Balanced, Common Sense IRS Approach to Churches’ Political Involvement

On July 8, 2025, the Internal Revenue Service (IRS) announced a significant shift in its interpretation of the Johnson Amendment, a 1954 tax code provision that barred churches and other 501(c)(3) organizations from endorsing political candidates. This change, part of a proposed settlement in a lawsuit filed by the National Religious Broadcasters and two Texas churches, allows houses of worship to engage in political discussions, including candidate endorsements, without risking their tax-exempt status, provided the speech occurs within their congregations. This development, reported by Church Law & Tax, offers new opportunities for religious ministries but also introduces uncertainties that require careful navigation. For religious leaders and faith-based organizations, understanding these changes is crucial to leveraging newfound freedoms while maintaining compliance. This post analyzes the IRS’s updated stance, highlights its positive implications, and provides actionable guidance for ministries.

Background: The Johnson Amendment and Its Evolution

The Johnson Amendment, enacted in 1954, prohibited 501(c)(3) organizations, including churches, from directly supporting or opposing political candidates to maintain their tax-exempt status. Enforcement was inconsistent, with only one documented case of a church losing its exemption—in 1992, when a New York church ran ads against Bill Clinton. Despite this, the law created a chilling effect, leading many pastors to avoid political speech due to fear of IRS penalties. Surveys, like a 2019 Pew Research study, show 76% of Americans, including 70% of Christians, prefer clergy to avoid candidate endorsements, reflecting public tension over church involvement in politics.

The 2025 IRS settlement, prompted by a lawsuit arguing First Amendment violations, clarifies that internal church discussions about electoral politics do not violate the Johnson Amendment when properly interpreted. This aligns with constitutional protections for free speech and religious exercise, offering churches more leeway to address political issues and candidates within their congregations. However, uncertainties remain, as the IRS has not fully clarified the boundaries of permissible speech, and lobbying restrictions under the tax code still apply.

According to the IRS statement to the court:

When a house of worship in good faith speaks to its congregation, through its customary channels of communication on matters of faith in connection with religious services, concerning electoral politics viewed through the lens of religious faith, it neither “participate[s]” nor “intervene[s]” in a “political campaign,” within the ordinary meaning of those words. 

To “participate” in a political campaign is “to take part” in the political campaign, and to “intervene” in a political campaign is “to interfere with the outcome or course” of the political campaign. . . . 

Bona fide communications internal to a house of worship, between the house of worship and its congregation, in connection with religious services, do neither of those things, any more than does a family discussion concerning candidates. Thus, communications from a house of worship to its congregation in connection with religious services through its usual channels of communication on matters of faith do not run afoul of the Johnson Amendment as properly interpreted.

Analysis: A Win for Religious Liberty with Caveats

The IRS’s new stance is a significant victory for religious liberty, particularly for churches seeking to engage in political discourse without fear of losing tax-exempt status. The settlement, reported by NPR and The New York Times, stems from a federal court filing that recognizes churches’ First Amendment rights to discuss moral and political issues from a religious perspective. This builds on prior legal developments, such as President Trump’s 2017 executive order, which directed the IRS to avoid penalizing religious speech unless it mirrored secular partisan activity.

Positive Implications

• Expanded Free Speech: Churches can now endorse candidates or discuss elections within their congregations, empowering pastors to address issues like religious freedom or family values without IRS scrutiny.
• Constitutional Protections Upheld: The settlement reinforces First Amendment safeguards, ensuring churches are treated equally to secular nonprofits, which often endorse candidates without penalty.
• Empowering Ministry Leaders: Pastors can speak boldly on issues tied to their faith, fostering community engagement and aligning sermons with congregational values.
• Minimal Enforcement Risk: With only one church losing its exemption in nearly 70 years, the IRS’s historically lax enforcement suggests low practical risk for compliant churches.

Remaining Uncertainties

• Vague Boundaries: The IRS has not defined what constitutes “internal” church discussions, leaving ambiguity about public statements or social media posts.
• Lobbying Restrictions: The settlement does not address limits on lobbying for legislation, which remains restricted (but not absolutely prohibited) under 501(c)(3) rules.
• Public Perception: Surveys indicate many Americans, including 62% of evangelicals, disapprove of pulpit endorsements, which could affect congregational support or public outreach.
• Future Legal Challenges: Until Congress repeals the Johnson Amendment or a court declares it unconstitutional, its partial enforcement could lead to inconsistent IRS actions.

Relevance to Religious Ministries

For religious leaders, this shift offers a chance to engage more freely in civic discourse. However, ministries must continue to balance free speech with compliance to avoid potential IRS scrutiny or public backlash.

Proactive Steps for Religious Leaders

To navigate this new landscape, religious organizations can take the following steps:

• Consult Legal Counsel: Work with attorneys to ensure political speech aligns with IRS guidelines, particularly distinguishing between internal discussions and public endorsements.
• Train Leadership: Educate pastors and staff on permissible activities, using resources like Church Law & Tax’s downloadable checklist to clarify what affects tax-exempt status.
• Engage Thoughtfully: Focus political discussions on issues tied to your mission, such as religious liberty or community welfare, to maintain congregational support.
• Keep Ministry in Focus: Churches are called to be salt and light in their communities. If the focus shifts to politics, it can endanger the central Gospel message and alienate those we seek to win.

Conclusion: Seizing Opportunity with Caution

The IRS’s July 2025 settlement marks a pivotal moment for religious liberty, granting churches unprecedented leeway to engage in political speech within their congregations. This aligns with constitutional protections and empowers ministries to address issues central to their faith. However, uncertainties around enforcement and lobbying limits require careful navigation. By consulting legal experts, training leaders, and engaging thoughtfully, religious organizations can leverage this freedom while maintaining compliance and public trust.