By Benjamin Leff
Trump issued an Executive Order (EO) today, the text of which was a complete shock (at least to naive little me). I had written a thousand-word blog post based on reporting before the release of the EO that Trump would direct the Internal Revenue Service to “exercise maximum enforcement discretion to alleviate the burden of the Johnson amendment which prohibits religious leaders from speaking about politics and candidate from the pulpit[.]” Then I watched the whole signing ceremony and Trump confirmed that he was planning to clearly open the door for religious leaders to communicate their views on candidates from the pulpits of their houses of worship.
The pre-prepared post argued that the IRS should issue some guidance explaining how it would enforce the Johnson Amendment in light of the EO, especially (1) whether it would create a “safe harbor” only for the speech of the organization, or also for the organization’s money and (2) whether it would extend the “safe harbor” to all 501(c)(3) organizations, or just houses of worship. The general consensus among advocates of changing the Johnson Amendment is that any liberalization of the rule should apply equally to all 501(c)(3) organizations and that it should permit speech but not spending.
Then, after a couple of hours, the White House released the actual text of the Executive Order. Unless I’m blind, what it says is literally nothing like what the Trump Administration said it would say, and even less like what Trump said it said when he signed it in the Rose Garden ceremony just a few hours ago. Here’s the relevant language:
“In particular, the Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury.” (emphasis and double emphasis added).
That seems to say that the IRS shouldn’t discriminate against religious organizations that engage in campaign-intervention speech. The EO directs the IRS to refrain from taking adverse action “where speech of a similar character has … not ordinarily been treated as” speech prohibited to a 501(c)(3) organization. In other words, if the IRS has previously treated a certain “character” of speech as permitted, it shouldn’t treat it as prohibited when religious organizations engage in it. I’m right that’s what it says, right? The EO does nothing to prevent the IRS from continuing to interpret the law as it always has, as long as that interpretation is not discriminatory against religious organizations.
The leading IRS interpretation of the Johnson Amendment is (unglamorously) called Rev. Rul. 2007-41. The portion that is relevant to pastors endorsing candidates from the pulpit is the section on “Individual Activity by Organizational Leaders.” The Ruling states clearly,
“The political campaign intervention prohibition is not intended to restrict free expression on political matters by leaders of organizations speaking for themselves, as individuals. …. However, for their organizations to remain tax exempt under section 501(c)(3), leaders cannot make partisan comments in official organization publications or at official functions of the organization.” (emphasis added).
In Situation 5, the Ruling discusses a minister of a church who endorses a candidate at the candidate’s campaign headquarters. The minister is identified in the press as the minister of the church and says nothing to make clear that he is speaking as an individual rather than on behalf of the church. The Ruling concludes that the minister’s speech is totally permissible, “Because [the minister] did not make the endorsement at an official church function, in an official church publication or otherwise use the church’s assets, and did not state that he was speaking as a representative of [the church.]” By negative inference, then, if the minister had endorsed the candidate from the pulpit of his church (at an official church function) rather than from the candidate’s campaign headquarters, it would be impermissible campaign intervention speech. That’s the IRS’s current interpretation of the Johnson Amendment that President Trump has been boasting he’s going to “totally destroy.”
But (again unless I’m crazy), because the IRS rule prohibiting organizational leaders from endorsing candidates “in official organization publications or at official functions of the organization” applies equally to religious and non-religious organizations, the EO does not direct the IRS to stop enforcing it. Speech of this “character” (campaign intervention speech by an organizational leader at an official function of the organization) has “ordinarily been treated as” prohibited speech. The EO only directs the IRS to permit the speech if it has not ordinarily been treated as prohibited speech. What is more ordinary than the IRS’s official interpretation of the law, as described in Revenue Ruling 2007-41? When the IRS has investigated organizations in the past, it has used that standard, whether those organizations were religious or not. So, I guess, the EO says the IRS should continue to use that standard. The plain meaning of the EO appears to be that the IRS should continue to enforce the Johnson Amendment against religious organizations when their pastors endorse candidates from the pulpit, for example.
I suspect, given what the president has said about political speech by religious organizations (including in the Rose Garden while he was signing this apparently meaningless Executive Order), that 501(c)(3) organizations, including churches, may be emboldened to engage in more campaign-related political activities than they had previously. Unfortunately, the Executive Order gives them no guidance if they choose to expand their activities beyond what they felt comfortable doing prior to the Executive Order. Therefore, I can still say what I wanted to say before I saw the text of the Executive Order: the IRS should issue guidance explaining its intended use of its enforcement discretion. If the IRS wants to create a safe-harbor for 501(c)(3) leaders speaking at official functions of their organizations in the ordinary course of pursuing their tax-exempt purpose, it should issue guidance that does so.