Judge Blocks IRS Deal Allowing Churches to Endorse Political Candidates

A federal judge has dismissed a settlement between the IRS and religious broadcasters that would have allowed churches to endorse political candidates, citing a lack of jurisdiction due to the Tax Anti-Injunction Act. This decision effectively upholds the Johnson Amendment, a tax code provision preventing nonprofits from endorsing candidates.

Settlement Dismissed, Johnson Amendment Stands

U.S. District Judge J. Campbell Barker, appointed by President Trump, dismissed the agreement between the Internal Revenue Service (IRS) and the National Religious Broadcasters (NRB). The proposed settlement would have permitted churches to endorse political candidates to their congregations without risking their tax-exempt status.

Judge Barker ruled he lacked the authority to approve the pact, which originated from an NRB lawsuit challenging the Johnson Amendment before the 2024 presidential election. Opponents of the agreement, including Americans United for Separation of Church and State, successfully argued that the Tax Anti-Injunction Act prevented its approval. This law generally prohibits lawsuits that attempt to block tax collection.

Jurisdictional Concerns and Tax Implications

Barker explained that declaring the Johnson Amendment inapplicable to specific actions would directly impact potential tax revenue. The initial agreement, reached in July, aimed to define traditional religious communications as exempt from the Johnson Amendment – a 1954 provision barring political endorsements by religious and secular nonprofits.

The dismissal represents a setback for those seeking to relax restrictions on political endorsements by religious organizations. It reinforces the IRS’s ability to enforce the Johnson Amendment and preserves the existing legal framework.

Reactions from Both Sides

Michael Farris, NRB’s general counsel, announced plans to appeal the decision, claiming the judge overlooked an exemption within the Anti-Injunction Act. Tony Perkins, president of the Family Research Council, expressed disappointment, stating the decision missed an opportunity to correct a perceived infringement on American freedom.

Perkins criticized the Johnson Amendment as a restriction on free speech for churches and religious ministries, pledging full support to NRB’s appeal to the Fifth Circuit Court of Appeals. Conversely, Rachel Laser, president of Americans United for Separation of Church and State, hailed the judge’s decision as a victory for the separation of church and state.

Political Context and Ongoing Debate

The Justice Department under President Biden previously defended the constitutionality of the Johnson Amendment. This stance shifted under President Trump, who advocated for its repeal. This highlights the divisive nature of the issue, with differing views on religious freedom, tax law, and the role of religious institutions in politics.

The Johnson Amendment: A Historical Overview

The case underscores the ongoing tension between religious freedom and the separation of church and state in the United States. Named after then-Senator Lyndon Johnson, the Johnson Amendment has been controversial for decades.

Proponents argue it prevents religious institutions from becoming overly politicized and inappropriately influencing elections. Critics contend it violates the First Amendment rights of churches and religious organizations by limiting their political speech.

Future Implications and Appeal Process

The judge’s decision leaves the interpretation and enforcement of the Johnson Amendment unchanged, allowing the IRS to continue investigating potential violations. The NRB’s appeal to the Fifth Circuit Court of Appeals will determine the legal challenge’s ultimate outcome.

The Fifth Circuit’s ruling will significantly impact religious organizations’ involvement in political campaigns, defining the boundaries of free speech and establishing how churches can communicate with their congregations on political issues. This case is a crucial test of First Amendment protections and the application of tax law to nonprofits.