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Lawsuit Challenging Clergy Housing Allowance Dropped

June 24, 2011

In 2009, the atheist group ” Freedom from Religion Foundation” filed a lawsuit challenging the constitutionality of Sections 107 and 265(1)(6) of the federal tax code, which establishes the housing allowance for ministers. Their argument stated that the unique benefit set aside for “ministers of the gospel” is a violation of the separation of church and state.

On Friday, June 17, 2011,  this legal challenge to the clergy housing allowance was voluntarily dismissed in a California U.S. District Court. The reason the lawsuit was dropped was due to the fact that the atheist group was not directly affected by Sections 107 and 265(1)(6) of the federal tax code and therefore they do not have the standing to challenge it.

Note: Section 107 of the federal tax code relates to “ministers of the gospel” receiving a housing allowance. Section 265(1)(6) of the federal tax code allows “ministers of the gospel” to deduct their mortgage interest and real estate taxes on Schedule A in addition to using those expenses as housing allowance expenses.

Clergy Financial Resources
http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.

To learn more about our services, please visit the links below:

Tax Preparation
http://www.clergytaxnet.com/taxprep.htm

Mortgage Financing
http://www.clergytaxnet.com/clergy_financial_mortgage.htm

Church Payroll
http://www.clergytaxnet.com/payroll/churchpayroll.html

Clergy/Church Tax Law Products
http://www.clergytaxnet.com/online_store.htm

Clergy should not view this information as a substitute for professional advice. This information is subject to change, due to administrative rulings or interpretations and or technical corrections by the IRS. If legal advice or other expert assistance is required, the services of a competent clergy tax professional person should be sought.

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From → Clergy Tax Law

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