IRS Enters into Consent Decree Limiting Application of Johnson Amendment

Note: This article is for general informational purposes only and is not legal or tax advice. Organizations should consult qualified counsel before changing political-activity policies.

Introduction: When Tax Law Walks Into the Pulpit

The phrase “IRS enters into consent decree limiting application of Johnson Amendment” sounds like something that escaped from a law-school exam and ran straight into a church bulletin. But behind the legal vocabulary is a very real debate about religion, politics, free speech, tax exemption, and the question no nonprofit wants to ask five minutes before election season: “Wait, are we allowed to say that?”

At the center of the story is the Johnson Amendment, the famousor infamous, depending on which side of the pew you sit onrule in Internal Revenue Code Section 501(c)(3). Since 1954, it has prohibited tax-exempt charitable organizations, including churches and other houses of worship, from participating in or intervening in political campaigns on behalf of, or in opposition to, candidates for public office.

In July 2025, the Internal Revenue Service and several religious plaintiffs filed a joint motion in federal court seeking approval of a consent judgment in National Religious Broadcasters v. Long. The proposed agreement stated that the Johnson Amendment, properly interpreted, would not bar a house of worship from speaking to its own congregation through customary religious channels, in connection with religious services, about electoral politics viewed through the lens of faith.

That sentence is doing a lot of work. It is not a permission slip for churches to become campaign headquarters with hymnals. It is also not a full repeal of the Johnson Amendment. Instead, it represents a narrow but highly consequential interpretation of how the IRS may apply the rule to certain internal religious communications. Later developments, including a 2026 dismissal of the case for lack of jurisdiction and Treasury’s promise of additional guidance, made the issue even more important for religious organizations, nonprofits, tax professionals, campaign attorneys, and anyone who enjoys watching constitutional law and tax law share an awkward folding chair.

What Is the Johnson Amendment?

The Johnson Amendment is shorthand for language added to Section 501(c)(3) of the Internal Revenue Code in 1954. The rule applies to charitable nonprofits, churches, educational institutions, private foundations, and other organizations that qualify for federal tax exemption under 501(c)(3).

Under the statute, a 501(c)(3) organization may not “participate in, or intervene in” any political campaign on behalf of, or in opposition to, a candidate for public office. The rule covers endorsements, opposition statements, candidate ratings that function as endorsements, campaign contributions, and other activities that cross the line from issue discussion into candidate advocacy.

Why the Rule Matters

The Johnson Amendment matters because 501(c)(3) status comes with major benefits. Organizations generally do not pay federal income tax on exempt-purpose revenue, and donors may be able to deduct contributions. In plain English: the government gives charitable organizations a valuable tax advantage, and in exchange, those organizations must stay out of partisan candidate campaigns.

For decades, nonprofit lawyers have summarized the rule like this: charitable organizations may educate voters, discuss public issues, host nonpartisan candidate forums, support or oppose legislation within lobbying limits, and encourage civic participation. What they cannot do is tell people to vote for Candidate A or against Candidate B.

The practical logic is simple. A food bank can say hunger policy matters. A church can preach about poverty, immigration, abortion, criminal justice, religious liberty, or war. A medical charity can discuss health care reform. But once an organization says, “Therefore, elect this candidate,” it is no longer simply discussing an issue; it is entering campaign territory.

The Case Behind the Consent Decree

The 2025 consent-decree controversy arose from litigation brought by National Religious Broadcasters, Intercessors for America, and two Texas churches: Sand Springs Church and First Baptist Church Waskom. The plaintiffs challenged the Johnson Amendment as applied to religious speech, arguing that it burdened free speech, free exercise of religion, due process, equal protection, and rights under the Religious Freedom Restoration Act.

The plaintiffs contended that houses of worship should not lose tax-exempt status for communicating religious views about political candidates to their own congregations during religious services. Their argument focused heavily on the idea that religious leaders often teach congregants how faith applies to every area of life, including voting decisions.

The IRS, in the proposed consent judgment, accepted a narrow interpretation: when a house of worship speaks in good faith to its congregation, through customary channels of religious communication, in connection with religious services, on matters of faith related to electoral politics, that speech does not amount to participation or intervention in a political campaign.

