GOP Changes to Johnson Amendment in Tax Bill Give IRS Even More Power over Churches

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Last year, Donald Trump drew attention to the Johnson Amendment, which prohibits certain tax-exempt groups including churches from participating in political campaigns. Trump called for repealing this amendment, on the grounds that religious organizations should not fear losing tax exemption when discussing politics. On Thursday, the U.S. House of Representatives passed a massive tax bill that addresses the Johnson Amendment, but some have warned that this bill would actually make matters worse for churches, not better.

"I think this language strengthens the IRS in their ability to put 501(c)3s under a microscope," Rob Walgate, vice president of the American Policy Roundtable (AP Roundtable), told PJ Media. He referred to all sorts of nonprofit groups that are tax exempt under section 501(c)3 of the tax code, including churches.

While the GOP bill would supposedly allow churches and other groups to speak about politics without fear, Walgate warned that it would really open the door to IRS investigation into every aspect of a church's operation.

"Every week across the country, in homilies, in sermons, in synagogues, people are being taught from the scriptures principles to apply in their lives that impact how they vote. Do we say, 'That sermon impacted how people vote, that church has to be put under a microscope?'" Walgate asked.

Unfortunately, the language in the Republican tax bill suggests the answer is "yes."

As it stands, the Johnson Amendment bans any 501(c)3 from participating or intervening in "any political campaign on behalf of (or in opposition to) any candidate for public office." Walgate argued that this is an attack on the free speech of 501(c)3 organizations, including churches. The AP Roundtable vice president argued that the whole amendment should be struck down.

The GOP tax bill does not do this, however. Instead, H.R. 1, the "Tax Cuts and Jobs Act," tweaks the tax code, creating a loophole for some organizations to address a political campaign under certain circumstances.

If the bill passes, churches and other 501(c)3 groups could keep their tax-exempt status even if they made statements about political candidates. But those statements would have to be "made in the ordinary course of the organization's regular and customary activities in carrying out its exempt purpose," and they would have to result "in the organization incurring not more than de minimis incremental expenses."

The problem, Walgate warned, rests in the meaning of "regular and customary activities" and "de minimis incremental expenses."

If a church hosts a lunch after a Sunday service — ordering food for the whole congregation — and the pastor speaks about a political campaign, would that violate the tax code because the church spent more than "de minimis incremental expenses"?