IRS rule allowing tax deduction for church parsonages is constitutionalMay 6, 2002
Section 107 of the Internal Revenue Code "readily satisfies" the
Supreme Court's test of whether a law violates the Establishment Clause of the
First Amendment, according to a Becket Fund amicus curiae brief filed with the
9th U.S. Circuit Court of Appeals (PDF format, 138K). The provision exempts
the provision of residential housing for clergy from federal income tax. The
81 year-old law is at issue in a case now before the 9th Circuit.
The Becket Fund brief explains that the Supreme Court's Lemon test, as modified
in Agostini v. Felton , requires courts deciding on the constitutionality of
a law involving religion to examine whether a statute has a secular purpose,
and whether it has the primary effect of advancing religion. IRC § 107
clearly has a secular purpose, the brief argues, because it is simply part of
a larger section of tax law that provides that "employees who receive lodging
for the convenience of any employer should not be taxed on the value of that
lodging." Second, the provision does not advance religion. "It merely
reduces the potential for church-state entanglement, with less intrusion and
oversight by the IRS as to how religious organizations carry out their missions."
It also "reduces the risk of preferring certain types of religious assemblies
over others," since it allows the tax exemption both for properties owned
by a church or pastor (the more likely situation with older, established churches)
and those rented by a church or pastor (more common in newer, less established
churches).
Not only is IRC § 107 clearly the kind of legislative accommodation of
religion that the Supreme Court has often found constitutional, it is also the
sort of legislative provision that "follows the best of our traditions,"
to use the words of Justice William O. Douglas in the 1952 decision Zorach v.
Clauson . Moreover, in recent cases, such as Employment Division v. Smith ,
the court has made clear that "legislatures, rather than the courts, bear
primary responsibility for protecting free exercise."
The question of whether IRC § 107 violates the Establishment Clause was
not raised by parties to the lawsuit, Warren v. Commissioner of Internal Revenue
. A divided three judge panel raised the issue sua sponte , and asked a University
of Southern California law professor well known for his negative view of such
laws to draft arguments why the law should be reviewed and/or overturned.
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