by Marc D. Stern, General Counsel, AJC Global Jewish Advocacy
It is not clear whether President Trump is proposing the wholesale repeal of the Johnson Amendment restricting the partisan activities of tax exempt not-for profits, or only as it applies to religious organizations. If the former, the proposal presents only questions of policy, there being no constitutional ban on religious voices speaking on political matters. If the latter, it is a flat out unconstitutional “naked preference” for religious speech.
Tax exempt status (so-called 501(c)(3) status for the relevant section of the Internal Revenue Code) confers two benefits on not-for-profits. The lesser benefit: they do not pay taxes on their income; the more substantial—that donors get to deduct all (or part) of their contributions from their gross income.
The Johnson Amendment conditions 501(c)(3) status on a beneficiary organization refraining from endorsing or opposing candidates for elective office. The ban is absolute (unlike the ban on legislative activity). The Amendment was the brainchild of then Sen. Lyndon Johnson, and served no high-minded purpose beyond shutting down right-wing organizational opposition to Sen. Johnson.
For the most part, these restrictions are, and long have been, self-enforced by exempt organizations. Although there are borderline questions, for the most part the rules are clear and well understood. The IRS does not have the resources to enforce these restrictions, especially since enforcement would not produce revenue. Worse, enforcement inevitably would lead to changes of IRS partisanship.