What the Proposed IRS Consent Decree Actually Said

The most important point is that the proposed consent decree did not say every 501(c)(3) organization may endorse candidates. It did not say churches can run campaign ads, donate to candidates, distribute partisan mailers to the public, or become religious Super PACs with better coffee.

Instead, the proposed language focused on a specific type of communication:

1. A House of Worship

The proposed interpretation applied to houses of worship, not every nonprofit. That distinction matters because a secular public charity, university, museum, or hospital could not automatically claim the same treatment.

2. Speech to Its Own Congregation

The speech had to be internal to the religious community. A sermon, congregational teaching, or message delivered to members during worship would be different from a public advertising campaign or a candidate fundraising blast.

3. Customary Channels of Communication

The communication had to occur through ordinary religious channels. Think sermons, worship services, church bulletins, or internal communications tied to religious practicenot campaign billboards, robocalls, or glossy mailers with a candidate smiling like they just discovered perfect lighting.

4. Matters of Faith

The speech had to concern electoral politics viewed through the lens of religious faith. In other words, the proposed exception was framed around religious teaching, not ordinary campaign strategy.

5. Connection With Religious Services

The context mattered. The proposed consent judgment emphasized communications made in connection with religious services, which narrowed the scope further.

Why This Was a Big Deal

The proposed IRS position was significant because, historically, the agency’s published guidance has warned all 501(c)(3) organizationsincluding churchesagainst candidate endorsements. Revenue Ruling 2007-41, for example, has long been used as a practical roadmap for distinguishing issue advocacy from prohibited political campaign intervention.

Even though IRS enforcement against churches has been relatively rare, the formal legal rule remained clear: endorsing or opposing candidates could jeopardize tax-exempt status. The 2025 filing suggested a new, narrower interpretation for certain religious communications. That is why nonprofit lawyers, campaign-finance experts, religious-liberty advocates, and church-state separation groups immediately paid attention.

For supporters, the IRS position recognized that religious leaders should not have to muzzle faith-based teaching simply because an election is approaching. For critics, the move risked creating a religious carveout that could politicize houses of worship and open new channels for tax-deductible political influence.

What Happened After the Consent-Decree Filing?

The story did not end with the July 2025 filing. In March 2026, the federal district court dismissed the case, concluding that it lacked jurisdiction under federal tax-law limitations. In practical terms, the court did not approve the proposed consent judgment as a binding final decree.

That development is crucial. The IRS position expressed in the proposed agreement was important, but the court’s dismissal meant the settlement did not become a fully approved court order resolving the Johnson Amendment question for everyone. Shortly afterward, the U.S. Treasury Department and the IRS announced plans to issue additional guidance for religious organizations, especially concerning communications made within the context of religious services.

So where does that leave everyone? In a place tax lawyers know well: somewhere between “interesting development” and “please do not wing this.”

What the IRS Position Could Mean for Churches

If future IRS guidance follows the logic of the proposed consent judgment, houses of worship may have more room to discuss candidates in internal religious contexts than many compliance advisers previously assumed. But that does not mean risk disappears.

A cautious church board should ask several questions before changing any policy:

Is the Communication Truly Religious?

A sermon connecting moral beliefs to public leadership may be treated differently from a campaign speech copied from a candidate’s website. The closer the message is to spiritual teaching, the stronger the argument that it falls within the proposed interpretation.

Is the Audience the Congregation?

Internal communication is central to the proposed framework. A message delivered during worship to members is different from paid media targeting voters across a congressional district.

Is the Organization Coordinating With a Campaign?

Coordination with candidates or political committees creates serious risk. Even under a narrow religious-speech interpretation, a church should not operate as an arm of a campaign.

Are Resources Being Used for Campaign Activity?

Staff time, facilities, mailing lists, websites, and donor funds all matter. The more a house of worship uses institutional resources to promote or oppose a candidate, the more likely it is to attract scrutiny.

What This Means for Secular 501(c)(3) Nonprofits

For secular nonprofits, the message is much simpler: the Johnson Amendment still applies. A food pantry, university, health charity, arts organization, or educational foundation should not read the proposed religious-organization consent judgment as a green light to endorse candidates.

