Lyndon Johnson

The Non-Repeal of the Johnson Amendment

Lyndon Johnson

Lyndon Johnson, author fo the Johnson Amendment

Much brouhaha has been made over President Trump’s May 4 Executive Order claiming to “totally destroy” the Johnson Amendment. The Johnson Amendment is a 1954 law that bars 501(c)(3) organizations from supporting or opposing candidates for public office. As with much in politics, this is truly much ado about nothing. The Executive Order may serve the President’s political purposes, but at least in so far as the Johnson Amendment is concerned, it does nothing but create headlines.

Trump does not have the power to repeal the Johnson Amendment (only Congress does). The May 4 Executive Order, titled “Promoting Free Speech and Religious Liberty,” is touted as repealing the Johnson Amendment. It directs the Treasury Department (of which the IRS is a branch) to not take “adverse action” against tax-exempt religious organizations that campaign for politicians. The White House has previously said that Trump was planning to direct the IRS to “exercise maximum enforcement discretion” over laws regulating religious organizations. But the Order is mum on that point.

The Order has prompted much hype. However, the Order has no binding effect on the IRS. The Internal Revenue Code contains a prohibition on the executive branch influencing taxpayer audits and investigations. That means the IRS, by law, may not follow the Order.

Even if the Order had any legal effect, California law prohibits 501(c)(3) organization that are tax-exempt under the similar state law from supporting or opposing political candidates and engaging in more than insubstantial lobbying. Officials in California are likely to enforce restrictions on nonprofits. For example, California’s new Attorney General, Xavier Becerra plans to target political nonprofit organizations. Becerra says certain nonprofits mislead donors and influence campaigns. He intends to investigate big-spending nonprofits to make sure they are complying with California law.

So what would happen if the Order actually had any legal effect? Churches would become a loophole in campaign finance laws. They would be able to accept untold and unreported amounts of “dark money” to influence elections. As churches do not file information returns with the IRS like other nonprofits, secret donors would be able to pour money into churches without worrying about disclosure of their identities.

At least for now, despite all the hysteria, the valve of dark money has not been opened by Trump’s Order.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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