Understanding the "Johnson Amendment"

There is some misconception about the scope of the Johnson Amendment, a provision in the Internal Revenue Code sponsored by then Senator Lyndon B. Johnson and enacted by Congress in 1954. The Amendment prohibits all non-profit entities from endorsing or opposing political candidates. It does not apply just to religious institutions.

Although some argue that the Johnson Amendment abridges free speech, one goal of the law is to prevent non-profit entities, which receive tax exempt status from the federal government (and in many cases property tax exemptions from local governments), from directly endorsing or opposing political candidates. In other words, Congress thought it appropriate to ban entities being subsidized by the citizens through the tax exemption from endorsing or opposing a particular political candidate. The Internal Revenue Code does not prevent non-profit organizations from backing or opposing, or lobbying for, political positions such as abortion/right to life, health care, an education agenda and the like. In addition, certain non-profits may engage in political campaigns for or against political candidates as long as such activity does not constitute the non-profit’s primary activity. In fact, one of our clients organized as a 501(c)(4) non-profit to engage in promoting certain social welfare programs.

President Trump’s promise to destroy the Johnson Amendment as it applies to religious non-profits may not in fact comport with the United States Constitution. While a Constitutional analysis is beyond the scope of this blog, Alan E. Brownstein, a law professor at UC Davis School of Law, wrote an excellent article on this topic in Liberty Magazine.

So, what are the repercussions if a non-profit organization does endorse or oppose a political candidate? The IRS has the power to revoke a non-profit organization’s tax-exempt status if it violates the prohibition on endorsing political candidates, but there is no indication the IRS has done so in recent memory. Most clergy don’t seem inclined to wade into the maelstrom that sometimes accompanies a political endorsement. The provision has been in the tax code for more than 60 years and does not seem to have impeded freedom of religion or free speech. Perhaps Trump’s promise is a proposed solution without a problem.