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

Sunday, December 10, 2017

Zelinsky: What the House-Senate Conference Committee Should Do About The Johnson Amendment

Edward A. Zelinsky (Cardozo), What the House-Senate Conference Committee should do about the Johnson Amendment:

The Johnson Amendment is the part of Internal Revenue Code Section 501(c)(3) which bans tax-exempt institutions from participating in political campaigns. The US House of Representatives has passed H.R.1, the Tax Cuts and Jobs Act, to revise the Code. Section 5201 of H.R. 1 would modify the Johnson Amendment. In contrast, the tax bill pending in the US Senate does not address the Johnson Amendment.

H.R. 1 gets three things right and wrong about the Johnson Amendment. The Conference Committee charged with reconciling the House and Senate tax bills should craft a true safe harbor from the Johnson Amendment limited to internal church communications. This safe harbor should protect internal church communications from government interference while keeping intact Section 501(c)(3)’s general prohibitions on the use of tax-exempt institutions (including churches) for political campaigning and legislative advocacy. ...

[I]f enacted into the Internal Revenue Code, Section 5201 of H.R. 1 would protect the ability of a minister, rabbi, or imam to speak from a congregation’s pulpit without jeopardizing the congregation’s tax-exempt status under Section 501(c)(3) as political campaigning. This amendment of the Code would affirm free expression and religious liberty while retaining the general ban on political campaigning by religious and secular tax-exempt entities. ...

[W]hile Section 5201 would reduce one aspect of the church-state enforcement entanglement stemming from the Johnson Amendment, Section 5201 as passed by the House would still entangle church and state unacceptably. Section 5201 of H.R.1 would require the IRS to survey and evaluate internal church communications to enforce Section 501(c)(3)’s prohibition on substantial legislative advocacy and to determine if such communications are made “in the ordinary course of the (church’s) regular and customary activities.”

In light of the foregoing, the House-Senate Conference Committee should amend Code Section 501(c)(3) to create a true safe harbor for internal church communications which do not cause more than de minimis additional costs. This safe harbor should be limited to churches and other religious congregations and should protect their internal discussions from characterization as either political campaigning or as substantial legislative advocacy. This amendment of Section 501(c)(3) should be a true safe harbor and should not authorize or require IRS inquiry into churches’ “regular and customary activities.”

A true safe harbor along these lines would provide a balanced approach, continuing the Johnson Amendment’s ban on the use of churches and other tax-exempt entities to channel funds to political campaigns while protecting internal church communications from untoward church-state entanglement.

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