A group of Chicago pastors are speaking up on behalf of clergy everywhere in America in their latest federal appeals court effort fighting against a lawsuit that they say could cost houses of worship as much as $1 billion in new taxes.
The non-profit law firm Becket explained in a press release last week that Pastor Chris Butler of Chicago Embassy Church went before an appeals court on Thursday in the latest chapter of the Gaylor v. Mnuchin case, looking for a reversal on an earlier decision that went against the clergy.
The case is significant, because the Freedom From Religion Coalition is suing the IRS in the hopes of ending a 64-year-old federal tax provision, the ministerial housing tax exemption, that allows faith leaders to receive tax-free housing allowances.
The tax benefit is for leaders of any faith, not just Christian. The provision was inserted into the tax code to correct an inequity in the law for those whose job requires that they live in a particular location. Other allowances provide help to teachers, business leaders, military service members and other similarly situated workers to receive tax-free housing for their jobs.
John Stonestreet and Robert Rivera explained in a recent Breakpoint broadcast, "The exemption predates the Internal Revenue Code, which was enacted in 1954. In fact, its origins had little to do with religion. It grew out of what is known as 'the convenience of the employer' doctrine. This doctrine applied to 'employees who had very little say in the place of their residence or where they ate meals.' Beside ministers, the doctrine has benefited, among others, ranch hands, innkeepers, military personnel, even the President of the United States."
Butler said he would face financial difficulty without the tax benefit.
"For the majority of churches, the pastors are like me and experience at some level the same problems that we're trying to face in the community. If you take away even a little bit, it can become a lot of trouble quickly," he said.
A three-minute YouTube video on the case released by Becket in February explains that pastors like Butler are working in some of the most at-risk areas in Chicago and in the country, fighting high rates of community violence, helping youth and the homeless.
As Butler says in the video, all that could be impacted if FFRF is victorious in getting the IRS to remove clergy from the allowance.
"The impact could be huge for communities, especially the communities where we work and serve, where folks need all the help that they can get," he warned.
FFRF, whose case against the IRS has been ongoing since 2011, argues on its website that the housing allowance allows clergy assistance not only for rent and mortgage, but also for home improvements, including cable TV and home decor.
The atheist group states that this "directly benefits ministers and churches, most significantly by lowering a minister's tax burden, while discriminating against the individual plaintiffs, who as the leaders of a nonreligious organization opposed to governmental endorsements of religion are denied the same benefit."
Bishop Ed Peecher, who founded Chicago Embassy Church, explains in the Becket video why pastors need the rent allowances to continue helping the city.
"Our mission is to engage the city, to collectively wrap our arms around the city. Every program, everything that we do has to pass through that matrix — is it going to make a difference in the city, are we going to communicate the truth of the Gospel, is someone going to be helped?" he pointed out.
Peecher argued that those looking to take away the allowance are people "who don't live in the community, who want to stifle what we do, the issues that we address without lifting a finger to help us."
Luke Goodrich, deputy general counsel at Becket, argued that if the IRS is forced to end the tax exemption for faith leaders, it would be discriminating against religious groups.
"The same group of atheists claimed it was unconstitutional to put Mother Teresa on a postage stamp, so it's no surprise they're trying to sic the IRS on churches," Goodrich added, speaking about the FFRF. "Treating ministers like other professionals isn't an establishment of religion; it's fair tax treatment."
The Chicago-based Seventh Circuit is expected to make a decision on the appeal later this year.
Watch the Becket video on the IRS lawsuit below:
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