September 5, 2002 | Read Time: 1 minute
The Ninth Circuit Court of Appeals has dismissed a case involving a law that allows ministers and other religious leaders to exclude from their gross income the money they receive from their employers to pay for housing.
The issue arose in a dispute between the IRS and a California minister over the housing allowance the minister had claimed as a “tax exclusion.”
The IRS argued that the amount the minister should be allowed to exclude from income was limited to the “fair rental value” of the house. The minister sought to claim expenses above the IRS’s calculation.
But earlier this year Congress passed a law intended to resolve the dispute. The statute supported the IRS’s position but said that housing allowances provided before the new law took effect were not subject to the limitation (The Chronicle, May 30).
The IRS and the minister then asked the appeals court to drop the matter. But on the same day a law professor asked the court to hold off and allow him to argue that the parsonage allowance violates the constitutional principle that government should not advance or inhibit a religion (The Chronicle, June 13).
Last week, the appeals court decided to close the California minister’s case, but it said the professor was free to challenge the law in a separate suit in a lower court.
