The Johnson Amendment is the part of Internal Revenue Code Section 501(c)(3) which bans tax-exempt institutions from participating in political campaigns. The US House of Representatives has passed H.R.1, the Tax Cuts and Jobs Act, to revise the Code. Section 5201 of H.R. 1 would modify the Johnson Amendment. In contrast, the tax bill pending in the US Senate does not address the Johnson Amendment.
H.R. 1 gets three things right and wrong about the Johnson Amendment. The Conference Committee charged with reconciling the House and Senate tax bills should craft a true safe harbor from the Johnson Amendment limited to internal church communications. This safe harbor should protect internal church communications from government interference while keeping intact Section 501(c)(3)’s general prohibitions on the use of tax-exempt institutions (including churches) for political campaigning and legislative advocacy.
The first thing H.R. 1 gets right about the Johnson Amendment is that section 5201 of H.R. 1 would protect from the Johnson Amendment the statements of religious organizations. H.R. 1, if enacted into law, would thereby abate the untoward governmental intrusion the Johnson Amendment causes into the internal communications of churches, synagogues, mosques, and other sectarian congregations.
Section 5201 has been criticized by many organizations, with which I often agree, including the Anti-Defamation League and B’nai B’rith International. I suspect that these critics do not appreciate the extent to which the Johnson Amendment interjects the IRS into the internal deliberations of churches, synagogues, mosques, and other religious congregations.
In Revenue Ruling 2007-41, the IRS held that the “issue advocacy” of a tax-exempt group may “function […] as political campaign intervention” and thus cost the group its tax-exempt status under Section 501(c)(3). Thus, for example, a minister who from their pulpit supports or opposes DACA, BDS, the Confederate flag, or same-sex marriage thereby jeopardizes their church’s tax-exempt status under Code Section 501(c)(3) if that advocacy is deemed by the IRS to pertain to “a prominent issue” in a contemporary political campaign.
Such governmental interference with the internal communications of religious congregations is troubling as a matter of free expression and religious liberty. The drafters of H.R. 1 correctly decided to restrict the church-state entanglement the Johnson Amendment causes by requiring the IRS to monitor and evaluate the internal conversations of religious congregations.
The House-Senate Conference Committee should amend Code Section 501(c)(3) to create a true safe harbor for internal church communications which do not cause more than de minimis additional costs.
The second thing H.R. 1 gets right about the Johnson Amendment is the course H.R. 1 doesn’t take. H.R. 1 eschews the more radical alternative articulated by President Trump and others who would abolish the Johnson Amendment altogether. While free speech within religious congregations should be protected from government interference, tax-exempt entities should not be used to funnel tax-deductible contributions to political campaigns. While it protects the statements of tax-exempt organizations, Section 5201 of H.R. 1 properly leaves intact the Johnson Amendment’s general ban on political campaigning by tax-exempt institutions including churches.
Third, Section 5201 only provides protection from the Johnson Amendment if no “more than de minimis incremental expenses” are incurred in making a statement. The protection of Section 5201 would be lost if, for example, a church, synagogue or mosque purchases television time to broadcast a sermon or reproduces the sermon in a newspaper ad. This limitation on incremental expenses provides additional assurance that churches and other tax-exempt entities will not be used to channel tax-deductible contributions to political campaigns.
To summarize , if enacted into the Internal Revenue Code, Section 5201 of H.R. 1 would protect the ability of a minister, rabbi, or imam to speak from a congregation’s pulpit without jeopardizing the congregation’s tax-exempt status under Section 501(c)(3) as political campaigning. This amendment of the Code would affirm free expression and religious liberty while retaining the general ban on political campaigning by religious and secular tax-exempt entities.
The first thing H.R. 1 gets wrong about the Johnson Amendment is the original version of Section 5201 of H.R. 1 would have only protected the internal communications of churches and church conventions. Unfortunately, H.R. 1, as passed by the House, extended this protection to all secular and sectarian tax-exempt institutions. The problem which requires a solution is the Johnson Amendment’s interference with religious congregations’ internal discussions of issues of public import.
Second, Section 5201, if enacted into the Code, would not protect church communications from Section 501(c)(3)’s prohibition against “influence(ing) legislation.” Under current law, if a minister in their sermons supports or opposes particular legislative proposals, they jeopardizes their congregation’s tax-exempt status if these comments are deemed by the IRS to be “substantial.” Section 5201 does not address this statutory impediment to religious expression.
Finally, Section 5201 of H.R. 1, if enacted into law, would require the IRS to determine if a particular statement merits protection from the Johnson Amendment, because the statement is made “in the ordinary course of the (church’s) regular and customary activities” furthering the church’s religious purposes. This statutory language unacceptably entangles church and state by mandating the IRS to monitor churches to determine their “regular and customary activities” and to assess which activities further the churches’ religious purposes.
In sum, while Section 5201 would reduce one aspect of the church-state enforcement entanglement stemming from the Johnson Amendment, Section 5201 as passed by the House would still entangle church and state unacceptably. Section 5201 of H.R.1 would require the IRS to survey and evaluate internal church communications to enforce Section 501(c)(3)’s prohibition on substantial legislative advocacy and to determine if such communications are made “in the ordinary course of the (church’s) regular and customary activities.”
In light of the foregoing, the House-Senate Conference Committee should amend Code Section 501(c)(3) to create a true safe harbor for internal church communications which do not cause more than de minimis additional costs. This safe harbor should be limited to churches and other religious congregations and should protect their internal discussions from characterization as either political campaigning or as substantial legislative advocacy. This amendment of Section 501(c)(3) should be a true safe harbor and should not authorize or require IRS inquiry into churches’ “regular and customary activities.”
A true safe harbor along these lines would provide a balanced approach, continuing the Johnson Amendment’s ban on the use of churches and other tax-exempt entities to channel funds to political campaigns while protecting internal church communications from untoward church-state entanglement.
Featured image credit: The western front of the United States Capitol by Architect of the Capitol. Public domain via Wikimedia Commons.