People For the American Way

PFAW and AAMIA Renew Johnson Amendment Support as Tax Bill Threatens to Gut Current Law

People For in Action
PFAW and AAMIA Renew Johnson Amendment Support as Tax Bill Threatens to Gut Current Law

The Johnson Amendment helps keep politics from overtaking the pulpit by prohibiting churches and other nonprofits from getting directly involved with political campaigns while still maintaining critical free speech rights. People For the American Way, PFAW’s African American Ministers In Action, and allied organizations oppose all efforts by President Trump and Congress to weaken or repeal this decades-old law. The latest threat comes in the form of a provision in the Religious Right’s tax bill goodie-bag that may be considered by the House the week of December 17. Our tax bill letter:

Dear Representative:

The 109 undersigned organizations write to strongly oppose the inclusion of any language in H.R. 88, the tax package that may be debated soon by the House, that would repeal or weaken the longstanding federal law that is sometimes referred to as the “Johnson Amendment.” In particular, we oppose Section 407 of the proposed Retirement, Savings, and Other Tax Relief Act of 2018 and urge its removal from the legislation. This provision would gut the Johnson Amendment, transforming charitable organizations into tax-exempt partisan campaign organizations.

The Johnson Amendment protects the integrity and independence of tax-exempt organizations, including charitable nonprofits, houses of worship, and foundations, by ensuring they do not endorse or oppose candidates for public office. Americans overwhelmingly support the existing law because they do not want our charities and houses of worship to be torn apart by partisan campaign politics.

Section 407, however, would allow all 501(c)(3) organizations to make statements endorsing or opposing candidates for public office so long as those statements are made in the “ordinary course” of carrying out their tax-exempt purpose and do not incur more than “de minimis incremental expenses.” Although section 407 might appear to be a narrow exemption to current law, it is actually so broad that it would make the Johnson Amendment nearly meaningless.

Under this provision, any charitable nonprofit organization could endorse a candidate in all the activities it carries out and in all the materials it shares, as long as there is ostensibly another purpose for engaging in those activities or creating those materials. An organization could meet this test even if endorsement activity permeates throughout and even dominates the tax-exempt organization’s work.

This provision would allow donors to fund partisan campaign activities and receive a charitable tax deduction, something that is not available to donors to candidate committees, PACs, or even social welfare organizations. The Joint Committee on Taxation’s analysis of this proposal projects that over 10 years donors would use this tax deduction to knowingly divert $7.7 billion from the public treasury to newly politicized “charitable” organizations that endorse or oppose political candidates.

The provision is also problematic because it includes a vague and undefined test that is subject to IRS discretion. To determine whether tax-exempt organizations are complying with the law, the IRS would have to determine whether an endorsement occurred during the “ordinary course” of carrying out their tax-exempt purpose and whether it amounted to “de minimis incremental expenses.” This is particularly troubling when it comes to houses of worship. To determine whether a house of worship meets this test, the IRS will have to investigate its books, activities, sermons, and correspondence. By inviting that type of scrutiny of internal documents and judgments about religion, this bill actually threatens, rather than upholds, the autonomy and independence of houses of worship.

Under the current law, which has been in place for more than six decades, charitable nonprofits, houses of worship and foundations have maintained robust free speech rights and can speak out on any political and social issue that they see as important. They currently can engage in public debate on any issue, and even, with a few boundaries, lobby on specific legislation. Moreover, in the election arena, they can—on a nonpartisan basis—host candidate forums, hold voter registration drives, encourage people to vote, help transport people to the polls, and invite candidates to speak. They simply cannot endorse or oppose candidates and maintain their special tax-exempt status.

The vast majority of charitable nonprofits, houses of worship, and foundations support keeping the Johnson Amendment as is because it protects all of us from politicians’ and donors’ demands for partisan endorsements and from the diversion of charitable assets to campaign coffers. Indeed, 106 religious and denominational organizations,1 more than 5,800 charitable nonprofit organizations,2 more than 4,500 faith leaders,3 and state charities officials4 have all written to Congress to urge it to protect the Johnson Amendment.

The Johnson Amendment serves as a valuable safeguard that protects our tax-exempt organizations and our political process. Therefore, we firmly urge you to oppose any language in H.R. 88 that would weaken the current law.

We plan to reissue this letter as developments warrant:

  • 12/18/18: Sent to the House Rules Committee regarding its consideration of H.R. 88