Secular 501(c)(3) organizations may still engage in nonpartisan civic activity. They can publish voter guides if carefully structured, host candidate forums if all candidates are treated fairly, conduct issue education, register voters in a nonpartisan way, and advocate on public policy within applicable lobbying rules. But candidate endorsements remain a high-risk zone.

That distinction may become one of the most controversial aspects of future guidance. If houses of worship receive more flexibility than secular charities, critics may argue that the government is favoring religious organizations. Supporters may respond that religious services are uniquely protected contexts for faith-based teaching. Either way, expect lawyers to keep their coffee cups full.

Supporters’ View: A Win for Religious Liberty

Supporters of the IRS position argue that the Johnson Amendment has chilled religious speech for decades. They believe pastors, rabbis, imams, priests, and other faith leaders should be free to speak candidly about how religious principles apply to candidates and elections.

From this perspective, a sermon about voting is not the same as a campaign rally. A congregation is not the general electorate. A faith leader applying doctrine to civic choices is not necessarily operating a political action committee. Supporters also point out that religious communities have played major roles in American public life, from abolition to civil rights to debates over poverty, war, and human dignity.

In their view, the IRS’s proposed interpretation simply recognizes that religious speech does not stop being religious because it touches politics. After all, many moral questions have political consequences. If faith leaders can speak about justice, family, life, liberty, and stewardship, supporters ask, why must they suddenly speak in code when a candidate’s name enters the room?

Critics’ View: A Threat to Nonprofit Nonpartisanship

Critics see the issue very differently. They argue that the Johnson Amendment protects houses of worship and charities from partisan pressure. Without it, candidates and donors may push religious leaders to endorse campaigns, turning sacred spaces into political platforms.

Nonprofit advocates also worry about money. Because donations to 501(c)(3) organizations may be tax deductible and donor disclosure rules differ from campaign-finance rules, loosening the Johnson Amendment could create incentives for political money to flow through tax-exempt religious entities. Critics fear this could blur the line between charity and campaign finance.

There is also a community concern. Many congregations include people with different political beliefs. A formal endorsement from the pulpit could divide members, alienate donors, and shift attention away from worship, service, and mission. In other words, politics may enter the sanctuary wearing a nice suit, but it rarely leaves without moving the furniture.

Practical Compliance Lessons for Religious Organizations

Until Treasury and the IRS issue clear guidance, religious organizations should proceed carefully. The safest approach is not panic or overconfidence, but documentation, policy, and legal review.

Create a Written Political-Activity Policy

A house of worship should have a clear policy explaining who may speak for the organization, how election-related messages are reviewed, and what activities remain prohibited. The policy should distinguish personal speech by religious leaders from official organizational speech.

Separate Personal Endorsements From Institutional Endorsements

A pastor or faith leader may have personal political views. The compliance issue is whether those views are presented as the official position of the tax-exempt organization and whether organizational resources are used.

Avoid Campaign Coordination

Inviting a candidate to speak, distributing campaign literature, sharing donor lists, or coordinating messaging with a campaign can create significant risk. Even if internal religious speech receives more protection, campaign coordination is a different animaland not the cute kind in the church Christmas pageant.

Document the Religious Context

If a message discusses elections through a religious lens, organizations should preserve context. Sermon notes, service programs, board minutes, and policy memos can help demonstrate that the communication was part of religious teaching rather than campaign intervention.

Specific Examples: Safer vs. Riskier Conduct

Example 1: Issue-Based Sermon

A church leader gives a sermon about poverty, immigration, religious liberty, or abortion and encourages congregants to vote according to conscience. This has generally been safer because it discusses issues without endorsing a candidate.

Example 2: Internal Faith-Based Candidate Discussion

A religious leader speaks during a worship service to the congregation about candidates in relation to the faith community’s teachings. Under the proposed IRS interpretation, this is the kind of communication that may receive more protection if done in good faith through customary religious channels.

Example 3: Public Campaign Advertisement

A church buys online ads saying “Vote for Candidate Smith” and targets voters statewide. This is far riskier because it looks like public campaign intervention, not internal religious communication.

Example 4: Candidate Fundraising

A 501(c)(3) organization hosts a fundraiser for a candidate and asks donors to contribute. That remains dangerous territory. Tax-exempt charitable resources should not be used to raise money for political campaigns.

