In a joint motion filed on July 7,2025, the IRS and plaintiffs, seeking to prevent the enforcement of the IRC Section 501(c)(3) political-campaign-activity prohibition against the plaintiff churches, asked a US District Court to enter a judgment preventing the IRS from enforcing the prohibition on the grounds that such enforcement would unconstitutionally restrict those churches from engaging in political speech. As of the date of this Tax Alert, the parties' motion has not been approved by the Court.

Background

All IRC Section 501(c)(3) tax-exempt organizations — including churches — are prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of or in opposition to any candidate for elective office (i.e., advocating for or against the election of a candidate for federal, state or local public office) (also known as the "Johnson Amendment"). This prohibition also extends to making contributions to political campaigns or funds for candidates for public office. Some political activities, such as general non-partisan voter-education activities and public forums for all candidates in an election, are not considered prohibited political campaign activity. To comply with IRC Section 501(c)(3), such activities must not favor one candidate or group of candidates over others.

The National Religious Broadcasters (NRB), Intercessors for America, and two churches (Sand Springs Church and First Baptist Church Waskom) (collectively, "the Plaintiffs") filed suit against the IRS on August 28, 2024, alleging that the IRC Section 501(c)(3) requirement that certain organizations — including churches — refrain from participating or intervening in campaigns for public office as a condition for tax-exempt status violates the First Amendment right to free speech and exercise of religion. The Plaintiffs' complaint further alleges that this IRC Section 501(c)(3) prohibition also violates churches' Fifth Amendment rights to due process and equal protection, and the Religious Freedom Restoration Act.

According to the joint motion, the Plaintiffs and IRS believe that good faith communication between a house of worship and its congregation on electoral politics is neither participation nor intervention in a political campaign. In support of that argument, the parties cite Executive Order 13798 (May 9, 2017), which instructed the Secretary of Treasury not to take any adverse action against any individual or religious organization on the basis that they have spoken about moral or political issues from a religious perspective.

The Plaintiffs and IRS further state in their motion that, "[f]or 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." The parties further state that interpreting the Johnson Amendment to apply to these communications would violate the Establishment Clause by treating religions that do not speak directly to matters of electoral politics more favorably than religions that do.

On July 10, 2025, Americans United for Separation of Church and State ("Americans United") filed with the Court a motion to intervene as a defendant in the litigation, for the purpose of defending the IRS's ability to enforce the Johnson Amendment against churches. Alternately, Americans United asked the Court for permission to file an amicus curiae brief opposing the proposed consent judgment. On July 17, 2025, the Court granted American United's motion to file an amicus curiae brief but has not yet ruled on its motion to intervene as a defendant.

Implications

At this time, it is not known if the Court will approve the parties' consent motion and issue an order prohibiting the IRS from enforcing IRC Section 501(c)(3)'s restrictions on political campaign activity. If approved, the Court's order likely would be narrow, confined to the Plaintiff churches-Sand Springs Church and First Baptist Church Waskom-and not all churches or all IRC Section 501(c)(3) organizations. The order would also likely apply only to communications between each of those two churches and its "congregation, in connection with religious services through its customary channels of communication on matters of faith, concerning electoral politics viewed through the lens of religious faith," rather than to all communications by those churches concerning electoral politics.

While the Court's potential approval of the motion in this case would only affect the parties involved, it provides insight into the IRS's potential interpretation and enforcement of the Johnson Amendment. The IRS's position in this motion is consistent with its non-enforcement of the IRC Section 501(c)(3) political-campaign-activity prohibition against churches in recent years, which it could expand to other IRC Section 501(c)(3) religious organizations. In the meantime, it would be prudent for an exempt organization not to take any action to support or oppose candidates for public office until the IRS issues formal guidance confirming that it will not enforce the IRC Section 501(c)(3) political campaign activity prohibition against that type of organization.