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.
12 thoughts on “Trump’s Johnson Amendment Executive Order Does Not Say What He Said it Said”
Exactly right, Benjamin:
Thank you for the good coverage. I was frustrated by the media confusing statute, regulation, policy, and practice. This helps. It seems there is no regulation prohibiting endorsements from the pulpit, and even this revenue ruling is not exactly on point. So statute and regulation don’t prevent endorsements. I don’t know about practice. But it seems that there is no legal requirement for Trump to strip tax exemption from churches that endorse candidates, and if he allows them to by new regulation there will Chevron deference and any church will be able to object in court and win. An interesting side-point is that probably nonreligious nonprofits coudl endorse candidates internally too. Am I right on that?
A separate question is whether the statute prohibits nonprofits from buying TV ads for candidates. It seems to me that is what the statute is really about, and Trump could not chnage by order or regulation even if he wished.
In order to understand the difference between what Trump says he does and what he actually does do, you need to read Art of The Deal in which he explains the concept of “truthful hyperbole”. https://www.forbes.com/sites/peterjreilly/2017/05/04/presidents-religious-liberty-order-might-not-change-irs-at-all/#5a6b85a841f2
I agree with the analysis as far as it goes. But how does the Service’s apparent total lack of enforcement against intentionally conspicuous violations by Pulpit Freedom Sunday participants over many years figure in? Arguably, that pattern of non-enforcement combined with the EO effectively moves the line.
I agree that the IRS’s non-enforcement arguably moves the line; and I agree that the communications from the Trump administration (prior to the release of the EO) and from Trump himself (as he signed the EO) seem to confirm that the administration believes that the pattern of non-enforcement should continue. But in my view, the text of the EO either doesn’t add anything, or actually detracts from this interpretation, by insisting that the IRS should only refrain from taking adverse action “where speech of similar character has … not ordinarily been treated as [improper campaign-related speech.] I guess if very recent practice defines what is “ordinary” then maybe nothing is prohibited, but that seems like a forced interpretation. It wasn’t that long ago that the IRS was conducting a “political activity compliance initiative” in which they made clear that certain behaviors were improper (even if they only slapped organizations on the wrist for noncompliance).
But, Rosemary, I trust your judgment on this way better than I trust my own. Do you think organizations could reasonably engage in more campaign activities because of the EO? Would it be ethical for an attorney advising an organization to tell them that because of the EO they should go ahead and endorse a candidate?
Attorneys are notoriously too cautious.
In this case, the statute itself does not prohibit endorsements, there are no regulations on point, the IRS has apparently not even issuing warnings to churches (much less penalties), and the President says it is executive policy that endorsements are OK. The only adverse evidence would be from old IRS policy statements that have no force of law, right? So why wouldn’t it be unethical for a lawyer to tell his client *the opposite*–that the client faces a significant probability of losing its tax-deduction status if it endorses a candidate?
The Pulpit Freedom Sunday effort is 8 or 9 years old now, so the absence of enforcement is not all that recent. The law has been far too murky for far too long; the Executive Order didn’t change that. I would advise a 501(c)(3) client that the law prohibits it from endorsing candidates. And that I can only advise clients based on the law, and not on the likelihood of enforcement, which is what the EO addresses.
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But that’s the question: what does “the law” say? As a formalist, I say the statute allows endorsements. As a Holmesian bad man, I say the IRS allows endorsements. Either way, endorsements are okay.
A separate thought. This post was good in explaining what happened in the issuance of the order. The White House statements implied a big deviation from past policy but the Order itself didn’t change much. Is Trump being snookered by the executive agencies? That is, did they tell him “We drafted the Order you wanted” and he said, “Great, let’s issue it!” without his own people reading it carefully? I can easily see the pendulum swinging too far after the hasty first immigration executive order. And I can easily see Trump telling staff, “Don’t bother me with the details” and getting fooled constantly. He treats words very loosely himself, and I bet his ability to parse a legal document (or any document) is slight.