The Johnson Amendment

The Johnson Amendment refers to a change in the U.S. tax code made in 1954 which prohibited certain tax-exempt organizations from endorsing and opposing political candidates. It is named for Senator Lyndon B. Johnson of Texas, who proposed the bill.

Proposed by then-Senator Lyndon B. Johnson, the amendment affects churches and other nonprofit organizations with 501(c)(3) tax exemptions. In recent years the Alliance Defending Freedom has attempted to challenge the Johnson Amendment through the Pulpit Freedom Initiative, which urges church pastors to violate the statute in protest. The ADF contends that the amendment violates First Amendment rights. Groups engaged in promoting the election or defeat of political candidates may receive tax exempt status under other categories in the tax code. The benefit of 501(c)3 status is that in addition to the organization being tax exempt, donors may also take a tax deduction for their contributions to the organization.

Organizations recognized under Section 501(c)(3) of the U.S. tax code are subject to limits or absolute prohibitions on engaging in political activities and risk loss of tax exempt status if violated.  Specifically, they are prohibited from conducting political campaign activities to intervene in elections to public office.

IRS explanation of the statute

The Internal Revenue Service website elaborates upon this prohibition as follows: ^[4]

Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.

Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.

On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.

The Internal Revenue Service provides resources to exempt organizations and the public to help them understand the prohibition. As part of its examination program, the IRS also monitors whether organizations are complying with the prohibition.