NINTH CIRCUIT ORDERS SUPPLEMENTAL BRIEFING ON VALIDITY OF PARSONAGE EXCLUSION. 

(Section 107 -- Rental Value of Parsonage) (Release Date: MARCH 05, 2002) (Doc 2002-5592 (2 original pages)) 

Copyright (c) 2002 Tax Analysts www.tax.org 
Used by permission
Tax Notes Today
2002 TNT 44-8
MARCH 6, 2002 WEDNESDAY
CODE: Section 107 -- Rental Value of Parsonage 

ABSTRACT: In litigation before the Ninth Circuit addressing the proper valuation of the parsonage housing allowance exclusion under section 107(2), the court has ordered supplemental briefings on the constitutionality of the provision under the Establishment Clause. 

SUMMARY: 

In litigation before the Ninth Circuit addressing the proper valuation of the parsonage housing allowance exclusion under section 107(2), the court has ordered supplemental briefings on the constitutionality of the provision under the Establishment Clause. 
In an order filed March 5, the United States Court of Appeals for the Ninth Circuit has asked professor Erwin Chemerinsky of the University of Southern California Law School to file an amicus brief informing the court of the provision's constitutionality and the court's authority to consider a constitutional question when it has not been raised by the parties. (For the March 5 order in Richard D. Warren, et ux. v. Commissioner, see Doc 2002-5526 (10 original pages)). 

The case, now before Circuit Judges James R. Browning, Stephen Reinhardt, and Richard C. Tallman, is on appeal from a U.S. Tax Court in which the parties did not challenge the code section's validity. According to Judge Tallman's dissenting opinion, the parties also "advised the Court [during oral argument] that they [did] not wish to do so" on appeal. Instead the parties asked the court to determine whether "Rev. and Mrs. Richard Warren may claim an unlimited parsonage housing allowance exclusion based on actual expenditures from Rev. Warren's gross income as a Baptist minister" or if "the allowance is limited to the fair market rental value of his parsonage." 

According to Judge Reinhardt, who wrote the concurring opinion, the issue is "[t]o what tax deduction is Reverend Warren entitled? If . . . under the constitution, Rev. Warren is not entitled to any tax deduction at all because such a deduction would violate the First Amendment, then it is not possible to decide the case on non- constitutional grounds and reach the correct result." 

AUTHOR: Harris, J. Christine
Tax Analysts 

TEXT: 

Release Date: MARCH 05, 2002 

In litigation before the Ninth Circuit addressing the proper valuation of the parsonage housing allowance exclusion under section 107(2), the court has ordered supplemental briefings on the constitutionality of the provision under the Establishment Clause. 
In an order filed March 5, the United States Court of Appeals for the Ninth Circuit has asked professor Erwin Chemerinsky of the University of Southern California Law School to file an amicus brief informing the court of the provision's constitutionality and the court's authority to consider a constitutional question when it has not been raised by the parties. (For the March 5 order in Richard D. Warren, et ux. v. Commissioner, see Doc 2002-5526 (10 original pages)). 

The case, now before Circuit Judges James R. Browning, Stephen Reinhardt, and Richard C. Tallman, is on appeal from a U.S. Tax Court in which the parties did not challenge the code section's validity. According to Judge Tallman's dissenting opinion, the parties also "advised the Court [during oral argument] that they [did] not wish to do so" on appeal. Instead the parties asked the court to determine whether "Rev. and Mrs. Richard Warren may claim an unlimited parsonage housing allowance exclusion based on actual expenditures from Rev. Warren's gross income as a Baptist minister" or if "the allowance is limited to the fair market rental value of his parsonage." 

According to Judge Reinhardt, who wrote the concurring opinion, the issue is "[t]o what tax deduction is Reverend Warren entitled? If . . . under the constitution, Rev. Warren is not entitled to any tax deduction at all because such a deduction would violate the First Amendment, then it is not possible to decide the case on non- constitutional grounds and reach the correct result." Citing Texas Monthly Inc. v. Bullock, 489 U.S. 1 (1989), Judge Reinhardt also noted that "a 'just resolution' of th[e] case may well mean no deduction for the parson, if the statute violates the Establishment Clause." According to the concurring opinion, the holding of Texas Monthly indicates a possibility that "any tax deduction that Rev. Warren receives under section 107(2) would constitute an unconstitutional windfall at the public's expense," Judge Reinhardt wrote. 

Responding to the concurrence, Judge Tallman pointed to language from Spector Motor Serv. Inc. v. McLaughlin, 323 U.S. 101, 105 (1944), indicating the "firmly rooted" doctrine of constitutional adjudication that guides the courts "to pass on questions of constitutionality . . . unless such adjudication is unavoidable." According to Judge Tallman, the doctrine "advises us to 'abstain from deciding fundamental constitutional questions prematurely.'" 

Supplemental briefs must be submitted within 45 days of the order. 

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