UPDATE The United States Department of Justice has appealed the ruling that the clergy housing allowance exclusion is unconstitutional.
Ruling Against Housing Allowance Being Appealed
The United States Department of Justice has appealed the ruling that the clergy housing allowance exclusion is unconstitutional. The appeal was filed January 24 with the United States Court of Appeals for the Seventh Circuit, which is located in Chicago. The challenge to the clergy housing allowance exclusion was filed by the Madison, Wisconsin-based Freedom from Religion Foundation, and in November 2013, a lower federal court in Wisconsin ruled the exclusion to be unconstitutional. The exclusion, enacted by Congress in 1954, excludes compensation designated as clergy housing allowance from federal income tax. Since 1921, the rental value of employer-provided parsonages has been excluded from federal income tax, and this exclusion has not been impacted by the ruling of the Wisconsin court. The November 2013 ruling will not take effect until and unless it is upheld by all appeals courts that consider it. Thus, there is no need for immediate action. Concordia Plan Services has been closely monitoring this case, and will provide any new information.