Johnson Amendment

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The Johnson Amendment is a provision in the U.S. tax code, since 1954, that prohibits all 501(c)(3) non-profit organizations from endorsing or opposing political candidates. Section 501(c)(3) organizations are the most common type of nonprofit organization in the United States, ranging from charitable foundations to universities and churches. The amendment is named for then-Senator Lyndon B. Johnson of Texas, who introduced it in a preliminary draft of the law in July 1954.

In the 2000s, many Republicans, including President Donald Trump, have sought to repeal the provision, arguing that it restricts the free speech rights of churches and other religious groups. These efforts have been criticized because churches have fewer reporting requirements than other non-profit organizations, and because it would effectively make political contributions tax-deductible. On May 4, 2017, President Donald Trump signed an executive order "to defend the freedom of religion and speech" for the purpose of easing the Johnson Amendment's restrictions.[1][2]

Provisions[edit]

Page from the Congressional Record containing a transcript of the passage of the amendment

Paragraph (3) of subsection (c) within section 501 of Title 26 (Internal Revenue Code) of the U.S. Code (U.S.C.) describes organizations which may be exempt from U.S. Federal income tax. 501(c)(3) is written as follows:

(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does 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.[3]

The Johnson amendment is the bolded portion of this provision beginning with the words "and which does not participate in, or intervene in [ . . . ]."[4] The amendment affects nonprofit organizations with 501(c)(3) tax exemptions,[5] which are subject to absolute prohibitions on engaging in political activities and risk loss of tax-exempt status if violated.

[6] Specifically, they are prohibited from conducting political campaign activities to intervene in elections to public office.[7][8] The Johnson Amendment applies to any 501(c)(3) organization, not just religious 501(c)(3) organizations.

The benefit of 501(c)(3) status is that, in addition to the organization itself being exempt from taxes, donors may also take a tax deduction for their contributions to the organization.

According to the Internal Revenue Service, contributions to political campaign funds, or public statements of position in favor of or in opposition to any candidate for public office, are disallowed. However, certain voter education activities as well as voter registration and get-out-the-vote drives, if conducted in a non-partisan manner, are not prohibited.[7]

History[edit]

Lyndon B. Johnson during his tenure as Senator from Texas and before becoming Vice President

The amendment was to a bill in the 83rd Congress, H.R. 8300, which was enacted into law as the Internal Revenue Code of 1954. The amendment was proposed by Senator Lyndon B. Johnson of Texas on July 2, 1954. (Johnson would later serve as President from 1963 to 1969.) The amendment was agreed to without any discussion or debate and was included in Internal Revenue Code of 1954 (Aug. 16, 1954, ch. 736).[9] The provision was considered uncontroversial at the time, and continued to be included when the 1954 Code was re-named as the Internal Revenue Code of 1986 during the Ronald Reagan administration.[10]

Repeal efforts[edit]

In the 2010s, the Alliance Defending Freedom made attempts to challenge the Johnson Amendment through the Pulpit Freedom Initiative, which urges Protestant ministers to violate the statute in protest. The ADF contends that the amendment violates First Amendment rights.[11]

During his 2016 presidential campaign, Donald Trump called for the repeal of the amendment.[12] On February 2, 2017, President Trump vowed at the National Prayer Breakfast to "totally destroy" the Johnson Amendment,[13] White House Press Secretary Sean Spicer announced to the press that the President "committed to get rid of the Johnson Amendment", "allowing our representatives of faith to speak freely and without retribution",[14] and Republican lawmakers introduced legislation that would allow all 501(c)(3) organizations to support political candidates, as long as any associated spending was minimal.[15][16]

On May 4, 2017, Trump signed the "Presidential Executive Order Promoting Free Speech and Religious Liberty."[17] The executive order does not (nor can it[18]) repeal the Johnson Amendment, nor does it allow preachers to endorse from the pulpit, but it does direct the Department of Treasury that "churches should not be found guilty of implied endorsements where secular organizations would not be." Douglas Laycock, speaking to The Washington Post, indicated that he was not aware of any cases where such implied endorsements have caused problems in the past.[19]

Criticism of repeal efforts[edit]

Efforts to repeal the Johnson Amendment have been criticized for a number of reasons. One concern is that political campaign contributions funneled through 501(c)(3) organizations would be tax-deductible for donors, and that such contributions would not be disclosed, since churches are exempt from reporting requirements required of other 501(c)(3) organizations. Under this critique, repeal would have the potential of creating a mechanism where political contributions could be made in violation of relevant campaign financing laws.[20][21][22] Polls have shown that majorities of both the general public and of clergy oppose churches endorsing political candidates.[23] The National Council of Nonprofits released a statement opposing the proposed repeal legislation.[24] Independent Sector, a coalition of nonprofits, foundations, and corporations has also stated their opposition to the proposal to repeal the Johnson Amendment.[25]

See also[edit]

References[edit]

