Housing Allowance Case Dismissed

Over a year ago, we advised you that a group of eighteen plaintiffs had filed suit, claiming that the ministerial housing allowance was unconstitutional. Previous challenges to the ministerial housing allowance tax exemption had been brought on statutory claims, alleging that the exemption violated specific laws of the nation. This latest challenge, filed in Southern California in late 2009, was the first substantial challenge to the housing allowance exemption in which a constitutional argument was advanced. This challenge concerned many of the legal scholars within the church community and most expected a negative outcome, particularly based upon the court in which it was filed.

However, I am glad to report that the plaintiffs have agreed to dismiss their challenge to the ministerial housing allowance exemption. The Stipulation for Dismissal order was filed on Friday, June 17, 2011.

While we celebrate this momentary victory, the challenge was dismissed “without prejudice,” meaning that it can be re-filed at the desire and whim of the plaintiffs. We anticipate that such will occur within a short time.

Based upon the Supreme Court’s decision earlier this year in Arizona Christian School Tuition Organization v. Winn, 131 S.Ct. 1436 (2011), the plaintiffs were concerned that their challenge would be thrown out of court due to lack of “standing,” or the ability to claim harm and thus seek a legal redress of the issues raised. The attorneys following the housing allowance case are confident that the plaintiffs will try to correct the “standing” issue and re-file the case as soon as possible.

However, for now we are not facing a possible adverse decision that could have been handed down as early as September 2011.    

We will keep you advised, if and when, the plaintiffs re-file their complaint.

About benefitsboard

Art Rhodes is the President and CEO of the Church of God Benefits Board, Inc. - the administrator of the Ministers' Retirement Plan and the Church Loan Fund, Inc. The corporate offices of the Benefits Board are in Cleveland, TN.
This entry was posted in Ministerial Housing Allowance, Ministers, Tax Information. Bookmark the permalink.

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