Atheist Group Sues To End Housing Tax Breaks For Clergy

Clergy who live in church-owned housing do not pay taxes on that benefit. Clergy who own their own homes can write off their housing costs. The Freedom From Religion Foundation says these tax breaks violate the establishment clause of the Constitution and they have filed suit against the federal government to end the policy.

The Wisconsin-based Freedom from Religion Foundation says the housing exemption gives churches an unfair advantage because they can compensate their leaders with tax-free housing. Other nonprofits, such as the foundation, can't do that. So it's suing the federal government to outlaw the housing allowance. "We think the law is rotten at the core," said co-president Annie Laurie Gaylor. "It is not constitutional, it is not fair, and it is not necessary." But the exemption's supporters point to a similar court dispute in 2002 that went nowhere after Congress almost unanimously rushed to save the housing break. Dan Busby, who runs the watchdog group Evangelical Council for Financial Accountability, thinks Congress would do the same today. "I don't think this lawsuit is going anywhere," he said. "Both houses of Congress don't want to touch this." Busby says that losing the housing allowance would cause significant harm to churches and ministers — particularly those with small congregations. A minister who gets a $20,000 housing allowance, for example, saves about $6,000 a year in taxes, he said.

Opponents of the FFRF say that not funding a religion isn't the same as not collecting taxes and therefore does not constitute an endorsement. But critics point out that at many churches numerous employees are named as a "minister" of some degree in order to benefit from the tax break.