Freedom From Religion Foundation v Lew: What Now? (New Links Added)

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For elders and parishioners and not infrequently for ministers, clergy taxes are one of the more difficult aspects of ministerial finances. Those difficulties just became potentially greater last week. The United States District Court for the Western District of Wisconsin ruled that a 1954 law allowing a minister to deduct the rental value of his home is in violation of the First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The law, 26 USC §107(2) says:

In the case of a minister of the gospel, gross income does not include—
(1) the rental value of a home furnished to him as part of his compensation; or
(2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.

The law was introduced, in 1953, by Congressman (D-IL) Peter F. Mack, who argued:

On March 26 of this year, I introduced H.R. 4275 to permit clergymen to exclude from gross income that amount paid to them by a church specifically in lieu of furnishing them a dwelling house. Under our present tax laws, section 22(B), persons who are furnished a dwelling house in connection with their occupation must include within gross income for tax purposes the rental value of such dwelling. Subsection (6) exempts clergymen therefrom. In most cases such dwelling house is the parsonage, manse or parish house. yet where the church does not furnish its clergy a dwelling house because it does not own one or because of other circumstances, the sum of the money paid by the church to the clergymen specifically in lieu of furnishing him a dwelling much be included in gross income and taxed in the usual graduated manner. If enacted, my proposal would remove this inequity and permit all clergymen to exclude from gross income that part of a specific rental allowance up to the rental value of the rental house actually occupied.

Mr. Chairman, I hope that your committee will favorably report this bill at a very early date. Certainly in these times when we are being threatened by a godless and antirelgion world movement we should correct this discrimination against certain ministers of the gospel who are carrying on such a courageous fight against this foe. Certainly this is not too much to do for these people who are caring for our spiritual welfare.1

This section of the code has been challenged, e.g., IRS v Driscoll in 2012, over whether a minister may claim an exemption for more than one home. Erwin Chemerinsky (familiar to listeners of the Hugh Hewitt radio program), who teaches law at UC Irvine and who filed an amicus brief on behalf of the Freedom From Religion Foundation, mentions Warren v Commissioner of IRS (2002), in which the IRS complained that Rick Warren, pastor of Saddleback Community Church in Orange County, CA, was claiming more than the fair rental value of his home. This case was heard in the notorious ninth circuit but was made moot by the Clergy Housing Allowance Clarification Act” of 2002. As a result Warren was protected for the years prior to 2002, but thereafter he would have to adjust his practice to conform to the IRS demands.

On November 22, 2013, the court ruled:

§ 107(2) [“In the case of a minister of the gospel, gross income does not include … the rental allowance paid to him as part of his compensation.”] violates the establishment clause under the holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), because 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. … Because a primary function of a “minister of the gospel” is to disseminate a religious message, a tax exemption provided only to ministers results in preferential treatment for religious messages over secular ones. … [I]f Congress believes that there are important secular reasons for granting the exemption in § 107(2), it is free to rewrite the provision in accordance with the principles laid down in Texas Monthly and Walz so that it includes ministers as part of a larger group of beneficiaries. … As it stands now, however, § 107(2) is unconstitutional (via Paul L. Caron, Pepperdine University School of Law)

Here is the Lew decision itself. Here is the argument in defense of the code by United States Attorney for the Western District of Wisconsin, John W. Vaudreuil.

One of the questions that often comes up in the Ancient Church (patristics) course is why the Fathers were relatively more interested in Christian morality and ethics than in doctrine. One obvious reason is the clear teaching of our Lord and the Apostles on this. Another practical reason was likely that it was important for the early post-apostolic Christians to keep a low profile to in order to be able to worship in peace. When, in the 2nd and 3rd centuries, Christians came to the attention of secular authorities, the outcome was usually not good for the Christians. So, it is interesting that Gabriel O. Aitsebaomo argues that it was the sex scandals among the tel-evangelists of the 1980s (e.g., Jimmy Swaggart, Jim and Tammy Bakker) that drew attention to this section of the code He argues that 107(2) violates the tests established in Lemon v Kurtzman (1971), viz.:

  1. “The statute must have a secular legislative purpose”
  2.  the “principal or primary effect” of the statute “must be one that neither advances nor inhibits religion”
  3. “the statute must not foster an excessive governmental entanglement with religion”

I have consulted a couple of Christian attorneys about this to ask a couple of questions: 1) Is it correct to say that this ruling only affects the Western District of Wisconsin? So far, the answer has been yes. 2) If this ruling stands, does it then become precedent for future such cases? Again, the answer seems to be yes.

What seems to be different about this case, in contrast to earlier such challenges to 107(2) is that the FFRF was able to establish standing before the court. They were able to show that they suffer harm by being excluded from this provision.


  1. Whither clergy tax law after FRFF v Lew?
  2. If this ruling is not overturned and if 107(2) is overturned nationally, will ministers be forced back into parsonages? Ministerial compensation, particularly in NAPARC congregations, is typically low. Further, NAPARC congregations have been known to estimate the value of the parsonage to the minister shall we say generously.
  3. What will be the financial effect on congregations and ministers? Christianity Today says ministers report that 107(2) accounts for $20,000–$30,000 annually in compensation.
  4. Does “excessive entanglement” cut both ways?
  5. When does ostensible neutrality become hostility to religion?
  6. Did the the US Attorney for the Western District of WI make the strongest possible case for 107(2)?
  7. Could the nullification of 107(2) be a blessing for churches?

Critics of 107(2) argue that the appeal by congressman Mack shows that the intent of the law was never secular but I am not sure that follows. Yes, there is an appeal to the necessity of civil religion and a warning about the (very real) dangers of communism but the basic intent was equity with (then) current law. It doesn’t take much imagination to think that organizations such as FRFF will next pursue ministers who live in parsonages (manses). What then?


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  1. The Lemon Test has previously provided Justice Scalia the opportunity to pen one of the greatest paragraphs in the history of Supreme Court decisions:

    “Like some ghoul in a late-night horror movie that repeatedly sits up in its grave and shuffles abroad, after being repeatedly killed and buried, Lemon stalks our Establishment Clause jurisprudence once again, frightening the little children and school attorneys of Center Moriches Union Free School District. Its most recent burial, only last Term, was, to be sure, not fully six feet under: Our decision in Lee v. Weisman conspicuously avoided using the supposed test but also declined the invitation to repudiate it. Over the years, however, no fewer than five of the currently sitting Justices have, in their own opinions, personally driven pencils through the creature’s heart (the author of today’s opinion repeatedly), and a sixth has joined an opinion doing so. The secret of the Lemon test’s survival, I think, is that it is so easy to kill. It is there to scare us (and our audience) when we wish it to do so, but we can command it to return to the tomb at will. Such a docile and useful monster is worth keeping around, at least in a somnolent state; one never knows when one might need him.”

    From Lamb’s Chapel v. Center Moriches Union Free School District, 508 U.S. 384, 398-99 (1993).

  2. The ruling doesn’t affect anyone so far. The judge stayed the ruling until all the appeals are completed: “Defendants are ENJOINED from enforcing § 107(2). The injunction shall take effect at the conclusion of any appeals filed by defendants or the expiration of defendants’ deadline for filing an appeal, whichever is later” (pg. 43 of decision).

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