IRS Opens Path for Churches to Test Political Speech Limits

The IRS’s green light for churches to speak about political campaigns and candidates without losing their tax-exempt status opens the door to new legal tests of two of the strongest Constitutional protections: Free speech and religious liberty.

Churches that want to push the bounds of political speech now have more assurance that they won’t lose their tax-exempt status, which allows them to largely avoid taxes and for donors to receive tax deductions. They also may test how far they can endorse a politician without attracting IRS enforcement.

“It will be interesting to see who starts pushing the limits and how,” said Raul Gastesi, partner at Gastesi Lopez Mestre & Cobiella. “And it will get tricky when you talk about religious freedom, those are highly protected rights.”

The IRS and religious groups said in a proposed consent decree July 7 that the agency is reinterpreting a 1954 provision to now allow churches to speak on political views with their congregation. The so-called Johnson Amendment has long prohibited churches and other 501c(3) nonprofits from engaging in political activities if they want to keep their tax-exempt status.

The joint filing in the US District Court for the Eastern District of Texas—which needs a judge’s approval—stops the courts from ruling on the constitutional challenge to the Johnson Amendment, leaving the law unchanged. In the short-term, the filing is a win for evangelical churches and grants more leeway to places of worship that want to increase their political speech, though the IRS could renege on the decision since it isn’t formal guidance.

Pushing Boundaries

The filing spurred criticism from the nonprofit community, with some groups seeing it as an opening for political candidates to skirt campaign finance laws. Americans United for Separation of Church and State, a nonprofit, on Thursday filed a motion to intervene in the litigation, saying the government took the “consequential step of abandoning the defense of a federal law that has safeguarded our democracy for decades.”

Religious groups may sponsor fundraising activities for a candidate or host events for a preferred candidate that excludes others, which would likely prompt litigation, said Jeff Lewis, a Constitutional lawyer and founder of Rolling Hills Estates, Calif.-based Jeff Lewis Law APC.

Gastesi said he expects some “quasi-affiliated political organizations” to increase their political activities, which could be used to give tax benefits typically reserved for charitable giving to political donors. Other organizations may form as a channel for political donations through tax-exempt religious groups.

Diane Yetel, CEO of the National Council of Nonprofits, criticized weakening the Johnson Amendment, pointing to possible tax breaks for political contributions and saying allowing political advocacy could take away from churches’ missions.

Most churches will likely remain out of politics, said Raymond Brescia, associate dean at Albany Law School. The filing seems to only allow for political discussions from the pulpit, not a widespread campaigning. And the IRS in the past few decades has steered away from enforcing the Johnson Amendment restrictions on religious groups. But changes may be coming, he said.

“This stinks to high heavens,” said Brescia, who teaches nonprofit law. “It’s an opportunity for wealthy donors to funnel political donations in a tax-exempt way through a religious entity that will advance their political agenda.”

Political Considerations

The IRS statement is only binding for the plaintiffs of this case, said Brian Galle, a tax-exempt professor at University of California, Berkeley School of Law. Churches and other charities may continue to follow the Johnson Amendment if they’re particularly risk-averse, especially if their political speech goes against the current administration.

“Just by filing the letter, they’re rewarding the conservative religious organizations in this lawsuit, and without taking any regulatory action they’re leaving the prohibition formally in place for everybody else,” Galle said.

The Trump administration has signaled it wants to use the IRS to punish tax-exempt organizations that it views as having a liberal bias, shown through the president’s threats to Harvard University’s tax-exempt status and executive orders going after “illegal” diversity, equity, and inclusion initiatives and environmental groups.

“If churches on both the left and the right decided to go to the max in terms of endorsing candidates, I’m not sure there’s anything that would prevent the administration from selectively going after churches that favor one political party over another,” said Roger Colinvaux, a Catholic University of America tax-exempt law professor.

The consent decree also hedges on what type of political speech is allowed, Colinvaux said, not explaining nuances such as if explicitly endorsing candidates or advertising preferred candidates online is allowed.

The IRS would need to release guidance to make the joint filing more permanent and create widespread effects across the nonprofit sector, Galle said.

“If you’re a cautious church or lawyer for a church, you have to wonder how long this promise not to enforce this against us is good for,” Galle said.

The case is Nat’l Religious Broadcasters v. Long, E.D. Tex., No. 6:24-cv-00311, joint motion filed 7/7/25.