Update: Court rejects IRS settlement that would have let churches endorse political candidates
Trump judicial appointee blocks effort to sharply limit 1954 Johnson Amendment
When parties to a lawsuit come to an out-of-court settlement, it is routine for courts to approve them. But that isn’t what happened this week as Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas rejected a settlement that would have allowed churches to endorse candidates without losing their 501(c)(3) tax-exempt status.
The ban on political contributions by nonprofit organizations has long been a fixture of American tax law; the prohibition is known as the Johnson Amendment and was passed by Congress in 1954. But the ban has drawn the ire of religious conservatives in recent years, and abolishing or modifying it as it applies to churches has been a goal of President Trump since his first term of office.
Churches opposing the ban seemed to have reach their goal last year when the Internal Revenue Service came to an out-of-court agreement in a lawsuit filed by the National Religious Broadcasters and two Texas churches. That settlement said that the Johnson Amendment had long been interpreted incorrectly and would have allowed the NRB and the churches to make endorsements as long as they did so through their “customary channels of communication.”
Not so fast, said Americans United for Separation of Church and State, which intervened to keep the settlement from going in effect.
Barker, who had been appointed to the bench by Trump, made his ruling on procedural grounds, saying he didn’t have the authority to approve the settlement because of two laws known as the Tax Anti-Injunction Act and the Declaratory Judgment Act.
Barker pointed out that his ruling doesn’t leave the NRB and churches without recourse if they were to be taxed for violating the Johnson Amendment. “A refund suit could be brought if a tax were ultimately collected,” he said in his written opinion. “… A dispute in that posture would also have the benefit of a specific set of facts upon which the IRS made a determination.”
Reaction to ruling
As expected, the NRB denounced the reasoning and Americans United applauded it.
The NRB said in a press statement that it would appeal the ruling to the U.S. Court of Appeals for the Fifth Circuit. The organization said it should not have to put itself in legal jeopardy get a legal determination on the Johnson Amendment:
The plaintiffs here have no other forum to challenge the free speech restrictions imposed by the Johnson Amendment’s limitation on the right of nonprofits to speak about candidates, unless they first violate the law and then become subject to IRS enforcement action. No person should be forced to place themselves in legal jeopardy to protect their constitutional rights. And the Supreme Court has backed this conclusion on numerous occasions.
Americans United stood by its position that the proposed settlement was unconstitutional by treating churches differently than other nonprofit organizations. AU’s CEO Rachel Laser said in a press statement:
We’re glad that the Johnson Amendment will remain a strong bulwark to stop religious extremists from exploiting houses of worship. Tax-free giving to charities should fund charitable work, not partisan politics. The proposed settlement agreement to exempt only houses of worship and not secular nonprofits would have been unfair and a violation of church-state separation. It also would have been unhealthy for our democracy because it would allow churches to become unaccountable political action committees. The court was right to reject the administration’s attempt to use the courts to rewrite our laws.
Original article (July 8, 2025): Group fights IRS determination that churches can endorse candidates
Since 1954, churches and other nonprofit organizations that fall under Section 501(c)(3) of the Internal Revenue Service code have been prohibited from participating in elections for public office. Because of the law, ever since then, with a few defiant exceptions, churches have refrained from endorsing candidates for U.S. president and other elective offices.1
But now, suddenly the IRS says, in effect, that the law has been misinterpreted all this time. In papers filed yesterday in a federal Texas court, the IRS said that when “properly interpreted,” churches are in no danger of losing their tax-exempt status if they endorse candidates as long as they make their endorsements through their “customary channels of communication on matters of faith in connection with religious services.”
When a church communicates its endorsement in that manner, it is not participating in the election, the IRS claimed in the court document.
The proposed settlement does not address related issues such as whether a church could contribute financially to a campaign.
Not so quick, says Americans United for Separation of Church and State, a major church-state interest group that frequently opposes the political agenda of the religious right. Americans United said in a press statement:
The Trump administration’s radical reinterpretation of the Johnson Amendment is a brazen attack on church-state separation that threatens our democracy by favoring houses of worship over other nonprofits and inserting them into partisan politics.
