History In 1913, the U.S. Constitution was amended granting power to Congress "to lay and collect taxes on incomes, from whatever source derived..." Shortly thereafter, the 63rd Congress enacted the Tariff Act of 1913 instituting the first federal income tax. In this legislation, from the very first income tax levied, exemptions were provided for organizations that operate exclusively for religious, charitable, or educational purposes.
There were absolutely no restrictions on the speech or activities of persons associated with these organizations pertaining to political campaigns or political candidates. That is - until Lyndon B. Johnson, serving as U.S. Senator, in 1954 amended the Revenue Act of 1954 in the final steps of the bills passage. His amendment was not considered in a single public hearing nor was it the subject of a single public testimony prior to passage because it was offered on the floor of the Senate just prior to the final vote. In summary, the Johnson Amendment stated that IRC 501(c)(3) organizations may not participate in or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office. (100 Cong. Record 9604, 1954)
Multiple accounts of this successful attempt to silence nonprofit organizations reveal that the motivation behind the amendment was to terminate the influence of a Texas foundation that had provided financial support to Johnsons opponent in a senatorial primary election campaign.
In 1987, the law was amended again to clarify that the prohibition on political activity also applies to activities in opposition to any candidate for political office.
Currently, 26 U.S. Code § 501(c)(3) states that no substantial part of the activities of the tax-exempt organization would attempt to influence legislation and that the organization does not participate in, or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office.
IMPENDING CRISIS: The Tax Cuts and Jobs Act HR 1 HR 1 includes an amendment that endangers the rights of both religious liberty and free speech for people participating in charitable religious and educational non-profit organizations. HR1 does NOT create a free speech zone in the pulpit as some have reported. In fact, it does quite the opposite.
The language of HR 1 (see below) is vague. It fails to recognize the array of charitable, non-profit organizations that are identified by the IRS under section 501(C)3. Many of these organizations are not "churches". Furthermore, the language of HR 1 speaks of activities that are "exclusively religious". This language is also vague and open to serious debate and litigation.
The balance of the language speaks exclusively to activities within a church or congregational model. Here the language is so specific in application that to rightly adjudicate the intent of the law, the IRS would be empowered to monitor every activity of a church. Will the IRS also be required to monitor every dollar of a church budget to rightly discern "de minimis incremental expense"?
Statements made from the pulpit or any statement from any other nonprofit that touch on a candidate or political campaign would be examined through an undefined lens of regular and customary and incurring not more than de minimis incremental expenses with the unbounded oversight by the IRS. This means the IRS would be given carte blanche authority to invasively scrutinize every communication and every institutional activity and would have the final say on what is regular and customary.
Finally, HR 1 opens a portal for litigation that will tie up non-profits with legal battles and costs for decades. The vague language of this legislation gives the federal courts a platform to define the terms of a basic civil right without legislative intent and outside the representative process. Such a platform of poor legal construction is an invitation to judicial activism and threatens the civil rights of all.
The only way to fix the Johnson Amendment is to simply remove the language that was enacted in 1954. The original intent of the Amendment was vengeance. The thirty words of that provision are a yoke upon the liberties of innocent people. These 30 words are repugnant to the First Amendment and should never have become law in the first place. Democrats, Republicans, Independents, believers and non-believers, all people are endowed with the rights of conscience, religious liberty, and free speech. The repeal of the Johnson Amendment is good public policy for all.
If after such repeal, some should rise in attempt to organize a political campaign organization under the tax-exempt status of IRS section 501(C)3, there are legal remedies at the state and federal level to deal with such duplicity. Such remedies are far more effective than a non-merited restriction on free speech and religious liberty outside the due process of law.