Old Dutch Parsonage, Sommerville, NJ. By Zeete. CC BY-SA 4.0

On October 24, 2018, the Seventh Circuit heard an appeal in Gaylor v. Mnuchin, the parsonage allowance case. I’ve written several times about this case over the last six or so years (some links in this post), and I checked the Seventh Circuit’s website for the decision incessantly.

And eventually, it released its opinion. Two and a half weeks ago. I’ve been meaning to blog about it, but haven’t had time to do it justice. And I still haven’t, but wanted to at least flag its conclusion and suggest where it may go from here. Maybe sometime in the future I’ll have time to really engage the opinion here.

A quick summary/reminder: the case dealt with the constitutionality of section 107(2) of the Internal Revenue Code. Section 107(2) says that a “minister of the gospel” can exclude from gross income (and thus not pay taxes on) a housing allowance paid by his or her employer. In essence, it represents a religion-specific exception to the general rule that amounts an employee receives from her employer constitute income subject to tax.[fn1] [Read more…]