In Freedom from Religion Foundation v. Lew (November 22, 2013, W.D. Wisc), Judge Crabb found that Section 107 of the Internal Revenue Service was unconstitutional. This follows on the heels of another case Freedom From Religion Foundation v. Geithner 715 F. Supp 2d 105(E.D. CA, 2010) in which the District Court found the Foundation to have standing to challenge Section 107 and found that the case should not be dismissed. Section 107 and its predecessors have been in the Code since 1921 when it declared that church provided parsonages or rectories were not income to the pastor. In 1954, Section 107(b) was added to permit churches to give Pastors’ a housing allowance to permit them to live somewhere other than a parsonage. In other words, this saved churches the cost of having to maintain parsonages and allowed states to tax the real estate lived in by the Pastor. Until this ruling no successful challenge has been mounted against Section 107. However most of those cases failed because the Courts ruled that the person bringing the suit did not have standing. See Warren v. CIR 302 F 3d 1012 (9th Cir., 2002); Kirk v. CIR 425 F 2d 492 (DC, 1970). In the Wisconsin case two officers of the FFRF the United States because they couldn’t exclude their specified housing allowance from income. Thus, they had standing because they suffered from this “discrimination” more than the general public. Judge Crabb did some handstands to find that they had standing since she did not deal with the Anti-injunction Act nor did she deal with the Declaratory Judgment Act issues in such a suit. Instead, these taxpayers standing should have been predicated upon whether or not they were owed a refund of tax for not permitting them a housing allowance. The Court did not address this, and that may be this case’s fatal flaw. Had the Court addressed that issue, it could have then moved to the Constitutional issues involved. Interestingly enough this law has been around for 90 years and this is the first Court to rule that the law is unconstitutional. Now the question becomes whether or not the Obama Administration and its Justice Department choose to defend the law on appeal as they refused to do in the DOMA case. If they do not, this ruling will stand, but it will only impact taxpayers in the Western District of Wisconsin. As a practical matter until the IRS comes out with guidance pastors will still be able to exclude such allowance since those pastors were not made parties to the lawsuit.