Church Political Speech Leeway Shifts to IRS After Court Ruling

A push by the Trump administration for a court’s blessing to allow political endorsements by churches now falls directly into the hands of the IRS after a federal court dismissed an agreement allowing more politics in the pulpit.

A Texas judge on March 31 rejected a proposed pact between the IRS and National Religious Broadcasters to allow religious leaders to endorse candidates, saying the court lacked the authority. The July 2025 consent decree sought to allow two churches to engage freely in political discussion without losing their tax-exempt status—sending a strong message encouraging other religious institutions to do the same and aligning with the IRS’s loose enforcement posture.

In 1954, Congress passed the Johnson Amendment, which prohibits nonprofits from opposing or endorsing political candidates, and can be used to strip an organization of its tax-exempt 501(c)(3) status. While the rejected pact said political speech doesn’t run afoul of the amendment, the court’s dismissal only heightens churches’ desire for permanent IRS guidance.

The US District Court for the Eastern District of Texas dismissed the consent agreement because the organizations’ challenge case lacked the requisite IRS consequence to challenge—like a 501(c)(3) status being revoked or application denial.

“That probably won’t happen here if the point of this whole exercise was to send the message that ‘we’re not going to enforce against you,’” Brian Galle, a law professor at UC Berkeley and former prosecutor at the US Department of Justice’s Tax Division, said.

Going forward, finding a new group that has had its nonprofit status revoked and willing to take on the legal fees and challenge the agency is unlikely. “It’s kind of a mixed message if the IRS takes an enforcement action in order to generate a lawsuit that they can then settle,” Galle said.

It’s a politically gray area of tax law for churches as they weigh how much to say in service, who can speak on the pulpit, and what to brace for with IRS enforcement, tax experts said. For the IRS, though, issuing rules could be controversial.

Regulations lifting the ban for churches would be a “cleaner path” instead of the one-off approach in litigation, said Phil Hackney, a University of Pittsburgh law professor and former IRS lawyer. It’s questionable, though, whether any regulations would be legitimate as they could violate the Constitution, he said.

While a legislative fix to repeal the Johnson Amendment would make things easier for the IRS, it’s unlikely and multiple attempts have failed.

The administration added guidance addressing the Johnson Amendment to the IRS’s priority guidance plan for 2025-2026. It’s unclear when the guidance will be released, and projects on the 2025 tax-and-spending law are taking precedence.

Future IRS Enforcement

Lloyd Mayer, a professor at the University of Notre Dame Law School, said the settlement may spur the IRS to continue making exceptions for churches to support or oppose candidates from the lectern. The recent ruling should sustain the Johnson Amendment’s “chilling effect” on pastors, even though IRS enforcement has been rare under the Trump, Biden, and Obama administrations.

Pastors are “clearly aware of the Johnson Amendment” and most modify their political speech to avoid direct endorsements, while still expressing support, Mayer said. But that reticence will be enhanced following the ruling because the underlying law hasn’t changed, with no legal protections for political speech.

“They could be much more blatant in their support or opposition of candidates and not be looking over their shoulder at the unlikely but possible chance that the IRS would show up,” he said.

The Trump administration’s approach to enforcing tax law has been selective. Had the district court approved the settlement, it would’ve been harder for the IRS to enforce actions against liberal groups that it deemed were engaging in political activity, Galle said.

“This administration, the way that it’s enforced tax law has been kind of to out beat its enemies while giving a free pass to its political friends,” Galle said. “That’s still on the table now because the district court didn’t act.”

The intention of the lawsuit was to provide even more confidence to nonprofits who might be hesitant to rely on the word of this administration and lock-in a policy safe from future IRS leadership, but that effort ultimately failed, he said.

The IRS’ three-year statute of limitations to analyze, and resolve tax-related issues could act as an additional reason for caution.

Violations in 2026 will be subject to IRS review after a new administration is elected in 2028. Thus, churches that engage in political activity now would still be within the three-year window for potential enforcement by a future administration with different enforcement priorities.

“It probably is an additional source of caution for general counsels or outside counsel who are giving advice to charitable organizations,” Galle said. “Because the district court refused to get involved, the current administration could flip as soon as January 20, 2029, and we’re less than three years out from that, which means you’ve got a lot of risk if you’re going to engage in political activity.”