Gaylor v. Mnuchin

Becket Role:
Case Start Date:
September 12, 2011
Current Court:
U.S. District Court for the Western District of Wisconsin
Original Court:
U.S. District Court for the Western District of Wisconsin


This case is in the briefing stage of an appeal to the U.S. Court of Appeals for the Seventh Circuit.

Case Summary

A 64-year-old tax-exempt housing allowance permits religious leaders to live near their congregations. But an atheist group sued to end this tax law, harming pastors, rabbis, imams and other faith leaders and the communities they serve.

Meet Chris Butler, pastor of a church in South Side, Chicago

The leader of a predominantly African-American congregation, Pastor Chris Butler devotes his life to serving communities in Chicago’s poorest neighborhoods.

Pastor Chris spends countless hours leading his church’s many community ministries, such as the Chicago Peace Campaign, which has been successful in bringing peace to areas devastated by violence; the Journeymen program that mentors at-risk youth; and a homeless ministry focused on feeding the hungry and providing blankets and toiletry kits.

Pastor Chris lives only minutes away from his church in order to better serve his community. He is able to do this because of the parsonage allowance, a tax law that allows religious employees to live nearby their work.

The parsonage allowance is beneficial to all

For much of the past century, pastors, rabbis, imams and other faith leaders – whose job requires them to live close to their church or in an underserved community – have been eligible for a tax-exempt housing allowance under the same tax principle that allows businesses and the military to reimburse travel and overseas housing costs and provides tax-free housing to teachers and police who live in the communities they serve.

The parsonage allowance is crucial for ministers like Pastor Chris who rely on it for housing near the congregations and communities they serve.

Defending all faith leaders from discrimination

However, the atheist group Freedom From Religion Foundation is suing the IRS to force them to stop allowing religious leaders – like Pastor Chris – from receiving the housing allowance. Not only does this explicitly discriminate against religious groups when so many secular businesses and organizations receive similar tax treatment, but it hurts churches and the communities they serve.

In 2011, FFRF sued in federal district court, which ultimately struck down the parsonage allowance. In 2014, Becket filed a friend-of-the-court brief on behalf of a diverse group of Southern Baptist, Eastern Orthodox, Hindu, and Muslim organizations that would be harmed without the parsonage allowance. That same year, the Seventh Circuit rejected the atheists’ lawsuit.

In 2016, FFRF sued again. Pastor Chris Butler and Bishop Edward Peecher of Chicago Embassy Church, Father Patrick Malone of Holy Cross Anglican Church, and the Diocese of Chicago and Mid-America of the Russian Orthodox Church Outside of Russia, filed to intervene in the lawsuit, standing up to the atheists’ attempts to overturn this law just because it also happens to benefit religious groups. In January 2017, the motion for intervention was granted.

In October 2017, the court ruled that the parsonage allowance violates the Establishment Clause. The churches appealed the decision to the Chicago-based United States Court of Appeals for the Seventh Circuit and in April of 2018 they asked the court to end this discriminatory lawsuit that would devastate their communities and subject churches across the country to almost $1 billion in new taxes. The court is expected to hear oral argument and issue a decision later this year.