The Minister's Housing Allowance: Should It Stand, and If Not, Can Its Challengers Show Standing?

Abstract

On November 13, 2014, ministers across the United States were able to breathe a collective sigh of relief. On that day the Seventh Circuit vacated a lower court judgment that held that tax exclusions granted exclusively to “ministers of the gospel” violated the Establishment Clause and were therefore unconstitutional. The Seventh Circuit declined to rule on whether the tax exclusions for ministers violated the Establishment Clause; instead, Circuit Judge Joel Martin Flaum, writing for a three-judge panel, held only that the plaintiffs in the case lacked standing to challenge the tax provisions. Section 107 of the Internal Revenue Code contains two provisions that allow “ministers of the gospel” to deduct from their income the rental or mortgage value of a home as well as the cost of utilities and maintenance for the home. Section 107(1) (hereinafter the Parsonage Allowance) allows ministers to deduct from their income the value of a house provided to the minister by the church or religious organization. Section 107(2) (hereinafter the Minister’s Housing Allowance) allows ministers who are not provided a home by their church or religious