Clergy Housing Allowance - Federal Litigation


  • On October 6, 2017, for the second time in four years, Judge Barbara Crabb of the United States District Court for the Western District of Wisconsin ruled the parsonage allowance unconstitutional.  As she had in the earlier case, Judge Crabb said that the housing allowance was an impermissible preferential treatment of religion under the Establishment Clause of the Constitution. This was an unfavorable but not unexpected decision. Notably, the ruling does not apply to those living in a parsonage (clergy living in a home owned by a congregation).
  • In a follow-up order dated December 13, 2017, Judge Crabb finalized her decision. She issued an injunction prohibiting the IRS from allowing ministers to claim the housing allowance as an exclusion from income. At the same time, Judge Crabb placed a stay on the injunction until “180 days after the conclusion of any appeals” in order to “allow Congress, the IRS and affected individuals and organizations to adjust to the substantial change.”
  • As expected, on February 8, 2018, the United States Department of Treasury and the original defendants appealed Judge Crabb’s decision to the Seventh Circuit Court of Appeals in Chicago. This continues the legal battle initiated by the Freedom From Religion Foundation. During the appeal, Judge Crabb’s decision remains on hold; rabbis and cantors – in active service or retired – can continue to claim the housing allowance.

What Does This Decision Mean for You?

The ruling has no immediate effect.

  • Regardless of how the Court of Appeals rules, the case is likely to go to the Supreme Court of the United States for a final decision. Therefore, it probably will be several years before a final ruling is rendered.
  • Because the injunction has been stayed, rabbis and cantors can continue to follow normal procedures in claiming a housing allowance.

The JRB Will Keep You Informed

The JRB understands the value of the housing allowance to our clergy. To this end, the JRB is a member of the Church Alliance, a coalition of 37 CEOs of denominational benefits boards that lobbies at the federal and state level on behalf of clergy on issues such as the housing allowance. JRB CEO Mitch Smilowitz serves on the Board of the Church Alliance. We will continue to keep you apprised of any developments affecting the clergy housing allowance.

If you have questions about the housing allowance, please contact the JRB at 888-JRB-FREE (572-3733) or staff@jrbcj.org