Last week, May 4th, President Donald Trump signed an executive order “Promoting Free Speech and Religious Liberty.” The signing of the order coincides with National Day of Prayer which occurs annually on the first Thursday in May. The executive order seeks to limit the effect of the Johnson Amendment, a portion of the Internal Revenue Code that limits political participation by tax-exempt 501(c)(3) organizations including churches, universities, and charitable organizations.
President Trump said that he would abolish the Johnson Amendment at the national prayer breakfast in February. Although this executive order does not change the law, it shows that the President is serious about following through on his promise. This same morning, two subcommittees of the U.S. House Committee on Government Oversight and Government Reform heard testimony regarding whether the Johnson Amendment should be modified or repealed altogether.
What is the Johnson Amendment?
The Johnson Amendment is a provision of the Internal Revenue Code that prohibits 501(c)(3) organizations from conducting political campaign activities or issuing public statements endorsing or opposing political candidates. The regulation is named after former President Lyndon B. Johnson who proposed the rule in 1954 while he was serving as a Texas Senator. The Johnson Amendment was included in the Internal Revenue Code of 1954 and again in the Internal Revenue Code of 1986. An organization exempt from paying taxes under section 501(c)(3) of the Internal Revenue code jeopardizes its tax-exempt status by engaging in prohibited political campaign activities under the Code.
Not all political activity is prohibited under the Johnson Amendment. The regulations target partisan activity and allow organizations to offer non-partisan voter education, voter registration, and serve as voting sites. A 501(c)(3) organization can also speak out on individual issues of concern without jeopardizing its tax-exempt status. Ironically, whether to repeal the Johnson Amendment itself is an example of the type of issue a 501(c)(3) organization can support or oppose without violating the law. A 501(c)(3) organization can also engage in some lobbying as long as it is an insubstantial part of the organization’s activity.
What is “maximum discretion” and can the executive order be challenged?
An amendment or repeal of the Johnson Amendment requires that Congress amend the Internal Revenue Code. Because the legislative branch is the law making branch of our government, the President is limited in what he/she can accomplish in signing an executive order. The executive branch can, however, decide to what extent a law will be enforced. When the executive branch wants to limit the effect of a law that is either going to be a difficult and slow change or is unlikely to be changed by Congress, the President will give guidance to federal officers to exercise maximum discretion in enforcing the law. Often, the agency responsible for enforcing the law is already allowed some discretion in how the law is enforced. Maximum discretion allows the agency, in this case the IRS, to choose not to enforce the law.
In 2014, President Barack Obama signed a memorandum to the Department of Homeland Security authorizing maximum discretion in enforcing deportations under immigration law in a manner that helps keep families together. In Texas v. United States, the State of Texas challenged the Deferred Action for Parents of Americans program. The case went all the way to the United States Supreme Court where the ruling of the court of appeals in favor of Texas was affirmed in a 4-4 tie (the vacancy created by Justice Scalia had not been filled at the time). It is possible, even likely, that President Trump’s free speech and religious liberty executive order will face similar legal challenges.
How do religious 501(c)(3) groups feel about what’s happening?
The reaction to the efforts to repeal or amend the Johnson Amendment by churches and other religious organizations is mixed. Some religious groups are pleased that President Trump is following through on his promises to protect religious liberty. Many of these groups see the Johnson Amendment as a violation of free speech wielded by the IRS as a threat in an attempt to silence religious organizations. Other religious organizations fear that repealing the Johnson Amendment will lead partisan churches. The concern is that churches would become focused on political activity and neglect the mission of the gospel. These groups are concerned that without the Johnson Amendment, churches would be allowed to behave in a manner similar to a political action committee (PAC).
In truth, today’s executive order doesn’t change much for religious organizations. That’s because the IRS was already using discretion in avoiding pursuing action against churches that violate the Johnson Amendment. Some groups, such as Alliance Defending Freedom (ADF) in Arizona, are already challenging the enforcement of the Johnson Amendment. ADF has organized a “pulpit freedom movement” which encourages pastors to violate the Johnson Amendment in an effort to promote free speech. The movement actually embraces IRS involvement because it would give a religious group standing to challenge the constitutionality of the Johnson Amendment in court. So far, the IRS has declined to pursue action against a church for violating the Johnson Amendment.
John Litzler directs the Church Law division of Christian Unity Ministries in San Antonio. He is a graduate of the University of Texas and Baylor Law school. He is a member of the SSHS class of 2004.