By Scott Bauer
MADISON, Wis. — A federal appeals court ruled Friday that a law giving clergy tax-free housing allowances is constitutional, overturning a ruling in Wisconsin that said it was an unconstitutional benefit and delivering a huge win to religious leaders who had fought to keep the substantial benefit.
The Wisconsin-based Freedom From Religion Foundation has been waging legal battles against the tax break for a decade. Several religious organizations intervened in the case, saying that the survival of many congregations depended on keeping the housing allowance. A group of more than 5,000 pastors signed on to an Alliance Defending Freedom letter supporting the exemption.
The 7th U.S. Circuit Court of Appeals said in its Friday ruling that the effect of the 1954 law is “neither to endorse nor to inhibit religion, and it does not cause excessive government entanglement.” The court noted that Congress has been providing federal tax exemptions for religious organizations as far back as 1802.
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