Atheist Group Does Not Have Standing to Challenge Parsonage Exemption Where Leaders Never Attempted to Claim Exemption

Category: Private Education Matters
Date: Dec 23, 2014 05:03 PM

The parsonage exemption allows a minister to receive tax-free housing from his church, whether provided directly, by giving the minister a residence, or indirectly, by giving the minister a housing allowance.  Non-clergy employees who receive housing benefits usually must pay taxes on the value of the benefit unless they meet certain requirements, including that the housing is provided for the convenience of the employer.

The Freedom from Religion Foundation (FFRF) is an organization of atheists and agnostics, whose co-presidents are Annie Gaylor and Dan Barker.  Both Gaylor and Barker receive a portion of their salaries from FFRF in the form of a housing allowance.  They pay income tax on this benefit because they are not ministers.  They claim this exemption violates the first amendment because it conditions the receipt of a tax benefit on religious affiliation.  Neither one attempted to claim the exemption or file for a refund after paying taxes on this benefit.

Under Article III of the Constitution, a federal court can only hear a case if the plaintiff has standing to challenge the alleged misconduct.  To demonstrate standing, the plaintiff must show that he has suffered, or is imminently threatened with, a concrete and particularized injury that is fairly traceable to the defendant's action and that is likely to be redressed by a favorable judicial decision.

Courts have made clear that a plaintiff cannot establish standing based solely on being offended by an alleged violation of the establishment clause by the government. Gaylor and Barker would have to show an actual direct harm they suffered.  They could also show standing by demonstrating that they have incurred a cost or been denied a benefit on account of their religion.  This could be shown where the availability of a tax exemption is conditioned on religious affiliation.

Here, Gaylor and Barker tried to argue they were denied a benefit that is conditioned on religious affiliation.  The court found this argument lacking because neither Gaylor nor Barker were ever denied the exemption because they never requested it.  Without any actual denial of a benefit, their claims amounted to a general grievance about the law's constitutionality. 

The district court had concluded that it would serve no purpose to require Gaylor and Barker to apply for the exemption and be rejected before they could file suit, but the appeals court disagreed. The court ruled that the requirements of Article III are not merely procedural hurdles to jump through if possible, but a basic requirement of having a case heard in federal court. Ultimately, because Gaylor and Barker were never denied a benefit, they were not deemed to have suffered an injury and therefore did not have standing to bring this case.

Freedom from Religion Foundation, Inc. v. Lew, (2014) –F.3d--, 2014 WL 5861632

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