The income tax exclusion of the housing allowance for ministers of the gospel per I.R.C. section 107: First Amendment establishment of religion or free exercise thereof - where should the Warren court have gone?

South Dakota Law Review, Summer, 2009 by John R. Dorocak

Judge Reinhardt's concurrence in the first order of the Ninth Circuit perhaps somewhat uncharitably criticized Judge Tallman:

   If, however, 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, let alone
   achieve the "just resolution" our dissenting colleague purportedly
   seeks. No case our colleague can locate, not even the ghost of
   Justice Frankfurter, could help him avoid this inescapable fact.
   (54)

Despite Judge Reinhardt's rather sharp and possibly unfair characterization of Judge Tallman's view, the concurring opinion seems to be on stronger constitutional footing. While Judge Browning escaped the somewhat critical exchange between Judges Reinhardt and Tallman, he may have been the deciding vote in each of the Ninth Circuit's orders.

C. MARBURY V. MADISON AND THE REQUIREMENT OF CONTROVERSY

As recently as the summer of 2007 the United States Supreme Court again cited Marbury v. Madison (55) for the proposition that "federal courts sit 'solely, to decide on the rights of individuals"' in denying individuals standing to challenge the use of funds appropriated for general discretionary use by the Executive Branch. (56) Hein v. Freedom from Religion Foundation involved yet another question concerning the First Amendment and the Bush administration. (57) The Court denied that the individuals had standing under Flast v. Cohen (58) since they did not sue as taxpayers challenging an exercise of congressional power under the Taxing and Spending Clause. Therefore, the Court denied standing under Frothingham v. Mellon. (59) However, one of the very cases cited by Judge Tallman's dissent in the Ninth Circuit's first order, Liverpool, N.Y. & P.S.S. Co. v. Commissioners of Emigration, involved the Supreme Court's remand to the trial court to determine in part whether "the plaintiff's case ... [is] within the terms of the statute" under examination. (60)

When Marbury v. Madison is cited as the original example of judicial intervention, what is sometimes missed is that the Court invalidated a congressional act that attempted to expand the Court's jurisdiction. (61) This decision might be justified under the logic that the original Framers' intent was that each branch of government could determine constitutional questions relating to matters within that branch. (62)

Conceivably, Marbury and Liverpool both allow reviewing courts to determine constitutional questions involved in the controversy between two litigants when a lower court adjudicated the controversy. The appellate court may remand the case to the lower court for further development of the constitutional question.

D. ANOTHER MATTER: SUIT FOR INJUNCTION OR DECLARATORY RELIEF

In its second order, the Ninth Circuit Court of Appeals appeared to encourage Professor Chemerinsky and others to seek injunctive and declaratory relief concerning the constitutionality of the exclusion for ministers of the gospel. (63) Professor Chemerinsky may have rightly adjudged that the Ninth Circuit would dismiss the appeal on stipulation of the parties, and hoped that by filing his motion to intervene, he could force the court to face the issue. The court chose not to remand the matter, thus leaving tax practitioners to determine whether they can sign a tax return claiming the exclusion under the new substantial authority standard for tax filing positions. (64) Otherwise, presumably, an informant could seek to collect a reward from the I.R.S. for informing upon ministers claiming the exclusion. Such rewards, however, are generally given at the discretion of the Service under I.R.C. section 7623(a); moreover, informants have not fared well in litigation because only a claim of abuse of discretion would likely result in a finding that the Service operated in bad faith. (65)