  1. ^ Wagner, John; Pulliam Bailey, Sarah. "Trump signs order aimed at allowing churches to engage in more political activity". The Washington Post. Retrieved 4 May 2017. 
  2. ^ "President Donald J. Trump signs the Executive Order on Promoting Free Speech and Religious Liberty and participates in the National Day of Prayer event in the Rose Garden". The White House/Facebook. 43:29
  3. ^ See paragraph (3) of subsection (c) of 26 U.S.C. § 501 (bolding added).
  4. ^ The parenthetical phrase "(or in opposition to)" was not part of the original text of the Johnson amendment as enacted in the Internal Revenue Code of 1954, but was added by Congress as a clarification, in 1987. See section 10711(a)(2) of the Revenue Act of 1987, Title X of the Omnibus Budget Reconciliation Act of 1987, Pub. L. No. 100-203, 101 Stat. 1330, 1330-464 (Dec. 22, 1987).
  5. ^ Stanley, Erik; Lynn, Barry W. (September 25, 2008). "Tax laws and religious speech: what the Constitution says". Los Angeles Times. Retrieved September 14, 2010. 
  6. ^ Elacqua, Amelia (2008). "Eyes wide shut: The ambiguous 'political activity' prohibition and its effects on 501(c)(3) organizations". Houston Business and Tax Journal. pp. 119 and 141.
  7. ^ a b "The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations". Internal Revenue Service. 2012-08-14. Archived from the original on 2 December 2010. Retrieved 2012-09-09. 
  8. ^ Dorf, Michael C. (6 Oct 2008). "Why the Constitution Neither Protects Nor Forbids Tax Subsidies for Politicking from the Pulpit, And Why Both Liberals and Conservatives May be on the Wrong Side of this Issue". Findlaw. 
  9. ^ Congressional Record-Senate, July 2, 1954, p. 9604
  10. ^ Peters, Jeremy W. (February 2, 2017). "The Johnson Amendment, Which Trump Vows to ‘Destroy,’ Explained". The New York Times. 
  11. ^ Berlinerblau, Jacques (2011-10-05). "Where does church end and state begin? - Georgetown/On Faith". The Washington Post. Retrieved 2011-12-26. 
  12. ^ Smith, Samuel (September 29, 2016). "New Bill Would Repeal Johnson Amendment, Protect Pastors Rights to Endorse Candidates, Political Positions". The Christian Post. Retrieved October 29, 2016. The bill, also known as H.R. 6195, comes as Republican presidential nominee Donald Trump has drawn the appeal of social conservatives and evangelicals by vowing to repeal the Johnson Amendment, which was passed in 1954. Opponents of the Johnson Amendment assert that this regulation has "allowed the IRS to intimidate and censor churches and other nonprofit organizations." 
  13. ^ Phillip, Abby (February 2, 2017). "Trump asks for prayers for Arnold Schwarzenegger’s ratings at National Prayer Breakfast". The Washington Post. 
  14. ^ "2/2/17: White House Press Briefing". The White House/YouTube. February 2, 2017. 
  15. ^ Marcos, Cristina (2017-02-02). "GOP unveils bill to allow political activity by churches". The Hill. Retrieved 2017-02-03. 
  16. ^ "H.R. 781 - 115th Congress". Library of Congress, congress.gov. Retrieved 2017-02-02. 
  17. ^ "Presidential Executive Order Promoting Free Speech and Religious Liberty". The White House. 4 May 2017. Retrieved 5 May 2017. 
  18. ^ Lopez, German (9 February 2017). "Trump’s “law and order” executive orders, explained". Vox. Retrieved 5 May 2017. 
  19. ^ Pulliam Bailey, Sarah (5 May 2017). "Many religious freedom advocates are actually disappointed with Trump's executive order". The Washington Post. 
  20. ^ Tesfaye, Sophia (2017-02-03). "Trump’s plan to "totally destroy" the Johnson Amendment creates a huge campaign finance loophole for churches to exploit". Salon. Retrieved 2017-02-04. 
  21. ^ Jackson, Elizabeth (2016-10-06). "What Would Repealing the Johnson Amendment Mean?". Church Law & Tax. Retrieved 2017-02-04. 
  22. ^ Green, Emma (2016-08-02). "Trump Wants to Make Churches the New Super PACs". The Atlantic. Retrieved 2017-02-04. 
  23. ^ Lewis, Andrew R. (2017-02-03). "Most People — And Perhaps Most Clergy — Don’t Want Political Endorsements In Church". FiveThirtyEight. Retrieved 2017-02-04. 
  24. ^ "National Council of Nonprofits Opposes Latest Efforts to Politicize Charitable Nonprofits and Foundations". National Council of Nonprofits. 2017-02-02. Retrieved 2017-02-04. 
  25. ^ "Statement on Johnson Amendment and Political Activity by Charities". Independent Sector. 2017-02-02. Retrieved 2017-02-04. 

Further reading[edit]

  • Caron, Wilfred R.; Dessingue, Deirdre (1985). "I.R.C. §501(c)(3): Practical and Constitutional Implications of Political Activity Restrictions". Journal of Law & Politics. 2 (1): 169–200. 
  • Davidson, James D. (1998). "Why Churches Cannot Endorse or Oppose Political Candidates". Review of Religious Research. 40 (1): 16–34. JSTOR 3512457.