TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, December 11, 2017

Aprill: Leave The Johnson Amendment Alone

Following up on yesterday's post, Ellen P. Aprill (Loyola-L.A.), Amending the Johnson Amendment in the Age of Cheap Speech, 2018 U. Ill. L. Rev. Online ___:  New York Times op-ed:  Leave the Johnson Amendment Alone, by Ellen P. Aprill (Loyola-L.A.):

As the House and the Senate seek agreement on tax reform, they will have to decide the fate of the so-called Johnson amendment. This provision of the Internal Revenue Code prohibits tax-exempt charities from electioneering — that is, from becoming involved in any way in a candidate’s campaign for elected office. The tax reform bill passed by the House last month loosened this prohibition to the point where it would no longer prohibit much. The Senate’s tax reform bill made no change to current law.

Evangelical churches have long objected to the strictures of the Johnson amendment. From the beginning of his candidacy, President Trump promised them that he would repeal it. In fact, as originally proposed, the House tax reform bill would have altered the Johnson amendment only for houses of worship. The House, however, quickly revised its proposal. As finally passed by the House, the provision would permit any tax-exempt charity to support or oppose a candidate as long as “the preparation and presentation of such content” occurs “in the ordinary course of the organization’s regular and customary activities” and does not result in “more than de minimis incremental expenses.”

The breadth of the House proposal is far from clear. When are activities “regular and customary”? When is an expense “de minimis” (meaning insignificant) or “incremental”? If this uncertain standard becomes law, the I.R.S. will need to give charities and potential donors guidance about the meaning of those terms. Whatever rules the I.R.S. announces, they are sure to be fraught with complication.

But no matter what the I.R.S. says, the amendment in the House bill would open the floodgates to politicking by charities. ...

The Senate version of tax reform does not alter the Johnson amendment. Its position should prevail. During reconciliation, the House amendment to the Johnson amendment should be dropped.

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