Last week, an appeals court reversed a previous ruling and protected a Chicago-based pastor and other religious leaders around the country from having their parsonage allowance taken away, which would have resulted in pastors having to pay nearly $1 billion per year in new taxes. This will hopefully be the last attempt by the Freedom From Religion Foundation, an atheist group, to sue to have this particular IRS code 107(2) removed. The provision allows churches, mosques, and synagogues to provide faith leaders a tax-free housing allowance to help them live in the communities they serve. FFRF claimed it violated the establishment clause.
In 2016, FFRF first sued, claiming the federal tax provision violated the establishment clause. Pastor Chris Butler of the Chicago Embassy Church and other religious leaders intervened in an effort to salvage their parsonage allowance. However, in 2017, a district court agreed with FFRF, prompting an appeal from Butler. In October 2018, the Becket Fund for Religious Liberty, acting as attorneys on behalf of Butler, argued 107(2) was perfectly constitutional.--
More...
