Appeals court stops atheist effort to nix clergy tax break

An appeals court Thursday tossed out an anti-religion group’s lawsuit challenging a tax exemption for clergy. The 7th U.S. Circuit Court of Appeals ruled the benefit for ministers of all faiths, which allows them to receive a tax-free housing allowance, was not hurting members of the atheist Freedom From Religion Foundation (FFRF), so they did not have standing to sue.

“A plaintiff cannot establish standing based solely on being offended by the government’s alleged violation of the Establishment Clause,” the 7th Circuit ruled, meaning the FFRF can’t sue the government just because it doesn’t agree with the tax code. It has to show that the law personally harms its members.

“The atheists who filed this suit may have an axe to grind against religion, but, as the 7th Circuit found, that doesn’t give them sufficient standing to challenge a tax benefit for which it has never applied and that has been provided to pastors for decades,” said Erik Stanley, senior counsel with Alliance Defending Freedom, which filed a brief in the case on behalf of more than 600 churches.

The federal government instituted the tax-free clergy housing allowance in 1954 based on a history of allowing tax breaks for employees whose jobs dictate their living situations. Military families who move to new assignments, hotel managers who must live onsite, commercial fishermen who must live on a ship, and Peace Corps volunteers and CIA operatives who live overseas all benefit from tax-exempt housing allowances.

Last year, U.S. District Judge Barbara Crabb in Madison, Wis., ruled the housing exemption was an unconstitutional government endorsement of religion. “The exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise,” Crabb wrote.

Crabb has a history of anti-religion rulings. In another lawsuit in 2010—this one also brought by the Freedom From Religion Foundation—she ruled the National Day of Prayer was unconstitutional. The 7th Circuit overturned that ruling, too.

Still, the Madison-based FFRF vowed to keep challenging what it called an “indefensible favoritism for religion.” It argued the 7th Circuit’s ruling on standing was a cop-out, and that the question of the tax exemption’s constitutionality remains unanswered.

Family Research Council President Tony Perkins disagreed, saying historical precedent supports giving tax breaks to religious workers. “Going back to Patrick Henry in 1785, society has tried to relieve the clergy’s housing burden because of the tremendous social benefits churches offer the culture and because so many clergy, despite their exceptional educations, receive only modest salaries,” Perkins said in a statement.