The Battle Over Churches, Politics, and Tax Exemptions
What is the Johnson Amendment?
Congress was in the process of modernizing the tax code in 1954 when then-Senator Lyndon Baines Johnson offered a provision clarifying reasonable boundaries between electoral politics and tax-exempt activities, including religious exercise. It was so noncontroversial at the time that Congress incorporated the Johnson Amendment without extended debate and Republican President Dwight D. Eisenhower signed it into law. The Johnson Amendment bars 501(c)(3) tax-exempt organizations, including churches and charities, from directly or indirectly participating in political campaigns for or against candidates. Violations can, in theory, lead to loss of tax-exempt status or excise taxes, though such penalties have historically been rare.
Current Legal Status
The Johnson Amendment remains part of the Internal Revenue Code and still technically applies to all 501(c)(3) organizations, including churches, charities, and educational institutions. It continues to prohibit these organizations from directly or indirectly intervening in political campaigns for or against candidates. While the Johnson Amendment remains federal law and has not been repealed by Congress or struck down by the courts, its scope and enforcement—especially for churches—has been actively contested and narrowed through administrative and legal actions.
The 2025 IRS Consent Decree Controversy
The National Religious Broadcasters Case
On July 7, 2025, the IRS entered into a proposed consent judgment in National Religious Broadcasters, et al. v. Bessent (formerly v. Long), filed in the U.S. District Court for the Eastern District of Texas (Case No. 6:24-cv-00311-JCB). In this case, two Texas churches (Sand Springs Church and First Baptist Church Waskom), along with National Religious Broadcasters and Intercessors for America, challenged the constitutionality of the Johnson Amendment, arguing it violated their First Amendment rights to free speech and free exercise of religion.
Rather than defending the Johnson Amendment in court, the IRS agreed to a proposed consent decree stating that the Johnson Amendment, “as properly interpreted,” does not prevent a “house of worship” from speaking “to its congregation, through customary channels of communication on matters of faith in connection with religious services, concerning electoral politics viewed through the lens of religious faith.”
Scope and Limitations of the Proposed Decree
The proposed consent decree is formally narrow: it directly binds only the named plaintiffs in the case. However, it has prompted significant concern among nonprofit and church-state advocates that the IRS is effectively creating a de facto carve-out for all houses of worship without issuing formal nationwide regulations or guidance. Critics argue that once the IRS accepts this interpretation for specific plaintiffs, it would be exceedingly difficult to enforce the Johnson Amendment against other similarly situated religious organizations.
The decree’s language about “customary channels of communication” has proven particularly controversial. During oral arguments on November 25, 2025, Judge J. Campbell Barker questioned what activities would qualify under this broad language. While plaintiffs argued it is limited to worship services, critics note that in the modern era, “customary channels” could include livestreamed sermons on YouTube, podcasts, and other digital platforms accessible to the general public—not just congregants.
Opposition and Intervention Attempts
Americans United for Separation of Church and State (AU) sought to intervene in the litigation to oppose the consent agreement. On December 12, 2025, Judge Barker denied AU’s motion to intervene as a party, ruling that AU lacked a direct, legally protectable interest in the potential enforcement of the Johnson Amendment against the plaintiffs. However, the court allowed AU to file amicus briefs and participate in oral arguments.
In a letter dated November 20, 2025, six Democratic Senators and nine Congressional Representatives, including Representatives Jamie Raskin, Jared Huffman, and James Clyburn, along with Senator Ron Wyden, urged Acting IRS Commissioner Scott Bessent to withdraw the proposed consent decree. The letter argued that the decree would violate the First Amendment’s Establishment Clause and the Fourteenth Amendment’s Equal Protection Clause by creating exemptions for religious entities that are unavailable to secular nonprofits.
Current Status of the Case
As of February 2026, the case remains pending before Judge Barker. Americans United for Separation of Church and State did not appeal the denial of its intervention motion within the 60-day window, and the court reopened the case in early February 2026. A final decision on the proposed consent decree is anticipated before spring 2026.
Enforcement Trends and Political Context
Enforcement of the Johnson Amendment against churches was already extremely rare before the 2025 consent decree. A 2017 Trump executive order had instructed the Treasury Department to be lenient in applying Johnson Amendment rules to religious entities, effectively softening enforcement in practice. The current Trump administration has renewed political efforts to severely limit or repeal the Johnson Amendment.
