Ms. Giordano is a writer and public speaker who is interested in politics and history.
Should the Johnson Amendment Be Repealed?
Should churches become SuperPacs? Should massive amounts of anonymous money be allowed to flow into the political system? Should people get a tax deduction for political donations? The answer is No! No! God forbid, no!
Yet, there have been efforts to repeal the amendment, including an attempt during the Trump administration. I’ll go into detail about that, but first let me discuss what tax exempt status and the 501(c)(3) designation) means and how the “Johnson Amendment” became law.
What Is the 501(c)(3) Section of the Tax Code?
Churches, like other nonprofit organizations, have a special tax status—they are 501(c)(3) organizations. They are called so because of the following specific provision in the tax code. The words in bold are referred to as the Johnson Amendment.
(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious [ . . . ] purposes [ . . . ] 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) [relating to certain expenditures by charities to influence legislation]), 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.
Tax exemption for nonprofit organizations (charities, churches, museums, and other organizations devoted to the public good) became law over a period of years from 1894 to 1969.(1)
The Johnson Amendment became law in 1954. It was named for then-Senator Lyndon Johnson) (TX D) who introduced the first draft of the amendment.
What Does Being Tax Exempt Mean?
Nonprofit organizations don’t pay income tax because technically there are no profits to tax. They are exempt from other taxes such as property taxes and sales tax. Additionally, donors may take a tax deduction for any donations they make to a non-profit.
Essentially, the law says that tax-exempt status is only given to nonprofit organizations devoted to serving the public in some way—charitable, educational, or religious purposes, among others. It also states that political aims may not be the primary focus of the organization.
The word primary creates a big loophole. It means that some political activity—like advocating legislation—is acceptable. How much political activity is permissible? The law is ambiguous on this point. The IRS must make the determination as to whether or not an organization qualifies for tax-exempt status.
- The NRA (National Rifle Association) was founded to promote firearm competency, marksmanship, and gun safety. It has 5 million members. Its mission has expanded to lobbying for laws that broadly interpret the second amendment right to bear arms and to endorse and donate to political candidates who advance this mission. The NRA rates candidates according to their voting records on gun legislation and endorses candidates. It has set up a political action committee to donate to candidates. In 2016, the NRA gave more than $1 million to political campaigns (almost all to Republicans) and spent another $3 million on lobbying, and its affiliate groups spent over $52 million on political activities for a total of $56 million.(2)
- The Sierra Club is the largest environmental organization in the United States. It has 3 million members. It also has a PAC. In 2016, they donated about $500,000 to candidates (mostly Democrats) and spent about $600,000 on lobbying. Its affiliate groups spent about $900,000 on political activities for a total of $3 million.(2)
- Churches don’t usually set up affiliated political action committees, but they can and do openly lobby for legislation. They can also be involved in “non-partisan” political activities (officially non-partisan, but often obviously designed to benefit one political party over the other). The line is supposed to be drawn at an official endorsement from the church.
Violation of this section of the tax code can put an organization’s tax-exempt status in danger of being revoked. In actual practice, the law is seldom enforced. Nonetheless, the threat of losing tax-exempt status keeps most organizations in line. The violations that do occur are mostly ignored by the IRS. Out of 2000 churches who challenged the law on Pulpit Freedom Sunday, only one was audited, and none were punished.(3)
How Has Donald Trump Tried to Abolish These Safeguards?
During his presidential campaign, Donald Trump openly courted the “religious right,” and they were some of his strongest supporters. The Pew Survey showed that 81% of white Evangelicals voted for Donald Trump (4).
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During the presidential campaign, Donald Trump promised to abolish the Johnson Amendment. When he accepted the presidential nomination at the Republican National Convention, he said, “You have so much to contribute to our politics, yet our laws prevent you from speaking your minds from your own pulpits . . . I am going to work very hard to repeal that language and protect free speech for all Americans."(5) He also made this promise at some of his campaign rallies.
Only Congress can change the law, so Donald Trump did the next best thing. He directed the IRS to ignore violations of the Johnson Amendment by churches and religious groups.
- As President, at the National Prayer Breakfast in February 2, 2017, Trump promised to “totally destroy” this prohibition.(6)
- On May 4, 2017, Trump made good on his promise with an executive order. The order instructed the IRS to exercise “maximum enforcement discretion” saying that the Johnson Amendment was a “burden” on religious groups.
The Johnson Amendment has not been repealed; it just won’t be enforced. However, the “enforcement discretion" applies only to religious groups. Other nonprofit groups must still refrain from endorsing candidates.
The executive order was mainly done for show. It does not change anything. It merely states that "churches should not be found guilty of implied endorsements where secular organizations would not be."
Nonetheless, the executive order is dangerous because of its symbolism. It puts a chink in the wall of separation of church and state. Tax dollars should never be used for religious purposes.
