(RNS) A federal court of appeals rejected a case brought by an atheist organization that would have made tax-exempt clergy housing allowances – often a large chunk of a pastor’s compensation – illegal.
“This is a great victory for fair treatment of churches,” said Luke Goodrich, deputy general counsel for the Becket Fund for Religious Liberty, which filed an amicus brief on behalf of pastors from several major denominations.
“When a group of atheists tries to cajole the IRS into raising taxes on churches, it’s bound to raise some eyebrows,” he said. “The court was right to send them packing.”
Thursday’s (Nov. 13) ruling means pastors will not have to pay taxes on up to $500 million in compensation, according to Becket Fund figures.
But the Freedom from Religion Foundation, a Madison, Wisc.-based First Amendment watchdog group that has pursued the case since 2011, vowed to fight on.
“We are disappointed but we are not giving up,” said Annie Laurie Gaylor, FFRF’s co-president. “We are so clearly right and the law is so clearly unconstitutional.”
The U.S. Seventh Circuit Court of Appeals, based in Chicago, rejected a lower court ruling for the atheists because it found Gaylor and FFRF lacked “standing” – meaning they had no right to sue because the law did not affect them. Gaylor and Dan Barker, her co-president and an ordained minister, did not seek a housing allowance for themselves under the law.
“Dan took the allowance when he was a minister, but now that he is head of the largest atheist and agnostic organization in the country, he cannot take it,” Gaylor said. “That clearly shows preference for religion.”
Gaylor said FFRF was reconsidering its legal options and would not drop the case.
“We are regrouping,” she said.
by Kimberly Winston