GOP Changes to Johnson Amendment in Tax Bill Give IRS Even More Power over Churches

by Tyler O'Neil: Last year, Donald Trump drew attention to the Johnson Amendment, which prohibits certain tax-exempt groups including churches from participating in political campaigns. Trump called for repealing this amendment, on the grounds that religious organizations should not fear losing tax exemption when discussing politics. On Thursday, the U.S. House of Representatives passed a massive tax bill that addresses the Johnson Amendment, but some have warned that this bill would actually make matters worse for churches, not better.

"I think this language strengthens the IRS in their ability to put 501(c)3s under a microscope," Rob Walgate, vice president of the American Policy Roundtable (AP Roundtable), told PJ Media. He referred to all sorts of nonprofit groups that are tax exempt under section 501(c)3 of the tax code, including churches.

While the GOP bill would supposedly allow churches and other groups to speak about politics without fear, Walgate warned that it would really open the door to IRS investigation into every aspect of a church's operation.

"Every week across the country, in homilies, in sermons, in synagogues, people are being taught from the scriptures principles to apply in their lives that impact how they vote. Do we say, 'That sermon impacted how people vote, that church has to be put under a microscope?'" Walgate asked.

Unfortunately, the language in the Republican tax bill suggests the answer is "yes."

As it stands, the Johnson Amendment bans any 501(c)3 from participating or intervening in "any political campaign on behalf of (or in opposition to) any candidate for public office." Walgate argued that this is an attack on the free speech of 501(c)3 organizations, including churches. The AP Roundtable vice president argued that the whole amendment should be struck down.

The GOP tax bill does not do this, however. Instead, H.R. 1, the "Tax Cuts and Jobs Act," tweaks the tax code, creating a loophole for some organizations to address a political campaign under certain circumstances.

If the bill passes, churches and other 501(c)3 groups could keep their tax-exempt status even if they made statements about political candidates. But those statements would have to be "made in the ordinary course of the organization's regular and customary activities in carrying out its exempt purpose," and they would have to result "in the organization incurring not more than de minimis incremental expenses."

The problem, Walgate warned, rests in the meaning of "regular and customary activities" and "de minimis incremental expenses."

If a church hosts a lunch after a Sunday service — ordering food for the whole congregation — and the pastor speaks about a political campaign, would that violate the tax code because the church spent more than "de minimis incremental expenses"?

If a pastor preaches about the Ten Commandments and then applies them to the issue of abortion ("do not kill") or greed in business ("do not steal") or redistribution of wealth ("do not covet"), and that sermon comes just before an election with a pro-abortion candidate, or a pro-business candidate, or a socialist candidate, is that sermon no longer for "religious purposes"?

Who decides these complicated matters? Your friendly neighborhood Internal Revenue Service. In 2014, the city of Houston subpoenaed churches to deliver sermons based on their supposed political content. How long before the IRS starts doing the same?

Rather than freeing up churches and 501(c)3s to speak about political issues, the new tax bill would arguably enslave them to the IRS. It would be up to the IRS to determine whether a sermon on abortion fell outside the "regular and customary activities." The IRS would decide whether or not a church potluck — perhaps with a political theme — is considered a "de minimis incremental expense."

Instead of tweaking the Johnson Amendment, Walgate argued for scrapping it entirely. "Just because you're a 501(c)3, you don't give up the constitutional right of free speech," he argued. "Why are we giving some organizations more rights than others?"

The AP Roundtable vice president explained the history of the Johnson Amendment. After the very first income tax was levied in 1913, there were no restrictions on tax-exempt organizations when it came to supporting political campaigns or candidates. Then-Senator Lyndon B. Johnson changed that in 1954.

That year, Johnson was running for re-election to the U.S. Senate, and a conservative nonprofit group published material advocating for Johnson's primary opponent, Dudley Dougherty. While there was no church involved, the Johnson Amendment changed the tax code for all 501(c)3 organizations, including churches.

Neither President Trump nor the Republican Congress has presented a straight repeal of the Johnson Amendment. In May, Trump signed an executive order directing the IRS to "alleviate the burden" of the amendment on churches.

"We weren't happy with that because it doesn't address the problem," Walgate told PJ Media. "The problem is that language [in the amendment] and it needs to be removed."

He criticized the GOP tax bill for the same reason. "If this is a bad idea, then we don't need to add other language to try and fix the bad idea, just repeal the 31 words" of the Johnson Amendment, Walgate argued.

Many have defended the Johnson Amendment, arguing that pastors and other religious leaders should not be endorsing candidates anyway.

Others have suggested that since 501(c)3s do not pay taxes, if they were to support political candidates, that would effectively involve the government subsidizing elections. The funds a nonprofit would otherwise give to the government would be used to support specific candidates, who could then use government to enrich that nonprofit.

The AP Roundtable vice president admitted that religious leaders should not be using their position to endorse candidates. "There's no one scouring around the country saying, 'We want our pastor, our priest, our rabbi telling us who to vote for," he said. "It's a free speech issue, and people shouldn't be punished because they want to speak out."

"Give me another example where you lose a constitutional right because you don't pay taxes," Walgate challenged. "There are people who don't pay taxes. Do they lose constitutional rights?"

He noted that there was "no debate, no argument" over the amendment when Johnson first sponsored it. "They just thought it was a good idea in the fifties, and we blindly follow suit."

Walgate also warned against the idea that opposing the Johnson Amendment is only an issue for conservative Christians. "There are many churches in this country that lean left. They should have the same rights to free speech as churches that don't," he argued.

"It's not about what candidate you would or would not support, it's about having the freedom to speak," Walgate continued. "The Constitution includes everybody."

To illustrate the point, he referenced Jeremiah Wright, Barack Obama's former pastor who infamously declared, "God d**n America!" in a sermon. "Should Jeremiah Wright have had the ability to say some of the things he did and not have the IRS coming down his throat?" Walgate asked.

This past week, Nation of Islam leader Louis Farrakhan declared that Donald Trump must repent for America's sins. Should these comments put his mosque's 501(c)3 status in jeopardy? What if he had made these comments in October of last year?

The Johnson Amendment presents very deep questions on both sides. Should the IRS decide what is and is not acceptable political speech for 501(c)3 organizations? If a tax-exempt group contributes time or resources to a political campaign, does that implicate the government in supporting that candidate?

The Republican tax bill does not answer these questions. Instead, it attempts to tweak the Johnson Amendment enough to satisfy leaders like Walgate without striking the language entirely. In doing so, the bill risks giving the IRS tremendous power over churches, mosques, synagogues, and countless other nonprofit groups.

Members of Congress must determine where they stand: with free speech against the Johnson Amendment or against potential abuse and for it. The current tax bill's shifty middle ground just makes everything worse.
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Tyler O'Neil is Assistant Editor of PJ Media, Tyler O'Neil is a conservative fundraiser and commentator. He has written for numerous publications.

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