by Steve Wolfgang
Synopsis: Steve reports upon a case that is working its way through the courts that is of interest to preachers of the gospel.
The 7th Circuit Court of Appeals sits at Chicago, occupying the 27th Floor of the Everett Dirksen Federal Building in the Federal Plaza downtown. It is one of twelve such federal Courts of Appeal, one rung below the US Supreme Court in the federal court system. On October 24, 2018, I attended the oral arguments presented before the court regarding Case #18-1277, Gaylor v. Mnuchin. It is a reprise of a case brought by the Freedom from Religion Foundation (FFRF) which was dismissed in 2013 for lack of "standing" by the plaintiffs. After making some adjustments in their case, FFRF is back again.
Judge Michael Brennan presided, joined by Senior Judges Daniel Manion, and William J. Bauer (nominated by Presidents Trump, Reagan, and Ford, respectively, and confirmed by the Senate).
I'm not an attorney, I don't play one on TV, and I didn't stay at a Holiday Inn last night—so take these "laymen's" impressions with grains of salt. I do have a personal interest in the case, in that it challenges the right of churches and preachers to declare a significant portion of their income as a tax-exempt housing allowance. FFRF alleges that this is unconstitutional, violating the First Amendment (Article I of the Bill of Rights) which mandates, among other things, that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." The argument is that such housing allowances grant government privilege, not available to other citizens, to religious organizations and ministers. The lower court in Wisconsin ruled in favor of the FFRF, and that decision was appealed to the 7th Circuit.
FFRF has called this a "David v. Goliath" campaign, imagining Goliath as the various religious bodies whose ministers would be affected by the elimination of tax-exempt housing allowances. However, the real giant in the room and the bigger challenge for FFRF may be that they are suing the US government itself—specifically the Secretary of the Treasury.
Representing the government at the October hearing was an array of attorneys, led by Jesse Panuccio, Associate Attorney General of the US (the third highest ranking official at the Department of Justice, who oversees virtually all non-criminal matters). He was joined by four other attorneys at a table laden with documents and surrounded by document cases and still more attorneys seated near the table.
The chambers were "comfortably full"—each of the rows of spectator benches might have had room for one or two more persons if everyone had moved to the center.
Also arguing an amicus brief was Luke Goodrich, VP and Senior Counsel of Becket Law—a firm which argues religious liberty cases on behalf of believers in many religious communities, "Christian" and otherwise. They are representing a coalition of Chicago churches (ranging from Holy Cross Anglican Church to the Chicago Embassy Church, to the Chicago Diocese, Russian Orthodox Church), arguing specifically that the elimination of the IRC 107(2), which provides for ministerial housing allowances, would discriminate against poorer religious groups which cannot afford to provide a church-owned parsonage for their preacher, as allowed in Section 107(1) of the Internal Revenue Code.
Seated at the opposite table were two attorneys who argued that the ministerial housing allowance permitted under IRC Section 107(2) is unconstitutional. Speaking first was Adam Chodorow, Associate Dean for Academic Affairs for the Sandra Day O'Connor College of Law at Arizona State University, arguing a brief filed by a coalition of tax professors. I thought he made the strongest and clearest case possible that IRC 107(2) is unconstitutional simply by singling out a special class (ministers) to receive a benefit not available to other citizens. Agree with the arguments or not, he made his case clearly and fielded the questions effectively asked him by the justices.
Richard Bolton, who I believe is a general-practice attorney in Madison, WI (where FFRF is located), spoke last, representing Annie Gaylor and Dan Barker, co-presidents of FFRF. My impression is that FFRF was not particularly well served by his presentation, which to my ears sounded rambling, disjointed, repetitive, and unclear. Agree or not, the other attorneys presented their cases clearly and concisely, supported by relevant court decisions and logic. Bolton, who seemed flustered by questions from the justices, also sounded exasperated at times that the simple assertion of the rightness of his case was not accepted as obvious (one man's opinion). Presumably, such cases are decided on the merits of conflicting claims presented in the briefs and prior case law and court decisions, not so much on the eloquence and personality of the presenters.
Many of the issues raised in oral arguments had been discussed in an interesting seminar at the Loyola University Law School, which I also attended, the week prior to the 7th Circuit oral arguments. Some of the issues included whether the housing allowance passes the three-prong "Lemon v. Kurtzman" test, based on a 1971 Supreme Court decision. Among these issues is whether a law has "secular intent" (Judge Manion posed several questions about the secular effect, not merely the secular intent, of the law), and whether "Lemon" provisions should take precedence over historical considerations in the legislative history, adjudicating such issues on a practical basis involves government entanglement in the usage of either parsonage or house exempted under the allowance, and much more.
An interesting part of the "back-story" of this case is that the issue was brought to the FFRF by a now-retired IRS agent who is also a member of a local Church of Christ. He became disturbed upon discovering that, in 1970, some so-called "Christian Colleges" (including Abilene Christian University and Pepperdine), claiming to be "integral agencies of the church," had sought tax-exempt housing allowances for many of their staff personnel (including athletic coaches identified as "basketball ministers"). To accomplish this, they enlisted the aid of several congressmen from Texas, including George H. W. Bush of Houston, and Omar Burleson of Abilene (an ACU alum and supporter) to pressure the IRS to allow such a ruling. The rest, as they say, is history.
So, as is often said of such matters, "We'll see." Whatever the 7th Circuit decides, the case will almost certainly be appealed to the US Supreme Court. The lower court decision in Wisconsin, declaring tax-exempt housing allowances for ministers unconstitutional, was stayed pending appeals. Should that decision be upheld by the 7th Circuit, and then by the Supreme Court, the lower court decision mandates that the statute allowing tax-exempt ministers' housing allowance will become null and void 180 days after the last appeal process is exhausted. Whether Congressional legislative action to restore it might ensue remains to be seen. Stay tuned!
A decision is expected sometime early in 2019.
Public Access to Oral Argument recordings presented before the Seventh Circuit Court of Appeals is available here.
An audio recording of Case #18-1277, Annie Gaylor v. Edward Peecher, is available here.
Author Bio: Steve has worked with the church in Downers Grove (suburban Chicago) since 2008. He and his wife, Bette, have two adult children and three grandchildren. His blog, eklektikos, can be read at stevewolfgang.wordpress.com. He may be reached at stevewolfgang@aol.com or wolf@uky.edu.
