IRS Settlement Blocked by Federal Judge

A federal judge on Tuesday dismissed a settlement agreement between the Internal Revenue Service (IRS) and several religious organizations that would have permitted churches to endorse political candidates to their congregations. U.S. District Judge J. Campbell Barker, appointed by President Donald Trump, made the ruling in Tyler, Texas.

The Johnson Amendment and Proposed Changes

The proposed agreement aimed to exempt traditional religious communications from the Johnson Amendment, a 1954 tax code provision. This amendment prohibits both religious and secular nonprofit organizations from endorsing or opposing political candidates. The IRS entered into the settlement in July to resolve a lawsuit brought by the National Religious Broadcasters (NRB), challenging the Johnson Amendment ahead of the 2024 presidential election.

Ruling Based on Tax Anti-Injunction Act

Judge Barker sided with Americans United for Separation of Church and State, who argued that the court lacked jurisdiction to approve the deal due to the Tax Anti-Injunction Act. This law generally prevents lawsuits that attempt to block tax collection. The judge stated that declaring the Johnson Amendment inapplicable to specific actions would directly impact potential tax revenue.

Reactions to the Decision

Michael Farris, NRB’s general counsel, announced plans to appeal the decision, asserting that the judge overlooked an exemption within the Anti-Injunction Act. Tony Perkins, president of the Family Research Council, expressed disappointment, stating the ruling missed an opportunity to “correct a wrong that strikes at the very heart of American freedom.”

Conversely, Rachel Laser, president of Americans United for Separation of Church and State, praised the decision, emphasizing that the Johnson Amendment will continue to “stop religious extremists from exploiting houses of worship.” The Department of Justice, under President Joe Biden, had previously defended the constitutionality of the Johnson Amendment. The DOJ’s stance shifted under President Trump, who advocated for its repeal.