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2017 Issue 6 | Download as a PDF


"Destroying" the Johnson Amendment -- Will efforts to loosen the ban on 501(c)(3) electioneering succeed?


"Destroying" the Johnson Amendment -- Will efforts to loosen the ban on 501(c)(3) electioneering succeed?

Echoing comments he made throughout the 2016 campaign, President Trump announced at the 2017 National Prayer Breakfast that he would "totally destroy" the so-called Johnson Amendment that bans 501(c)(3) organizations from intervening in political campaigns.  The president's May 4 Executive Order "promoting free speech and religious liberty" fell well short of fulfilling that promise, essentially doing nothing to lift the ban on 501(c)(3) electioneering or weaken the enforcement of it.  However, other proposals to change 501(c)(3) involvement in elections are pending.
The Johnson Amendment refers to language in Section 501(c)(3) of the Internal Revenue Code (IRC) stating that organizations exempt from federal income tax under Section 501(c)(3) may not "participate in, or intervene in (including the publishing or distributing of statements) any political campaign on behalf of (or in opposition to) any candidate for public office." The original version of the amendment was introduced in 1954 by then-senator Lyndon Johnson, although there were common law restrictions on 501(c)(3) electioneering prior to the enactment of the explicit statute.
The Johnson Amendment has been the subject of criticism.  Many have criticized the vagueness of the way the IRS evaluates allegations of prohibited 501(c)(3) electioneering based on a review of "the facts and circumstances," rather than clear definitions of what constitutes political activity.  Others have criticized the low level of IRS enforcement in the wake of what appear to be clear cases of 501(c)(3) political involvement. 
Some religious conservatives complain that the Johnson Amendment unjustly inhibits the free exercise of their religious faith as expressed in an electoral context.  Trump has repeatedly called for the Amendment's repeal in the name of religious liberty. The Executive Order issued on May 4 was promoted as an effort to restrict the use of the Johnson Amendment against churches, but the actual text of the order does not appear to change how the IRS evaluates or enforces the ban on political intervention by churches.  Section 116 of a pending appropriations bill in the Republican-controlled House of Representatives, in contrast, would create extra hurdles for IRS enforcement efforts against alleged church electioneering by requiring both approval by the Commissioner of the IRS and prior notice to the Congressional tax-writing committees before the agency could take action against a church for prohibited political activity – extra steps not required for IRS investigation and action against electioneering by other 501(c)(3)s.
Other pending proposals would leave the Johnson Amendment in place, but would seek to define its scope.  The proposed "Free Speech Fairness Act" would treat as non-electioneering statements made in the "ordinary course of the organization's regular and customary activities" and that incur only "de minimis incremental expenses." And we have previously discussed the proposal of the Bright Lines Project, which seeks to create clear definitions of political activity similar to the way in which Congress and the IRS created clear definitions of 501(c)(3) lobbying for charities electing to measure their lobbying under the 501(h) expenditure test.
Those interested in more information on the Johnson Amendment and the road ahead for 501(c)(3) groups may be interested in this week's ABA Tax Section webinar " 'Destroying' the Johnson Amendment and the Future of 501(c)(3) Politicking," scheduled for 1:00 PM EDT on July 12. John Pomeranz, an attorney at Harmon, Curran, will be a speaker and the moderator of the program.
For specific questions about your organization's activities, please contact us. 

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