Arguments Heard in Challenge To Tax Exemption for Clergy

This week, the Seventh Circuit Federal Appeals Court heard oral arguments in Lew v. Freedom from Religion, a constitutional challenge to tax exemptions for cash allowances made to clergy members.

“This case would have an immediate effect on houses of worship nationwide, which presently save an estimated half-billion dollars yearly with this exemption,” said Luke Goodrich of the Becket Fund for Religious Liberty in an interview with Hamodia.  “If upheld, this would hurt their ability to provide services, as well as threaten dozens of other similar exemptions.”

The Becket Fund’s mission statement announces its goal as “to protect religious expression of all faiths.”

Freedom from Religion (FFR), a self-described atheist group dedicated to ensuring separation of religion and state, has brought legal action against the United States government, claiming that clause 107, 2, which grants tax-exempt status to cash allowances for clergymen’s housing, violates the First Amendment’s Establishment Clause, guaranteeing separation of church and state.

At the heart of the issue is that while the first part of the clause, 107,1, exempts “in-kind” housing, that is, allowing the clergyman to use an actual house, the law in question, 107, 2, exempts cash that is given to clergy to pay for housing, a condition restricted to more specific professions  where the location of practitioners is essential to the performance of their jobs.

In a Friend of the Court brief filed by attorney Nathan Lewin, he argued that this issue is of particular relevance to Rabbis and cantors who must live near their places of work due to a combination of the restriction of travel on Shabbos and Yom Tov, and heavy weekday duties.

Earlier this year the objection was upheld by district Judge Barbara Crabb, who stated “absent the most unusual circumstances, one’s religion ought not effect one’s legal rights or duties or benefits.”

In this week’s appeal session, Justice Department counsel Judith Hagley argued the government’s case, first by denying FFR standing, i.e., the right to file their suit in the first place.

“They have not applied for this exemption and have not been denied,” Hagley told the court.  “Personal denial is required to show actual injury.”

The plaintiffs, FFR’s executives, claim they are discriminated against, since their $5000 housing allowances are not tax exempt.

Ms. Hagley went on to deny that 107, 2 violates the Establishment Clause, arguing that it does not discriminate between religious groups and only seeks to equalize remuneration of clergy with that of secular jobs; soldiers overseas get similar help, as they too need to reside in a specific location due to the nature of their work.

The court is expected to issue a ruling on the matter within the next few weeks.

“This law gives an unconstitutional preference to religion over non-religion,” said Andrew Seidel of FFR in a conversation with Hamodia.  “If this would apply to all non-profits and include religious ones as well, that would not be a problem.”

One of the judges at the session directly challenged the basic nature of FFR’s understanding of the constitutional issue at hand, asking “Isn’t not favoring any specific religion non-discriminatory enough?”

Mr. Goodrich backed up this claim, pointing to several precedent cases illustrating that the Establishment Clause “does not require neutrality between religion and non-religion.”