During his presidential campaign, President Trump promised to repeal the “Johnson Amendment” which established the absolute prohibition on political campaign activity by 501(c)(3) charitable organizations. After his inauguration, President Trump promised to “destroy” the amendment (specifically with respect to churches), and three bills have been introduced in the 115th Congress to modify the prohibition or eliminate it completely for all 501(c)(3) charitable organizations.
H.R. 781, which was introduced by Congressman Steve Scalise of Louisiana, and S. 264, which was introduced by Senator James Lankford of Oklahoma, are identical bills which do not repeal but instead modify the absolute prohibition. As we reported in October 2016, Congressman Scalise and Congressman Jody Hice previously proposed this bill, which died with the end of the 114th Congress. Under the Scalise and Lankford bills, a 501(c)(3) organization will not risk its exempt status, or be deemed to have engaged in prohibited political campaign activity solely because of a statement which (i) “is made in the ordinary course of the organization’s regular and customary activities in carrying out its exempt purpose” and (ii) “results in the organization incurring not more than de minimis incremental expenses.” It is unclear how this bill would be applied and how the Internal Revenue Service would define “ordinary course” and “de minimis incremental expenses.”
H.R. 172, which was introduced by Congressman Walter Jones of North Carolina, would completely eliminate the prohibition.
We will continue to update this space with information regarding any potential modification or repeal. Until then, of course, the absolute prohibition remains in place.
