Apparently the IRS is being taken to court because of how it treats Scientology:
There has been a case working its way up through the federal courts challenging this special treatment that Scientology gets. (Why? Probably because Scientology is the religion of Hollywood, and this special treatment decision was reached during the Clinton Administration.)
In this case, a couple named Sklar are arguing that Scientology is allowed to do this, then should be allowed to treat Jewish school tuition the same way. If the courts actually treat the Sklars’ case the same way as Scientology, then they will effectively create a religious school tuition tax deduction.
I agree with Clayton that this exception should just be eliminated. I believe this is something Bush could do through executive order, if I’m not mistaken.