As reported by ChurchLawandTax.com, the federal district court in Kentucky this week threw out a suit against the Internal Revenue Service challenging church and clergy tax benefits. The suit was brought by three different atheist groups: The American Atheists Inc., Atheists of Northern Indiana Inc., and Atheist Archives of Kentucky Inc. Their claim was that clergy receive preferential treatment under five different tax provisions, including church tax-exempt status and the clergy housing allowance.
The groups claimed they suffered “unconstitutional discrimination and coercion arising from their inability to satisfy the IRS test to gain classification to secure the same treatment as religious organizations or churches…” However, the groups said they never actually tried to become 501(c)(3) religious organizations, explaining that such attempts to do so would violate their beliefs. The court dismissed the case, saying the atheist groups never attempted to file as religious organizations, they never suffered direct injuries and any possibility of injuries was “mere speculation.”
This particular ruling only pertains to Kentucky law, but it suggests an outcome for another high-profile lawsuit in Wisconsin, brought by the Freedom From Religion Foundation last November. This suit is awaiting a final decision after a judge ruled the housing allowance was unconstitutional and the U.S. Department of Justice appealed.
If the Wisconsin federal judge’s clergy housing allowance ruling is affirmed, then ministers in Illinois, Wisconsin and Indiana will lose their housing allowance benefit, meaning they will pay taxes on the portions of their salaries set aside to pay for housing. Clergy who live in church-owned parsonages would be unaffected.
