Judge strikes down tax-free housing for clergy

CREATED Nov 23, 2013

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  MADISON (AP) -- A federal judge has struck down a law that gives clergy members tax-free housing allowances.

The Wisconsin State Journal reports the decision could have far-reaching financial ramifications for pastors, who currently don't pay income taxes on compensation that is designated part of a housing allowance.
In her Friday decision, U.S. District Judge Barbara Crabb wrote the exemption: "provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise."
The Madison-based Freedom From Religion Foundation filed the lawsuit against U.S. Treasury Secretary Jacob Lew and acting IRS commissioner Daniel Werfel. A treasury department spokeswoman referred questions to the Department of Justice, which is representing Lew. 
A DOJ spokeswoman did not immediately respond to an email Saturday.