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Seventh Circuit Rules the Clergy Housing Allowance is Constitutional

The Seventh Circuit has ruled that the clergy housing allowance is constitutional. Overturning the Wisconsin U.S. District Court, the court held that in applying the so-called Lemon test:

  1. The clergy housing allowance found in section 107(2) avoids the potential for excessive entanglement that could be occasioned by the fact-intensive inquiry required by the convenience of the employer exception found in section 119(a)(2). This provides a sufficient secular legislative purpose.
  2. Under the Supreme Court’s decision in Walzv. Tax Comm. of City of N.Y., 397 U.S. 664, 675 (1970), the clergy housing allowance is not a sponsorship of religion but rather the government abstaining from demanding that the church support the state. Stated differently, “the primary effect of § 107(2) is not to advance religion on behalf of the government, but to allow churches to advance religion, which is their very purpose.” (internal quotation marks removed)
  3. As previously stated, Congress’s enactment of section 107(2) serves to prevent excessive entanglement with religion.

In addition, the court found that the clergy housing allowance is one of many historical examples where Congress has exempted religious resources from taxation. This is in keeping with the Supreme Court’s holdings in other cases interpreting the Establishment Clause in “by reference to historical practices and understandings.”

Where to from here? We should expect the Freedom from Religion Foundation to seek relief from the Supreme Court. However, the Seventh Circuit’s finding that the statute is constitutional opens the way for the Supreme Court to not take up the case in favor of allowing the issue to play out further in the appellate courts.

We will probably know within the next 90 days or so whether the Supreme Court will agree to hear an appeal. If they reject the repeal, then the clergy housing allowance will stand until the next challenge.

Please contact us at [email protected] with any questions.

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