Potential Changes Ahead for the Johnson Amendment

April 4, 2017

The new administration has made mention of repealing the so-called Johnson Amendment. What would a repeal mean? In 1954, Lyndon Johnson (later the 36th President of the United States) was the Democratic Senate Minority Leader running for reelection. On the road to reelection, Johnson faced a conservative nonprofit group calling for the election of his opponent.

Johnson, known as a Senate legislator without equal, responded to his opposition by introducing an amendment to Section 501(c)(3) of the Internal Revenue Code, which applies to organizations organized and operated exclusively for religious, charitable, and scientific purposes. In the amendment, tax-exempt status organizations cannot participate or intervene in, which includes the publishing or distributing of statements, any political campaign on behalf of or in opposition to any candidate for public office. In effect, to be exempt from paying taxes one cannot participate in partisan elective politics.

Today, religious groups and charities alike believe the amendment restricts free speech from the pulpit and that the amendment should be repealed. The Alliance Defending Freedom is a major force behind repealing the amendment. The group argues that from the founding of the Country until 1954, Pastors were free to speak boldly from the pulpit about the most crucial social and political issues of the day. Without fear of the IRS restricting or revoking their tax exemption. A commission to study the topic convened by the Evangelical Council of Financial Accountability (ECFA) recommended amending the Johnson Amendment to allow the following.

  • Speech that would be no added cost or a very minimal cost to the organization (such as a sermon, not an expensive advertising campaign).
  • If the speech of the organization would cost more than the minimal amount, then the Johnson Amendment would only prohibit speech that clearly identifies candidates and directly calls for those candidates’ election or defeat.

Defenders of the current law believe partisan politics should not be part of their mission – that they should exist to feed the homeless, provide education, do scientific research, or carryout their mission without political influence or thought. Currently, churches and charities can receive tax-deductible contributions whereas contributions to candidates or political parties are not tax deductible. If tax-deductible contributions were made to churches who promoted or opposed specific candidates, how would such contributions be treated? Furthermore, the equivalent of a Federal Election Commission (FEC) does not exist, which could create pockets of dark money. Are Political Action Committees (PACs) subject to FEC reporting the answer to oversight?

As with healthcare reform, travel restrictions, and Supreme Court nominations, if the Johnson Amendment comes up for legislative change it will no doubt be hotly contested from all sides. Additional information can be found here.