Under the federal law passed in 1954, a “minister of the gospel” doesn’t pay income taxes on compensation that is designated part of a housing allowance. The Freedom From Religion Foundation, headquartered in Madison, argued that the law discriminates against secular employees.

The benefit saves clergy, including non-Christian religious leaders, about $800 million a year in taxes.

Under the law, housing allowances paid as part of clergy salary can be subtracted from their taxable income. The Freedom from Religion Foundation argued that a clergy member can use the untaxed income to purchase a home, and then, in a practice known as “double dipping,” deduct interest paid on the mortgage and property taxes.

[washingtonpost.com]