One Court Rules That the Clergy Housing Allowance is Unconstitutional

Plaintiffs filed one lawsuit under the Administrative Procedure Act, 5 U.S.C. § 702, contending that certain federal income tax exemptions received by “ministers of the gospel” violated the establishment clause of the First Amendment to the Constitution of the United States and the equal protection component of the Fifth Amendment to the Constitution of the United States.

As related to this lawsuit, Plaintiffs took issue with the law that excluded from gross income a minister’s “rental allowance paid to him as part of his compensation.”

The District Court concluded that the law at issue violated “the establishment clause under the holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), because the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”  The Court declined to consider Plaintiffs’ equal protection argument.

Stay tuned.  An appeal is likely to follow, as well as possible Congressional action.  For more information or for a consultation regarding your legal issues, please contact McCollum & Associates, LLC, at (301) 864-6070 or


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