Appeals court rules in favor of clergy

Court dismisses lawsuit
Appeals court rules in favor of clergy

A federal appeals court has dismissed a lawsuit challenging a law that gives clergy tax-free housing allowances.

The 7th U.S. Circuit Appeals Court on Thursday reversed a Wisconsin judge’s decision from last year striking down the law benefiting clergy. The appeals court says the co-presidents of the Madison-based Freedom From Religion Foundation did not have standing to challenge the law because they’ve never suffered because of the law.

Under the federal law passed in 1954, ministers don’t pay income taxes on compensation that is designated part of a housing allowance.

The Freedom From Religion Foundation says that a clergy member can use the untaxed income to purchase a home and then get a double benefit by deducting interest paid on the mortgage and property taxes.