tax law (“ministers of the gospel”) to qualify for the exclusion.
In its latest court challenge to the clergy housing exclusion, the Freedom From Religion Foundation (FFRF) is alleging that the tax provision and the manner in which it is administered by the Treasury Department and the IRS violates the First Amendment’s Establishment Clause and the Constitution’s Due Process Clause. In a direct effort to bring a challenge to the law, FFRF began designating housing allowances in 2011 for its co-presidents. FFRF assumed that since its leaders did not self-identify as “ministers” in the traditional sense they would not be entitled to exclude their designated housing allowances for income tax purposes, theoretically resulting in discrimination based on religious criteria.
After the federal district court refused an earlier request by the government to dismiss the case, the government filed a motion for summary judgment defending the constitutionality of the clergy housing exclusion and arguing that FFRF and its leaders lack standing required to bring the lawsuit. The government explained that, although FFRF had designated housing allowances for its leaders, they never followed through in claiming the exclusion with the IRS. Furthermore, if they had tried to claim the clergy housing exclusion, it is possible that FFRF’s leaders could have met the criteria necessary to qualify: “[T]he facts here illustrate that it is conceivable that an atheist who does things that [FFRF’s leaders] do in light of their personally held beliefs and in the course of their employment could meet the requirements for the exclusion in § 107(2), including the definition for ‘minister’ under its terms.”
The government then devoted over 10 pages of its court brief to outlining how an atheist leader could conceivably meet the tax law definition of a minister and therefore receive a housing exclusion under Section 107 of the tax code. The argument began, “Non-theistic beliefs, including atheism, may qualify as ‘religious’ beliefs in various contexts because they pertain to religion and fulfill a similar role in a person’s life.” According to the government, legal precedent dictating who is a minister for tax law purposes “utilizes factors that do not inherently preclude an atheist from claiming an exclusion under § 107(2)” and “[b]ecause atheism has been considered a religion, it is possible than an atheist might qualify for status as a minister under § 107(2).”
FFRF filed its own brief in late July rejecting the government’s suggestion that its leaders might qualify for the clergy housing exclusion and calling for the court instead to nullify the statute.
The government’s reply to FFRF is due by August 12, according to the court docket of the U.S. District Court for the Western District of Wisconsin (Case#: 3:11-cv-00626). For more information, see the Department of Justice’s Motion for Summary Judgment Against FFRF and FFRF’s Brief in Opposition.
Stay tuned to ECFA’s “In the News” page for the latest developments in the case.