President Trump vowed to “destroy” the Johnson Amendment, which is actually the portion of IRC § 501(c)(3) that says that no charitable organization may “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” What he signed as an Executive Order on May 4 doesn’t actually do that.
Section 2 of the Executive Order says,
Sec. 2. Respecting Religious and Political Speech. All executive departments and agencies (agencies) shall, to the greatest extent practicable and to the extent permitted by law, respect and protect the freedom of persons and organizations to engage in religious and political speech. In particular, the Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury. As used in this section, the term “adverse action” means the imposition of any tax or tax penalty; the delay or denial of tax-exempt status; the disallowance of tax deductions for contributions made to entities exempted from taxation under section 501(c)(3) of title 26, United States Code; or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit.
Distilling the second sentence: “Treasury [shall] not take any adverse action … on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as” within the Johnson Amendment.
In other words, rather than permitting speech that previously has been treated as within the Johnson Amendment, this sentence says that such speech will be protected against adverse action only if it “has … not ordinarily been treated as participation or intervention in a political campaign.”
Now the important umspoken element is that the IRS already has effectively a policy of non-enforcement of the Johnson Amendment against religious organizations, as epitomized by the lack of enforcement against churches which actively promote their own violations of the Johnson Amendment during “Pulpit Freedom Sunday.” This organized effort has been going on for years. And, as Notre Dame Law School’s Lloyd Hitoshi Mayer has shown, there’s no evidence of church audits or other IRS actions against other religious organizations under the Johnson Amendment in recent years, even though the likely incidence of violations is greater than the IRS projects.
So the net effect of an Executive Order saying “all y’all keep doing what you’re doing” is to say “don’t do much at all.” Except it leaves that Sword of Damocles just hanging there. And doesn’t do what was promised.
Maybe the rest of the EO contains something more akin to what President Trump was talking about? Well, Section 1 does say: “It shall be the policy of the executive branch to vigorously enforce Federal law’s robust protections for religious freedom. … The executive branch will honor and enforce those protections.” That might, in some circumstances, be citable in court or in regulatory proceedings. But that is weak sauce, given that the federal government hasn’t actually said that it WON’T “honor and enforce” “Federal law’s robust protections for religious freedom.” And in the face of the specific directions of Section 2, that general promise is unlikely to mean much to tax law.
Same with Obamacare mandates, dealt with in Section 3, but only to the extent of requiring Treasury, Labor and HHS to “consider issuing amended regulations, consistent with applicable law, to address conscience-based objections to the preventive-care mandate.” Not sure there are even any Treasury regulations, even those applying to new Obamacare mandates, that might cover conscience-based objections.
Section 4 of the EO does require the Attorney General to issue guidance “interpreting religious liberty protections in federal law.” But again, only “as appropriate.”
Those panting to complain about gutting the Johnson Amendment were dumbfounded. The ACLU decided not to challenge it, calling it an “elaborate photo-op with no discernible policy outcome.” Even Trump supporters were “underwhelmed.” And, of course, some on both sides didn’t bother to read the EO itself.
Perhaps the most egregious response? The Freedom From Religion Foundation’s legal challenge, filed by their attorney Richard L. Bolton of Madison, Wisconsin, which was filled with typos (for example, P. 5, naming IRS Commissioner “Josh” Koskinen) and getting the EO exactly backwards. FFRF contends that it will suffer “devastating and irreparable” harm because it won’t get the same “lax” treatment as religious organizations, while the EO actually says that religious organizations will get only the same lax treatment as anyone else.
John Pomeranz, of Harmon Curran in Washington, D.C, is leading a panel discussion of the Johnson Amendment this Friday at the May meeting of the American Bar Association’s Tax Section. The panel, which was set up long before the actual text of the EO was drafted, has its work cut out for itself now. Maybe those experts can come up with some reason we and the media should be spending much more time on this non-event.