Clergy Parsonage Allowance Under Attack

In a decision released November 22, 2013, U.S. District Judge Barbara B. Crabb of the Western District of Wisconsin held that a portion of Section 107 of the tax code (the provision dealing with the clergy housing allowance is unconstitutional). Specifically, Section 107(2), which permits clergy to receive a tax-free cash housing allowance was found to violate the establishment clause of the First Amendment. Section 107(1), which allows clergy tax-free use of a church-provided parsonage, was left intact.

A copy of the case is attached, and for convenience, I have copied the judge’s order below. As you can see from the order, the judge’s injunction against the government does not take effect until the conclusion of any appeal by the government (or the deadline for appeal passes).




1. The motion for summary judgment filed by defendants Timothy Geithner and Douglas Schulman (now succeeded by Jacob Lew and Daniel Werfel), dkt. #40, is GRANTED with respect to plaintiffs’ Freedom from Religion Foundation, Inc.’s, Annie Laurie Gaylor’s and Dan Barker’s challenge to 26 U.S.C. § 107(1). Plaintiff’s complaint is DISMISSED as to that claim for lack of standing.

2. Defendants’ motion for summary judgment is DENIED as to plaintiffs’ challenge to 26 U.S.C. § 107(2). On the court’s own motion, summary judgment is GRANTED to plaintiffs as to that claim.

3. It is DECLARED that 26 U.S.C. § 107(2) violates the establishment clause of the First Amendment to the United States Constitution.

4. 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.

5. The clerk of court is directed to enter judgment in favor of plaintiffs and close this case.

Entered this 21st day of November, 2013.

BARBARA B. CRABB District Judge