Why It Matters

Federal enforcement of the Johnson Amendment, which has restricted tax-exempt organizations from endorsing political candidates since 1954, faces a potential overhaul. In August 2024, two churches and two religious nonprofits sued the Internal Revenue Service (IRS) arguing the restriction violated their First Amendment rights. The Trump administration reversed course and joined the plaintiffs, seeking a consent decree that would have barred the IRS from enforcing the amendment against the plaintiff churches. A federal court dismissed the case in March 2026, but the debate over the amendment's constitutionality continues. A Congressional Research Service report on the litigation, published in July 2026, examines the recent case and its implications for Johnson Amendment enforcement.

The Big Picture

The Johnson Amendment, codified in Section 501(c)(3) of the Internal Revenue Code, prohibits all tax-exempt organizations, including churches, from participating in political campaign activity. The amendment contains no explicit exception for churches, though churches receive additional tax benefits beyond other nonprofits, including automatic exemption without application and no annual filing requirement.

The case, National Religious Broadcasters v. Bessent, was filed in the U.S. District Court for the Eastern District of Texas. The government switched sides entirely after the Trump administration took office in January 2025, joining the plaintiffs in seeking a consent decree. The court dismissed the suit on March 31, 2026, for lack of subject-matter jurisdiction under the Tax Anti-Injunction Act and Declaratory Judgment Act.

The D.C. Circuit has upheld the Johnson Amendment against First Amendment challenges, relying on precedent from Regan v. Taxation With Representation of Washington. However, the Supreme Court has not yet considered a First Amendment challenge to the amendment itself. Following the court's dismissal, the Department of the Treasury and the IRS announced plans to issue new guidance on how the Johnson Amendment applies to religious organizations, flagged in the IRS's priority guidance plan for 2025 through 2026.

Congressional efforts to modify the amendment have persisted for years. The Free Speech Fairness Act, which would create an exception for de minimis political activity made in the ordinary course of an organization's regular activities, was introduced in the 114th Congress and reintroduced multiple times, including in the current Congress. An early version of the Tax Cuts and Jobs Act included an amendment excepting churches from the restriction, though that provision was later broadened to all 501(c)(3) organizations and then removed entirely from the enacted law.

The Bottom Line

The dismissal of National Religious Broadcasters v. Bessent does not resolve the underlying constitutional question about whether the Johnson Amendment violates the First Amendment rights of religious organizations. The case's dismissal on jurisdictional grounds leaves the amendment's validity unresolved, and the Trump administration's stated plans to issue new IRS guidance suggest the executive branch may pursue alternative paths to weaken enforcement. The outcome of any future litigation or guidance will have significant implications for campaign finance transparency, as churches lack the donor disclosure requirements that apply to political committees, potentially enabling undisclosed political spending through religious organizations.

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