Why Businesses, Donors, and Tax Advisers Should Care

This issue is not only for clergy and nonprofit boards. Donors may care because political activity can affect deductibility, reputational risk, and confidence in an organization. Accountants and tax advisers may need to update compliance checklists. Political consultants may be tempted to test boundaries, which is exactly why organizations need guardrails.

Businesses that sponsor nonprofit or faith-based events should also pay attention. A corporate sponsor may not want its brand unexpectedly attached to a candidate endorsement. Likewise, grantmakers may require grantees to certify that funds will not support partisan campaign activity.

Experience-Based Insights: What Organizations Can Learn From This Moment

In real-world nonprofit compliance, the hardest problems rarely arrive wearing a name tag that says “LEGAL ISSUE.” They show up as ordinary questions from good people. A board member asks whether the pastor can mention a candidate. A donor wants the organization to “take a stronger stand.” A communications volunteer posts something spicy on the official Facebook page. Suddenly, everyone is staring at the executive director like the tax code is hidden under their chair.

The first lesson from the IRS consent-decree debate is that mission clarity matters. Organizations that know their mission can make better decisions under pressure. If a house of worship believes faith teaching naturally includes moral evaluation of public leadership, it should still define how that teaching happens, who delivers it, and what boundaries protect the institution. If a charity exists to feed families, educate children, or provide medical support, it should ask whether candidate politics helps that mission or hijacks it.

The second lesson is that tone matters almost as much as content. A thoughtful religious teaching that discusses civic responsibility is different from a campaign-style attack speech. The former may deepen moral reflection; the latter may make half the room wonder whether they accidentally walked into a rally with stained glass. Leaders should consider whether their communication invites conscience or pressures conformity.

The third lesson is that documentation is not bureaucracy for its own sake. Good records are the seat belts of nonprofit governance: slightly annoying until the moment they are very useful. Board minutes, written policies, speaker guidelines, and communication-review procedures can help show that an organization acted carefully and consistently.

The fourth lesson is that social media creates risk at lightning speed. A sermon delivered to a congregation may later appear as a viral clip viewed by millions. A message originally intended as internal religious teaching can become public political content once posted online. Organizations should decide in advance how sermons, livestreams, newsletters, and clips are handled. “We did not think about that” is not a strategy; it is a prequel.

The fifth lesson is that leaders should not confuse rare enforcement with no enforcement. The IRS has historically brought relatively few Johnson Amendment cases involving churches, but low enforcement does not erase the law. Organizations should avoid making aggressive assumptions simply because another group took a risk and survived. In tax compliance, “they got away with it” is not a legal doctrine, although it is a surprisingly popular hobby.

The sixth lesson is that donors and members deserve transparency. If a house of worship or nonprofit is considering a new approach to election-related communication, leaders should explain why, how, and within what limits. Sudden political messaging can damage trust, especially in communities built around shared service rather than shared party identity.

The final lesson is simple: get advice before acting. The Johnson Amendment sits at the intersection of tax exemption, constitutional law, religious liberty, campaign finance, and nonprofit governance. That is not a do-it-yourself weekend project. Nobody should treat a proposed consent decree, a news headline, or a social media summary as a substitute for legal counsel.

Conclusion: A Narrow Shift With Broad Consequences

The IRS’s proposed consent decree limiting application of the Johnson Amendment marked a major moment in the long-running debate over churches, politics, and tax exemption. It suggested that certain good-faith communications by houses of worship to their own congregations, through customary religious channels and in connection with religious services, may fall outside the ordinary meaning of political campaign intervention.

But the bigger picture remains unsettled. The court did not ultimately approve the proposed consent judgment, and Treasury and the IRS have indicated that additional guidance is needed. Until that guidance arrives, religious organizations should move carefully, secular nonprofits should continue following traditional 501(c)(3) rules, and advisers should help clients distinguish protected mission-based speech from prohibited campaign activity.

The Johnson Amendment may be only a few lines of tax law, but it carries enormous weight. It protects nonprofit nonpartisanship, raises serious religious-liberty questions, and shapes how charitable organizations participate in public life. In other words, it is small enough to quote and big enough to start an argument at Thanksgiving.