Recently, both the OU and Agudath Israel filed amicus curiae (“friend of the court”) briefs to the 7th U.S. Circuit Court of Appeals, defending the federal tax allowance that rabbis and other religious clergy receive for their housing.

A section of the U.S. tax code known as the “parsonage allowance” allows religious ministers not to pay federal taxes on any income they spend on their housing. However, a U.S. District Court in Wisconsin recently ruled that the parsonage allowance is an unconstitutional violation of “separation of church and state” because the tax breaks given to clergy have no secular purpose and endorse religion. This case was appealed to the 7th U.S. Circuit Court of Appeals, where the OU and Agudath Israel filed their briefs to defend the parsonage allowance.

The OU’s amicus brief highlights the historical indispensability of parsonage allowances to shuls and churches around the country. The OU argues that over the past 64 years of this allowance’s existence, it has become “deeply embedded in the fabric of our national life” by enabling small shuls and churches to survive on their limited budgets—if there were no parsonage allowance, many small shuls would be forced to divert resources from other areas to pay for their rabbi’s housing. The historical importance of parsonage matters because the Supreme Court ruled that the Establishment Clause must be interpreted “by reference to historical practices and understandings.”

Agudath Israel’s amicus brief takes a different tack, arguing that the parsonage allowance is just a slight extension of a completely secular part of the tax code. An undisputed part of the tax code states that a house provided to an employee on the employer’s premises is not considered taxable income. A house provided by a congregation to its preacher or rabbi, even off premises, is also exempt from income tax because it is used for the purposes of the congregation—meals, education, private meetings etc. The parsonage allowance was created to apply this exemption equally to rabbis whose congregations cannot provide a house—if not for the parsonage allowance, the tax code would be discriminating against poorer religious denominations. The parsonage allowance has no religious purpose—it just applies an existing tax exemption more fairly.

The OU and Agudath Israel have compelling arguments. But only time will tell whether the court agrees.

By Tani Greengart

Tani Greengart is a TABC senior who is currently an intern at The Jewish Link.