The law affecting nonprofit election participation is known as the Johnson Amendment, as it was introduced by then-Sen. Lyndon Johnson as part of an overhaul of the IRS code. It wasn’t controversial at the time, and the provision later became part of the 1986 overhaul of the IRS code during the Ronald Reagan administration.
Controversy over the provision began about a dozen years ago when various churches of a Christian nationalist or religious-right bent began advocating for its repeal, claiming that it violated their First Amendment rights. Donald Trump made repeal of the Johnson Amendment part of his platform during his 2016 campaign as he successfully sought support from evangelical pastors and parishioners.
Since then, a small number of evangelical pastors have endorsed Trump from the pulpit, and some evangelical churches have distributed voter information material that offered reasons for supporting Trump without explicitly endorsing him. And others have skirted the law in various ways, most blatantly in 2024 when Trump held a campaign rally at a Phoenix, Ariz., church.
Skirting of the law hasn’t been limited to evangelicals. It has become a tradition at some historically black Protestant churches for Democratic candidates to speak during worship services held during campaign season, and at one Philadelphia church last year a pastor praised then-President Joe Biden as the “man we need” without formally endorsing him.
Both Biden and candidate Kamala Harris spoke to worshipers during Sunday services in 2024. Although Trump apparently did not speak during any worship services, he frequently addressed religious organizations, including some with nonprofit status.
The IRS position, explained
The IRS explained its new position in the form of a proposed settlement submitted to the Tyler Division of the U.S. District Court if Eastern Texas the in the National Religious Broadcasts v. Long2 case in which the plaintiffs, which included two churches, sought a judgment allowing all nonprofits to endorse candidates. The settlement, outlining when the Johnson Amendment wouldn’t be enforced, applies only to churches and other houses of worship.
The key part of the IRS rationale for the proposed settlement states:
When a house of worship in good faith speaks to its congregation, through its customary channels of communication on matters of faith in connection with religious services, concerning electoral politics viewed through the lens of religious faith, it neither “participate[s]” nor “intervene[s]” in a “political campaign,” within the ordinary meaning of those words. To “participate” in a political campaign is “to take part” in the political campaign, and to “intervene” in a political campaign is “to interfere with the outcome or course” of the political campaign. ... Bona fide communications internal to a house of worship, between the house of worship and its congregation, in connection with religious services, do neither of those things, any more than does a family discussion concerning candidates. Thus, communications from a house of worship to its congregation in connection with religious services through its usual channels of communication on matters of faith do not run afoul of the Johnson Amendment as properly interpreted.
The court filing also noted that for many houses of worship, “the exercise of their religious beliefs includes teaching or instructing their congregations regarding all aspects of life, including guidance concerning the impact of faith on the choices inherent in electoral politics.”
Update: Americans United files motion to intervene as defendant
The settlement reached by the plaintiffs with the IRS is subject to approval by the district court. Americans United recently filed a motion seeking to intervene as a defendant, meaning in effect that it would argue in court in the position of the federal government if the federal government were interpreting the law as it had before the Trump administration took over.
The motion asks the court to let AU submit what is known as an amicus brief if it can’t formally intervene. Both the plaintiffs and the federal government have indicated they wouldn’t oppose letting the AU submit such a brief, according to the AU document.
The AU said in its filing that the proposed settlement “contains sweeping legal analysis and language that Americans United rejects as procedurally improper, legally unsound, and deeply harmful to the interests it seeks to protect.”
It is not clear which judge would hold a hearing if there is one on whether to accept the proposed settlement. The court’s chief judge is Amos Mazzant III, a Barack Obama appointee.
Churches and other 501(c)(3) nonprofits have long been free under IRS regulations to make endorsements for ballot measures and to lobby Congress and other lawmaking bodies.
Billy Long is the IRS commissioner.