fate of the ministerial housing allowance rests for now with a federal appeals
The Seventh Circuit Court of Appeals in Chicago heard oral arguments on September 9 regarding the portion of a 1954
law that allows clergy to exclude for federal income tax purposes a portion or
all of their gross income as a housing allowance. A federal judge in Wisconsin
struck down the allowance in November.
Three entities of the Southern Baptist Convention have joined other religious
organizations [including the Seventh-day Adventist Church] in urging the Seventh Circuit Court to reverse the ruling of
Barbara Crabb, who said the allowance violates the First Amendment's
prohibition of government establishment of religion.
The Ethics & Religious Liberty Commission and the International Mission
Board signed onto a friend-of-the-court brief with a diverse array of religious
organizations in support of the housing allowance. GuideStone Financial
Resources, the SBC's financial and health benefits entity, joined in a brief
with other denominational benefit boards as part of the Church Alliance. Both
briefs were filed in April.
ERLC President Russell D. Moore told Baptist Press, "The clergy housing
allowance is not a government establishment of religion, but just the reverse.
It does not show preference towards any religion, but is neutral towards all.”
"More than that, eliminating the allowance would have the effect of
penalizing thousands of small congregations and their leaders across the
country," Moore said in a written statement. He added that the ERLC is
"proud" to stand with GuideStone and the IMB on this issue and said
he hopes "the Seventh Circuit will overturn the district court's previous
In issuing her decision, Crabb, a judge in the western district of Wisconsin,
blocked enforcement of the ruling until the appeals process is complete. The
Obama administration appealed Crabb's decision to the Seventh Circuit.
The brief endorsed by the ERLC and IMB -- and filed by the Becket Fund for
Religious Liberty -- tells the appeals court the ministerial housing allowance
is both equitable and admirable. Eliminating the allowance, the brief contends,
would "needlessly entangle courts in religious questions; create
discrimination among religions; and insert the government into important
decisions about the relationship between a church and its ministers."
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The Seventh-day Adventist Church through its Office of General Counsel continues to work with other faith groups to protect this long standing an important benefit. As the friend of court brief we filed along with other denominations explained, we believe this provision of the tax code to be fully constitutional. Office of General Counsel is hopeful that the Seventh Circuit Court of Appeals will reverse this erroneous decision. The church will continue to monitor this matter and take appropriate steps to protect the church and its workers.
Todd R. McFarland, associate general counsel