Gaylor v. Mnuchin in H&R Block tutorials

The nation’s most famous tax preparation service now features a recent Freedom From Religion Foundation legal triumph as part of its tutorials.

H&R Block’s class required for all its tax professionals in the coming year includes a section on FFRF’s historic federal court victory that declared unconstitutional the clergy housing allowance.

The briefing appears under “Module 4: Hot Topics.”


A federal judge issued an order on Dec. 13 in Gaylor v. Mnuchin enjoining enforcement by the IRS of the housing allowance. U.S. District Judge Barbara B. Crabb then stayed her order pending the expected appeal.

Under this IRS provision, clergy have been allowed to designate a portion of salary as a housing allowance, which the minister or other religious figures deducts from taxable income.

The plaintiffs in the case are FFRF Co-Presidents Annie Laurie Gaylor and Dan Barker, and Ian Gaylor representing the estate of Anne Nicol Gaylor, FFRF president emerita. The co-presidents argued that as leaders of a freethought organization they are similarly situated to clergy. Yet when FFRF designated a housing allowance for the co-presidents and as part of Anne Gaylor’s retirement, the IRS refused to allow them to deduct the allowances.

The trio first sued in 2013, winning at the district level, which created a national outcry by the clergy. When the case was appealed, with virtually every denomination chiming in against the ruling, the 7th U.S. Circuit Court of Appeals threw the case out on standing, saying the plaintiffs had failed to request a refund. Taking the cue, they requested refunds, and when they were denied, went back to court.

The scheme costs taxpayers more than $800 million a year in lost revenue, and is a substantial perk awarded only to “ministers of the gospel.” The 1952 law was adopted to reward ministers for fighting “godlessness,” according to the congressional record.

“We’re flattered our historic challenge of this inequity is a hot topic with tax professionals,” says Annie Laurie Gaylor.

FFRF is delighted to be of educational value — for tax preparers and everyone else.

The case was filed on behalf of FFRF by litigator Richard L. Bolton. Gaylor et al v. U.S. Treasury has case number 3:16-cv-00215.

Freedom From Religion Foundation

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