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House Approves Bill Allowing Churches to Engage in Politics Without Losing Tax-Exempt Status

Chris Gaetano
Published Date:
Jul 20, 2018

The House of Representatives yesterday approved a bill that would prevent the IRS from revoking the tax-exempt status of churches that engage in political activities, according to Politico. The measure was nested inside a larger funding measure for the agency, which was approved 217-199. 

Current IRS tax rules state that tax-exempt 501(c)(3) organizations, which include most churches, are “absolutely prohibited” from contributing to political campaign funds or making public statements of position, whether verbal or written, in favor of or in opposition to any candidate for public office. Doing so could result in the denial or revocation of that church’s tax-exempt status. So far, there has only been one instance in which the IRS has revoked a church’s tax-exempt status on these grounds: the Pierce Creek Church in Binghamton, N.Y., which, in 1992, bought full-page ads in USA Today and the Washington Times telling Christians to beware of Bill Clinton due to his positions on abortion, condom distribution and gay rights. 

Conservatives have long chafed against this rule, having tried before to repeal it, saying that the ban represents an unacceptable restriction on free speech and religious freedom. For many years the right-wing group Alliance Defending Freedom has advocated for removing the rule, and has regularly organized what it calls the annual "Pulpit Freedom Sunday," which encourages religious leaders to break this rule in order to provoke a legal confrontation with the IRS. The group praised the repeal measure when its language was first included in the overall bill this past November. 

“America’s pastors don’t need a federal tax agency to police their sermons, and so we commend those in the House who supported free speech fairness language in the amended tax bill," said Alliance Defending Freedom Legal Counsel Christiana Holcomb at the time. "Churches and their pastors have a constitutionally protected freedom to decide for themselves what they want to say or not say. Recent polling demonstrates that religious leaders don’t want to be burdened by the continual threat of an IRS investigation and potential penalties based simply on what they say from the pulpit."

By contrast, the measure was condemned by the National Council of Nonprofits, which said the bill risks overly politicizing the nonprofit sector. The CEO and president Tim Delaney said that the bill indicates that Washington wants to use charities as a combination of piggybank and political pawn. 

“It’s now impossible for Congress and the White House to deny their objective: to politicize the trusted charitable nonprofit community by authorizing unlimited, unfettered, and untraceable political money to flow through the nonprofit sector to benefit partisan special interests," Delaney said. "Through their regulatory action removing the paper trail for 501(c)(4) organizations and their legislative action via a must-pass appropriations bill to weaken the longstanding Johnson Amendment and open the floodgates for getting a tax deduction for their political campaigning, they can no longer hide their agenda to impose partisan politics over public interest."

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