However, Congress has consistently rejected attempts to repeal or modify the Johnson Amendment. The Trump administration’s approach through the consent decree has been criticized as an “end run around Congress” that attempts to achieve through litigation and administrative settlement what could not be accomplished through the legislative process.
New York State’s Legislative Response: The Nonpartisan Pulpit Act
In direct response to the federal developments, legislation was introduced in the New York State Legislature on August 13, 2025. Senate Bill S8475 (sponsored by Senator James Skoufis) and its Assembly companion bill A9067 (sponsored by Assemblymember Tony Simone), collectively known as the “Nonpartisan Pulpit Act,” would amend both the New York State Tax Law §27-a and the Real Property Tax Law §§420-a and §420-b.
Key Provisions
The legislation would suspend tax-exempt status at the state level for any nonprofit organization that engages in political campaign activities as defined under the law. Organizations found to be in violation would lose eligibility for:
• Sales and use tax exemptions
• Real estate tax exemptions
• Corporate tax exemptions under 20 NYCRR 1-2.11(b)(6)
The bills build upon previous New York legislation. During the first Trump administration, in 2019, then-Governor Andrew Cuomo signed legislation (S.4347/A.623) that codified the Johnson Amendment into New York law by amending one section of the state tax law. The 2025 legislation goes significantly further by creating comprehensive enforcement mechanisms and expanding the scope of tax exemptions that could be lost.
Definition of Political Campaign Activity
The legislation defines “political campaign activity” as “any action, communication or expenditure which constitutes participation or intervention, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for office.” Specifically prohibited activities include:
(a) Making, soliciting, or facilitating, directly or indirectly, any contribution to or for the benefit of any candidate for public office’s authorized political committee or political party.
(b) Publishing or distributing, by any medium, including but not limited to written, electronic or oral statements, that expressly advocate for the election or defeat of a clearly identified candidate for public office.
(c) Using or permitting the use of the organization’s assets, facilities, staff, mailing lists, websites or other resources to support or oppose a candidate for public office, except as explicitly permitted under the safe harbor provisions.
Permissible Activities and Safe Harbors
The legislation carefully delineates permissible activities that would not be considered political campaign activity, including:
• Engaging in lobbying or advocating for the adoption or rejection of legislation
• Conducting non-partisan analysis, study or research and making the results available to the public
• Providing non-partisan voter education
• Encouraging participation in the electoral process through non-partisan voter registration
Safe harbor activities are also defined, including:
• Candidate appearances—only if all candidates are invited to participate equally; no communication about the event favors one candidate over another; and political fundraising does not occur
• Providing goods or services to candidates—so long as those goods and services are made available on the same terms to all candidates and the provision is part of the organization’s regularly conducted activities
• Website content or links—so long as the information is provided equally to all candidates and is unbiased or presented in a manner that does not indicate support or opposition to a particular candidate
Impact and Enforcement
The legislation is expansive and would impact not only nonprofits domiciled in New York State but also non-domiciled organizations operating or holding assets in the state. Section 5 of the bill directs the New York State Department of Taxation and Finance to establish rules and regulations to administer and enforce the provisions.
Senator Skoufis stated: “Most New Yorkers want politics to stay where it is—in political debates, newspaper op-eds, and the comment section on Facebook. Not in museums, soup kitchens, and certainly not in churches.” Assemblymember Simone added that “Community organizations succeed when they remain safe havens from partisanship.”
Current Legislative Status
As of February 2026, both S8475 and A9067 remain pending in committee. Senate Bill S8475 is assigned to the Senate Rules Committee, while Assembly Bill A9067 is in committee in the Assembly. Neither bill has advanced to the floor for a vote in either chamber.
However, the lack of movement thus far suggests that the legislation may face significant political obstacles, particularly given concerns about enforcement against houses of worship and potential constitutional challenges.
The fate of the legislation may also be influenced by the outcome of the federal National Religious Broadcasters case. If Judge Barker approves the consent decree, it could strengthen arguments for state-level protections. Conversely, if the consent decree is rejected and the Johnson Amendment is upheld at the federal level, the urgency for state legislation may diminish.
