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Monday, October 29, 2012

Churches and Campaign Activity: Analysis Under Tax and Campaign Finance Laws

Erika K. Lunder
Legislative Attorney

L. Paige Whitaker
Legislative Attorney

As the 2012 election cycle heats up, there are allegations that some houses of worship have engaged in impermissible activities. Under the Internal Revenue Code (IRC), churches and other houses of worship with tax-exempt 501(c)(3) status may not participate in campaign activity. They are permitted under the tax laws to engage in other activities that are political in nature (e.g., distribute voter guides and invite candidates to speak at church functions) so long as the activity does not support or oppose a candidate. Additionally, religious leaders may engage in campaign activity in their capacity as private individuals without negative tax consequences to the house of worship.

The tax code’s political campaign prohibition is sometimes referred to as the “Johnson Amendment,” after then-Senator Lyndon Johnson, who introduced the provision as an amendment to the Revenue Act of 1954. While some have argued the prohibition violates the free exercise and free speech rights of houses of worship under the First Amendment, the two federal courts of appeals to address the issue have not agreed with this position. In recent years, numerous churches have participated in an event known as “Pulpit Freedom Sunday,” during which pastors preach a political sermon. A purpose of the event is to develop litigation for another challenge to the prohibition on First Amendment grounds. This year, Pulpit Freedom Sunday was held on October 7, 2012.

Separate from the prohibition in the tax code, the Federal Election Campaign Act (FECA) also regulates the ability of houses of worship to engage in electioneering activities.

In the 112th Congress, H.R. 3600 would repeal the Johnson Amendment, thus permitting houses of worship and other 501(c)(3) organizations to engage in campaign activity without jeopardizing their tax-exempt status so long as the other criteria for tax-exempt status are met.

Date of Report: October 9, 2012
Number of Pages: 13
Order Number: RL34447
Price: $29.95

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