Colorado Nonprofit Association opposes efforts underway in 2017 to weaken or repeal the Johnson Amendment. Since 1954, it has protected nonprofits from taking sides in partisan elections and helped elevate nonprofits to places of trust within the communities they serve.
The Johnson Amendment refers to an amendment to Section 501(c)(3) of the U.S. Code, proposed by Senator Lyndon B. Johnson in 1954 that prohibits nonprofits from participating or intervening in any political campaign for or against any candidate for elected public office.
- Ask your Members of Congress to remove provisions weakening the Johnson Amendment from tax reform legislation
- Sign the Community Letter in Support of Nonpartisanship
- Share your thoughts with us on tax reform
For 501(c)(3) organizations, The Tax Cuts and Jobs Act (H.R. 1) would create an exemption to the Johnson Amendment for the content of any political statement which "(A) is made in the ordinary course of the organization's regular and customary activities in carrying out its exempt purpose, and (B) results in the organization incurring not more than de minimis incremental expenses." This provision in similar to H.R.781 and S.264 introduced earlier this year.
In the first draft of H.R.1, this provision only applied to churches. The Joint Committee on Taxation originally estimated that this provision would reduce federal revenues by $2.1 billion between 2018 and 2027 attributable to taxable political contributions becoming tax-deductible.
Another introduced bill, H.R. 172, would repeal the ban entirely.
Rider on 2018 Appropriations Bill
On September 14, the House passed a consolidated 2018 Appropriations bill with a rider to prevent enforcement of violations of the Johnson Amendment against houses of worship or their affilliates unless (1) the highest ranking official at the IRS consents to a determination of unlawful conduct, (2) politicians at the House and Senate tax committees are given 30-days notice of the law-enforcement determination, and (3) an additional 90-days pass before enforcement.
It's unclear if the Senate intends to include this provision in 2018 Appropriations legislation. In the July 7 edition of Nonprofit Quarterly, National Council of Nonprofits' CEO Tim Delaney explains the implications of this rider for the nonprofit sector.
President's Executive Order
The President signed an Executive Order (EO) on May 4 stating that to the extent permitted by law, the Treasury Secretary shall ensure that adverse action is not taken against any individual or religious organization based on speech from a religious perspective on moral or political issues "where speech of similar character has...not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office." Adverse action includes imposition of taxes or tax penalties, delay or denial or tax-exempt status, disallowance of tax deductions for contributions made to 501(c)(3) organizations, or other action that makes unavailable any tax exemption or benefit.
We believe that nonprofits should be open to anyone who will benefit from their services, regardless of political persuasion. Nonpartisanship in speech and action is key to maintaining public trust in nonprofits.
Under current law, nonprofits can advocate on policy issues relevant to their missions without engaging in partisanship. Volunteers and staff can individually engage in partisan political activity as long as they are not representing their nonprofit organizations or using organizational resources.
Weakening or repealing the Johnson Amendment would give a pass to 501(c)(3) organizations that break current law by soliciting tax-deductible donations for candidates, endorsing candidates publicly or siding with one political party, or diverting resources from mission to politics. For the first time, donors who support political activity by nonprofits would receive a tax break. Proposed Congressional and executive actions would interfere with the IRS' discretion to determine violations and enforce the law.
Rather than repealing the Johnson Amendment entirely, several of the Congressional bills would make exceptions for speech [but not expenditures] or for churches [rather than all 501(c)(3) organizations]. Although such exceptions would be more limited in scope, they make the law more ambiguous and complicated.
The IRS could request additional reporting in order to determine whether an nonprofit's political communications are "regular and customary" and whether their expenses are "de minimis." Additional reporting would particularly affect churches and houses of worship because they are currently exempt from filing Form 990 series annual information returns with the IRS. Because using charitable funds for political purposes would still be illegal under most state laws, this change could increase enforcement actions against charities by state charities regulators.
- National Poll- nearly 3 out of 4 voters want to keep existing rules on political activity
- National Association of Evangelicals survey- 89 percent of pastors oppose mixing partisan politics and religion
- Letter from 99 religious and denominational organizations
- Council on Foundations' Legal Analysis- concludes that lobbying against bills to weaken the Johnson Amendment qualifies under the self-defense exception to lobbying reporting for charities and private foundations
- National Council of Nonprofits webpage on nonpartisanship