Lobbyists sparring over whether the final version of the Republican tax bill should roll back a rule that prevents churches and charities from endorsing political candidates could add another wrinkle to the year-end spending debate.
Although a House proposal to scale back what’s known as the Johnson Amendment may not survive the tax overhaul, supporters of the change could turn to a spending measure as Plan B. And groups wishing to preserve the Johnson Amendment, which has been a part of the tax code since 1954, say they will be on alert.
“If it doesn’t make it in the tax bill, we need to watch,” said Lisa Gilbert of Public Citizen, who supports keeping the restrictions in place.
A partial rollback of the Johnson Amendment is already included in a fiscal 2018 House appropriations measure.
The House-passed tax bill would significantly curtail the ban on politicking and allow churches, charities and all 501(c)(3) organizations to endorse or oppose candidates for office without risking their tax-exempt status. It would permit churches and charities to engage only in limited politicking that is part of its regular mission and activities.
The Senate-passed tax measure would not change the Johnson Amendment. Some observers say that may be because such a change would not pass muster under the Byrd rule, which prevents non-budgetary items from being included in a reconciliation bill.
House members and senators are poised to begin negotiations through a conference committee to resolve differences in their two measures, though the Senate version is considered most likely to prevail.
The Joint Committee on Taxation has estimated that the House measure would cost taxpayers $2.1 billion over 10 years. The estimate is based on the idea that political contributors could decide to give more tax-deductible donations to churches and charities. Political donations, by contrast, are not tax deductible.
If the final tax bill retains the Johnson Amendment, Gilbert said supporters of its repeal could look to a must-pass, year-end spending measure as “their last best chance.”
Liberal-leaning organizations such as Public Citizen argue that a repeal or rollback of the measure could turn churches and charities into new vehicles of undisclosed political money.
Mobilizing on tax bill
Even as organizations on both sides of the debate are already talking about the year-end spending deal, they continue to lobby players in the tax process.
“We are putting out the call to our membership, to object to any change in the Johnson Amendment,” said Rabbi Jack Moline, president of the Interfaith Alliance. “When you mix religion and politics, politics always wins.”
Many religious institutions and tax-exempt groups oppose the changes to the Johnson Amendment, but organizations such as the Alliance Defending Freedom have mobilized to urge lawmakers to repeal it entirely. The group provides an action-alert tool urging people to contact their lawmakers.
“As a pastor, you should be free to teach as God leads, without interference from the government,” the group says on its website. “But for more than 60 years, the IRS has used the Johnson Amendment to censor what you and other pastors preach from the pulpit.”
Jim Bopp Jr., a proponent of a full repeal of the Johnson Amendment, said the provision in the House tax bill does not go far enough.
“I think there have been exaggerations on both sides,” Bopp said. “The supporters of this provision think it’s very important, and the opponents are saying this means billions of dollars could be funneled to not-for-profits to affect elections. Regrettably, both of them are wrong.”
Bopp, a leading conservative who has challenged campaign finance laws, said lawmakers should scrap the Johnson Amendment entirely because it muzzles religious leaders’ freedom to express their views on moral and political matters without running afoul of IRS guidelines he sees as vague.
“I think most not-for-profits would be perfectly happy not to endorse candidates if they simply knew they could discuss moral issues, the environment, climate change,” without fear of an IRS probe, Bopp said.
Impact on disclosure
Sarah Levin, senior legislative representative with the Secular Coalition for America, which opposes changes to the Johnson Amendment, said churches and charities can already produce voter guides on policy issues.
“We’re focusing on the conferees and really trying to make the case that this should not be a bargaining chip, this should be a nonstarter,” she said.
She added that supporters of the Johnson Amendment are also raising the issue that churches, unlike other tax-exempt groups, do not have to file a detailed IRS Form 990 that lists receipts, expenses and top salaries. Levin said her group is raising this distinction in the context of debate over the Johnson Amendment.
“This could really open a can of worms they didn’t expect,” she said, adding that her group is making the case that a campaign for new disclosures from churches and other nonprofits could heat up if lawmakers roll back the amendment.
“We’re not trying to directly threaten anything on those terms, but we want them to understand the full scope of the issue and have them thinking about what could happen as a result of undermining the Johnson Amendment,” she said.
Watch: Who’s Getting to Write the Tax Bill