Yesterday's Wisconsin State Journal reports that the Freedom from Religion Foundation has filed suit in a Wisconsin federal district court to challenge the constitutionality of Sec. 107 of the Internal Revenue Code which allows clergy to exempt their cost of housing from income for federal tax purposes. (Background.) It claims that the exemption violates the Establishment Clause by subsidizing churches and by creating excessive entanglement of church and state. A similar challenge to the parsonage allowance filed in California was voluntarily dismissed by plaintiffs earlier this year. (See prior posting.)
UPDATE: Here is the full text of the complaint in the case, Freedom from Religion Foundation, Inc. v. Geithner, (WD WI, filed 9/13/2011). Also, FFRF has issued a press release on its filing of the lawsuit.