Potential downsides to repeal of the Johnson Amendment
For a long time, various evangelical Christian groups have called for the repeal of the so-called Johnson Amendment to the internal revenue code. Alliance Defending Freedom, an organization founded for the express purpose of defending against intrusion into religious liberty has advocated for the elimination of the Johnson Amendment for many years. More importantly, President Trump campaigned on the promise to repeal the Johnson Amendment and at the National Prayer Breakfast ramped up his comments by vowing to “totally destroy” it. Congressman Steve Scalise (R-La.) introduced the Free Speech Fairness Act – for the second consecutive Congress – and a corresponding bill was also filed in the Senate.
The Law
The Johnson Amendment was included in the federal tax code beginning in 1954 and was introduced by then Senator Lyndon Johnson. It was also incorporated into the 1986 overhaul of the tax code supported by President Reagan. The provision, which is found in section 501(c)(3) dealing with tax exemptions for charitable organizations, bars religious institutions and any other 501(c)(3) charity from taking explicit positions on specific legislation or specific candidates for public office. On the other hand, educating members on general political or moral issues is still allowed. In general, non-religious charity organizations (notably the National Council of Nonprofits and Independent Sector) have expressed opposition to the repeal of the amendment, while religious groups have supported the repeal. However, ending the Johnson Amendment is not without risk to the religious institutions that seek its demise.
Enforcement
Importantly, current enforcement of the Johnson Amendment appears lax. Recently, the Pew Research Center reported on the issue following interviews during the 2016 election cycle.
14% of those who attended religious services in the spring and early summer – say their clergy have spoken out in support of, or in opposition to, one of the presidential candidates during this campaign season.
The Alliance Defending Freedom has encouraged pastors to preach on political issues for several years on “Pulpit Freedom Sunday.” There have been few ramifications for those who ignore the prohibition on political speech. In fact, Kentucky Governor Matt Bevin (R) recently referred to the Johnson Amendment as a “paper tiger.”
But, selective enforcement is not unheard of. In the 1990s a New York church had its tax exempt status revoked after the pastor encouraged his congregation not to vote for Bill Clinton.
What could be the downside of repeal?
First, it is worth noting that estimates of revenue lost from tax exempt charities and the tax deductions for charitable donations is upwards of $50 billion annually. Advocates of additional government programming would undoubtedly love to have that money to fund their agenda. While public policy general supports government subsidy of charitable activities, subsidizing political activity would almost certainly receive less support.
Thus, it is a short step to remove the tax exemptions – both for the churches and their congregants – altogether. Second, once a church begins to engage in political activity, when is it no longer a church?
Inspection and evaluation of the financial records and other religious programming of a particular church (most likely one opposed to a winning candidate) to determine whether that church is now actually a vehicle for political action cannot be far around the corner. Lastly, when churches become merely a venue for “laundering” political contributions to obtain a tax deduction, the end of the tax exempt status is most certainly on the horizon.
In the end, religious leaders should carefully consider the pros and cons of repealing the Johnson Amendment. When the IRS is blocked from your pulpit, it might end up in your business office.
Adam Neil
is shareholder at Murphy & Grantland in Columbia, SC. His law practice focuses on defending businesses & organizations in state and federal courts.