Outstanding Questions and Concerns
Numerous concerns have been raised about New York’s effort to reinforce the Johnson Amendment at the state level:
Will Other States Follow?
A critical question is whether other states will enact similar legislation or whether New York will remain an outlier. If New York stands alone, the impact of the legislation may be limited, as organizations could simply avoid operating in New York or relocate their activities to other states.
Constitutional Challenges
If the U.S. Supreme Court takes up a Johnson Amendment case and determines—following reasoning similar to Citizens United v. FEC—that the Johnson Amendment violates nonprofit corporations’ right to free speech, state-level enforcement could be deemed unconstitutional as well. The proposed federal consent decree, if approved, could serve as a stepping stone toward such a Supreme Court challenge.
Practical Implementation Challenges
The safe harbors, while well-intentioned, may prove impractical when multiple candidates are running for the same position. For example, if ten candidates are running for a single office, must a nonprofit invite all ten to speak at an event to maintain safe harbor protection? What happens if some candidates decline to participate?
Enforcement Against Houses of Worship
The most sensitive question involves enforcement against religious organizations. Who will enforce the prohibitions if clergy endorse candidates from the pulpit? Will houses of worship actually lose their tax exemptions, potentially forcing churches, temples, and mosques to close their buildings as they lose valuable real estate tax exemptions? This scenario could create significant First Amendment concerns and political backlash.
De Minimis Standard
Is there a de minimis test that accounts for an isolated, errant comment by clergy or nonprofit leaders? The legislation does not explicitly address whether a single inadvertent statement would trigger loss of tax-exempt status or whether there is a threshold of activity required before enforcement action is taken.
Financial Impact
Democratic lawmakers have raised concerns about the fiscal impact of weakening the Johnson Amendment. The Congressional Joint Committee on Taxation estimated in 2017 that repealing the Johnson Amendment would cost taxpayers .1 billion over 10 years. If the federal consent decree or state legislation leads to increased political activity by tax-exempt organizations, contributions could be redirected from taxable sources to tax-deductible donations, reducing tax revenue while subsidizing political speech.
Equal Protection Issues
If the federal consent decree is approved and applies only to the named plaintiffs, it could create equal protection violations by treating similarly situated organizations differently. Conversely, if other organizations successfully petition for the same exemption, it could lead to a cascade of litigation that effectively nullifies the Johnson Amendment without Congressional action.
Looking Ahead
As of February 2026, the fate of both the federal consent decree and New York’s Nonpartisan Pulpit Act remains uncertain. Judge Barker’s decision on the National Religious Broadcasters case is expected soon and will have significant implications for the future of the Johnson Amendment nationwide.
The New York legislation remains pending in committee. If enacted, it would create the first comprehensive state-level enforcement mechanism for Johnson Amendment principles, potentially serving as a model for other states—or standing as an isolated effort in a changing landscape of church-state relations and campaign finance law.
What is clear is that after 70 years of relative stability, the Johnson Amendment faces its most serious challenge yet. The outcome of this controversy will shape the intersection of tax policy, campaign finance, religious freedom, and the separation of church and state for years to come.
Sources
National Religious Broadcasters v. Bessent, No. 6:24-cv-00311-JCB (E.D. Tex.)
New York State Senate Bill S8475 (2025-2026)
New York State Assembly Bill A9067 (2025-2026)
Letter from Representatives Raskin, Huffman, Clyburn, and Senator Wyden to Acting Commissioner Scott Bessent (November 20, 2025)
National Council of Nonprofits, “Protecting the Johnson Amendment and Nonprofit Nonpartisanship”
Interfaith Alliance, “What is Happening with the Johnson Amendment?”
Tax Notes, “Parties Square Off in Johnson Amendment Oral Arguments” (November 26, 2025)
Tax Notes, “Organization Not Allowed to Intervene in Johnson Amendment Case” (December 12, 2025)
The National Law Review, “IRS Enters into Consent Decree Limiting Application of Johnson Amendment” (September 12, 2025)
Religious News Service, “Democrats urge Trump administration to keep ban on letting churches endorse” (November 20, 2025)
