In November, a federal judge in the Western District Court of Wisconsin, Barbara Crabb, ruled the ministerial housing allowance, Section 107(2) of the Internal Revenue Code to be an unconstitutional preference for religion, thereby striking the law down. In short, the judge has ordered the IRS and the Department of the Treasury to end the deduction as an allowable exemption from income tax.  Federal legislation was most recently amended in 2002 in allowing the exemption.

This is Judge Crabb's second decision in favor of the Freedom from Religion Foundation, the plaintiff in this decision. She had earlier ruled that National Prayer Day was unconstitutional, but that decision was later reversed. It is no doubt why the FFRF filed the complaint in Wisconsin, in hopes that Judge Crabb would hear the case.

As has happened in prior cases such as this, the ruling will no doubt be appealed by churches, denominational judicatories and church-based pension plans, including the Church Pension Fund.  The court ruling "will take effect at the conclusion of any appeals...or the expiration of the deadline for filing an appeal, whichever is later."  The appeal would be filed in the Seventh Circuit Court of Appeals, based in Chicago, and this could take at least a year to be resolved.

From a Virginia perspective, it should be kept in mind that a ruling in Wisconsin is not binding on clergy in our Diocese.  It would only evolve to include Virginia if the Supreme Court of the United States affirmed the decision.  It is felt that this would be very unlikely.

While the impact on all clergy would be significant, this is mostly a heads-up for the clergy and lay leadership of the diocese.  It is highly recommended that all of our churches and Episcopal Church institutions continue to determine, designate and record a housing allowance for all clergy for 2014.