Chemerinsky Says He’ll File Own Suit Over Religious Tax Exemption

Tuesday, August 27, 2002

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Chemerinsky Says He’ll File Own Suit Over Religious Tax Exemption

By a MetNews Staff Writer

USC law professor Erwin Chemerinsky said yesterday he will file suit challenging the federal law that allows clerics to receive housing from the religious institutions that employ them without paying taxes on the value thereof.

Chemerinsky, who is a visiting professor at Duke University School of Law this semester, made the comment after a Ninth U.S. Circuit Court of Appeals panel denied him leave to intervene in an ongoing appeal.

Rev. Richard D. Warren and his wife appealed a Tax Court ruling that Internal Revenue Code Sec. 107(2) permits a parson to exclude from taxable income only the fair market rental value of his or her dwelling. The Warrens claimed they had a right under the code to deduct all of their actual housing costs, while the government argued for the position taken by the Tax Court.

In an unusual order, the Ninth Circuit panel last March asked Chemerinsky to file an amicus brief on whether the court should rule on the constitutionality of the exclusion and if so, whether the exclusion violates the Establishment Clause.

Chemerinsky urged the panel to strike down the exemption, while Warren and the government both argued that a ruling on the constitutional issue would be inappropriate.

After the briefs were filed, Congress passed, and the president signed, legislation adopting the position espoused by the IRS, prospectively only. The agency then settled the pending suit by agreeing to allow Warren to take the full exemption he was claiming for the years 1993 to 1995.

Chemerinsky promptly moved for leave to intervene. But Judge Stephen Reinhardt and Senior Judge James Browning, in yesterday’s published order, said there was no “compelling basis” for intervention, since Chemerinsky can file his own lawsuit as a taxpayer.

It would be unusual, the judges said, to allow an intervenor to raise an issue that was not considered in the trial court.

“Given the weighty nature of Prof. Chemerinsky’s constitutional arguments, they are better suited for consideration in the first instance in a traditional procedural posture before a district court,” they wrote. “If Prof. Chemerinsky chooses to file a separate taxpayer action, the new parties could plead their claims and defenses more specifically and obtain whatever limited discovery and evidentiary proceedings are necessary.”

Judge Richard Tallman, who had pointedly dissented from Chemerinsky’s appointment as amicus and suggested his colleagues had prejudged the constitutional issue, concurred separately. The settlement, he said, made the issue of intervention moot.

“Nothing more need be said,” he commented.

Chemerinsky told the METNEWS the case should proceed expeditiously once he files suit.

“I’ve done all the briefing,” he said. “Everybody else has done their briefing.”