An appellate court recently issued a favorable ruling for religious employers in a closely watched case relating to the ability of religious employers to provide tax-fee housing allowances to ministers. The court overturned a district court decision declaring unconstitutional Internal Revenue Code Section 107(2), which excludes from gross income a rental allowance paid to a “minister of the gospel” as part of his or her compensation, because the plaintiffs-appellees lacked standing to challenge the provision’s constitutionality. Religious institutions offering such allowances should continue to monitor developments in this area and consider alternative compensation strategies.
Seventh Circuit: Plaintiffs Lacked Standing to Challenge Tax Exemption for Ministerial Rental Allowances
Posted In Employment
Todd SolomonTodd A. Solomon focuses his practice on designing, amending and administering pension, profit sharing, 401(k), employee stock ownership and 403(b) plans, as well as nonqualified deferred compensation arrangements. He also counsels privately and publicly held corporations and tax-exempt entities regarding fiduciary issues under the Employee Retirement Income Security Act (ERISA), employee benefits issues involved in corporate transactions, executive compensation matters and the implementation of benefit programs for domestic partners of employees.Read Todd A. Solomon's full bio.
Joseph K. UrwitzJoseph (Joe) K. Urwitz focuses his practice on employee benefits, executive compensation and Employee Retirement Income Security Act (ERISA) fiduciary matters. He advises clients on a wide range of issues, including fiduciary duties and prohibited transactions, employee benefit matters arising in mergers and acquisitions, benefits issues unique to nonprofit entities, deferred compensation arrangements, equity award and bonus plan design, employment and severance arrangements, and qualified plan work. Read Joe Urwitz's full bio.
Mary K. Samsa
Ralph E. DeJongRalph E. DeJong advises clients on the compensation, executive benefits and employee benefits of tax-exempt organizations. He provides counsel on designing and preparing deferred and incentive compensation arrangements, leading governing boards in the review and approval of executive and physician compensation arrangements, negotiating and preparing executive and physician employment agreements, and analyzing the private inurement and intermediate sanctions implications of executive and physician compensation and benefit arrangements. Read Ralph DeJong's full bio.
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