Plaintiffs have standing to challenge tax exemption for parsonage allowance

Howard Friedman, Religion Clause

In Freedom From Religion Foundation, Inc. v. United States, (WD WI, Aug. 29. 2012), a Wisconsin federal district court held that officers of the Freedom From Religion Foundation have standing to bring Establishment Clause and equal protection challenges to the constitutionality of Internal Revenue Code Sec. 107 that excludes from taxable income the parsonage allowance or the rental value of a home provided to members of the clergy. The court found that plaintiffs have alleged “injury in fact” because they contend that they receive a housing allowance from their employer and do not receive the same exemption from taxation for the amounts they are given. The court said in part:

plaintiffs’ allegation of discriminatory treatment is distinct from a simple disagreement with the government’s conduct…. I disagree with defendant that plaintiffs lack standing because they have a “generalized grievance.” The Supreme Court has rejected the view that a plaintiff does not suffer an injury in fact simply because it is “widely shared.”…. 

More important, defendant cites no statute that prohibits plaintiffs from bringing this action. As defendant acknowledges, the Anti-Injunction Act, 26 U.S.C. § 7421, bars suits that seek to  enjoin the government from assessing or collecting a tax, not from eliminating an exemption, so it does not apply to this case. 

(See prior related posting.) [Thanks to Bob Ritter for the lead.]