The case, Freedom From Religion Foundation v. Geithner, was originally filed in 2009. The plaintiffs voluntarily dismissed the suit in light of a U.S. Supreme Court decision earlier this year. In that case, Arizona Christian School Tuition Organization v. Winn, the court ruled on an issue of standing, a legal concept that only parties who have been directly harmed by a statute can challenge its constitutionality.
Because the plaintiffs in the most recent case are not directly impacted by Section 107 of the Internal Revenue Code – the section that governs the housing allowance exclusion – they do not have the standing to challenge it. Experts say the court’s ruling will make future challenges more difficult.
Advocates for maintaining the allowance said eliminating the exemption would add little revenue for the government, but would be devastating to churches that could not otherwise afford to pay a minister’s salary. The exemption allows “ministers of the gospel” to exclude some or all of their ministerial income – as designated by their church or church-related employer – as a housing allowance from income for federal income tax purposes.
To learn more about the housing allowance, visit the IRS website.
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