Have There Been Previous Attempts to Repeal the Johnson Amendment?
There have been a number of attempts to repeal this amendment in the past.
The Alliance Defending Freedom contended that the amendment violates the First Amendment right of free speech. The group advanced the “Pulpit Freedom Movement,” which urges Protestant ministers to violate the statute in protest.
Former White House Press Secretary Sean Spicer announced to the press that the President was "committed to abolishing the Johnson Amendment" and to "allowing our representatives of faith to speak freely and without retribution."
Republican lawmakers introduced legislation that would allow all 501(c)(3) organizations to support political candidates, as long as any associated spending was minimal. What does “minimal” mean? Is it another giant loophole? Fortunately, as of this writing, the legislation has not moved forward.
Advocates of repeal of the amendment cite the first amendment right to free speech. They conveniently ignore the part of the first amendment that says “Congress shall make no law respecting the establishment of religion nor prohibiting the free exercise thereof.” It has long been interpreted to mean that no tax money can be used for religious purposes. This part of the First Amendment has been steadily eroded. Repeal of the Johnson Amendment could be a death blow to separation of church and state.
How Does the Public Feel About the Johnson Amendment?
Although most Americans are religious, a recent survey (March 2017) showed that the large majority of Americans do not want the Johnson Amendment repealed—72% of the American public is against preachers politicing from the pulpit. Even 66% of Trump voters did not want the Johnson Amendment repealed.(7)
Another recent poll (March 2017) was conducted by the National Association of Evangelicals among pastors. It showed that almost 90% of evangelical pastors opposed endorsing political candidate from the pulpit.(8)
Additionally, more than 4,500 leaders of religious and secular groups signed a letter opposing the weakening of the Johnson Amendment.
I think repeal of the Johnson Amendment is unpopular for several reasons.
- Many pastors do not want to bring politics into the church. It is divisive. People who disagree with the politics of the pastor might decide to leave the congregation.
- Secondly, government money could lead to government intrusion. Repeal of the Johnson Amendment could lead to less freedom for churches, instead of more.
What Is Your Opinion on This Issue?
Do Churches Already Have Special Tax Advantages?
The law requires that nonprofit groups adhere to certain rules. Religious organizations are exempt from some of these rules.
- They receive a tax-exempt status automatically just by declaring themselves to be a church; they do not need to apply for this exemption as other groups do.
- They do not need to file Form 990 providing information about receipts and spending; other nonprofits must file this form annually.
- They do not need to report the identities of significant donors as other non-profits do.
- They are less likely to be subjected to an audit compared to other nonprofits
Many churches flagrantly take advantage of tax rules. The pastor does not have to pay taxes on the parsonage—a home provided to him by the church. I don’t disagree that modest living accommodations can be provided tax free when the pastor lives in a parsonage attached to the church. But some pastors live in multi-million dollar mansions. Technically, this does not violate the law, but it clearly violates the spirit of the law.
Is Repeal of the Johnson Amendment Good or Bad?
The Johnson Amendment protects both religion and society.
It is good for churches because people don’t want to hear about politics at church. Let church be a politics-free zone.
- People come to church for worship, not for politics.
- The Constitution states that there shall be no political test for office; we surely don’t want there to be a political test for church membership.
- Pastors have the freedom to speak on issues as they see fit, especially when they connect the issues to the teachings of the church.
- Candidates are free to address people in a church and they can even preach a sermon. However, it is only polite to keep their talks on these occasions free of overtly political messages.
The Johnson Amendment is good for society because it respects freedom of religion and protects churches from being used as part of a political “money laundering” scheme for “dark money” (money given anonymously).
Money donated to churches is tax deductible. Obviously political donors will prefer to give money for political campaigns to a church rather than directly to candidates or their SuperPacs in order to get the tax deduction. What's worse, churches do not need to show where their money is spent so no one will ever know how those donations were spent. (For instance, did it go in the pastor's pocket or were kickbacks paid?)
We don’t want churches being taken over by political groups until they are more of a Super-Pac than a church. And we don't want to present another loophole for fraud.
Finally, if a church wants to take an active role in politics and want to endorse candidates, the Johnson Amendment does not stop it from doing so. All it needs to do is renounce its tax exempt status.
(1)You can find more information about the history of the 501(3)(c) section of the tax code on the IRS Website: A History of the Tax-Exempt Sector
(2)OpenSecrets.org is an non-partisan non-profit award-winning website. It provides comprehensive information about federal campaign contributions lobbying expenditures. Click the links to see the data for the National Rifle Association and the Sierra Club
(3)Washington Post August 5, 2016 Trump is Wrong. Pulpit Freedom Already Exists
(7)Independent Sector Poll: Poll: Americans Support the Johnson Amendment
(8) National Association of Evangelicals Poll: Pastors Shouldn't Endorse Politicians
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
© 2017 Catherine Giordano