VICTORY: Court Rejects Atheist Attack on 60-Year-Old Housing Allowance for Ministers

Ruling protects ministers from up to $500 million in new taxes                                     

For Immediate Release: November 13, 2014
Media Contact:  Emily Hardman,, 202.349.7224

Washington, D.C.  Today a federal court of appeals rejected an atheist group’s lawsuit seeking to strike down a 60-year-old tax provision protecting ministers. The ruling allows ministers of all faiths to continue receiving housing allowances on the same terms as thousands of secular employees.

“This is a great victory for fair treatment of churches,” said Luke Goodrich, Deputy General Counsel of the Becket Fund of Religious Liberty. “When a group of atheists tries to cajole the IRS into raising taxes on churches, it’s bound to raise some eyebrows. The court was right to send them packing.”

For centuries, houses of worship have provided homes—called “parsonages”—for their ministers to ensure ministers can serve their congregation. These parsonages have been tax-free ever since Congress enacted the federal income tax in 1913. In 1954, Congress extended this tax exemption to cash housing allowances, much like it exempts cash housing allowances for thousands of nonreligious employees whose housing is controlled by their employer. This “parsonage allowance” serves three purposes: It ensures that ministers are treated the same as similar nonreligious employees; it reduces tax discrimination among ministers from wealthy and poor denominations; and it keeps the government from making intrusive judgments about how ministers use their homes. Without the allowance, many minority or poor faith groups would have difficulty providing for their ministers.

In 2011, the Freedom From Religion Foundation sued to end this tradition of religious accommodation. The Foundation did not seek a housing allowance for itself; instead, it sought to strike down the allowances for ministers across the country. Today, the Seventh Circuit rejected the lawsuit, concluding that the Foundation lacked “standing”—or a legal right to sue—because the Foundation was not seeking an allowance for itself. As the Court explained: “[A]bsent any personal denial of a benefit, the plaintiffs’ claim amounts to nothing more than a generalized grievance about [the parsonage allowance’s] unconstitutionality, which does not support standing.”

“For 60 years, the parsonage allowance has kept the Taxman from mucking around in complex religious questions,” said Goodrich. “Nobody wants the IRS taxing churches at the whim of atheists with no skin in the game.”

The Becket Fund for Religious Liberty filed an amicus brief on behalf of a diverse group of Eastern Orthodox, Hindu, Muslim, and Protestant religious organizations that would be harmed without the parsonage allowance. The brief explains how the parsonage allowance is just one of many tax-free housing benefits in the tax code, so it merely places ministers on the same footing as a wide variety of secular employees. In fact, the parsonage allowance makes up only a tiny percentage of housing allowances throughout the tax code.

The Becket Fund for Religious Liberty is a non-profit, public-interest law firm dedicated to protecting the free expression of all religious traditions. For over 20 years, it has defended clients of all faiths, including: Buddhists, Christians, Jews, Hindus, Muslims, Native Americans, Sikhs, and Zoroastrians. Its recent cases include two major Supreme Court victories: the landmark ruling in Burwell v. Hobby Lobby, and the 9-0 ruling in Hosanna-Tabor v. EEOC, which The Wall Street Journal called one of “the most important religious liberty cases in a half century.”

For more information, or to arrange an interview with one of the attorneys, please contact Emily Hardman, Communications Director, at or call 202.349.7224.


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