A federal judge recently rejected a proposed legal settlement that could have significantly weakened long-standing restrictions on political campaign activity by churches and other 501(c)(3) public charities.
The case centered on the Johnson Amendment, a provision of federal tax law that prohibits tax-exempt charitable organizations from endorsing or opposing political candidates. While enforcement of the rule against churches has historically been rare, nonprofit and church-state separation advocates warned that the proposed settlement could have created a special carveout allowing houses of worship to engage in political endorsements while retaining tax-exempt status.
According to The Texas Tribune, U.S. District Judge J. Campbell Barker dismissed the lawsuit in March 2026, ruling that he did not have the authority to approve the agreement negotiated between the IRS and a group of Texas churches and religious organizations.
The Johnson Amendment, enacted in 1954, prohibits 501(c)(3) organizations, including charities, churches, and private foundations, from participating or intervening in political campaigns on behalf of, or in opposition to, candidates for public office.
Organizations that violate the rule risk penalties and potentially the loss of tax-exempt status.
The controversy arose after the IRS entered into a proposed settlement in 2025 with plaintiffs challenging the Johnson Amendment’s application to churches.
As described by The Texas Tribune, the IRS suggested that political statements made by pastors to congregations during worship services could be treated similarly to private discussions among family members rather than prohibited campaign intervention.
Critics argued that the proposed interpretation would effectively exempt churches from restrictions that continue to apply to secular nonprofits and charities.
Nonprofit groups expressed concern that such a carveout could undermine public trust in the charitable sector and blur the distinction between tax-exempt charitable activity and partisan political advocacy.
In recent years, public debate surrounding the Johnson Amendment has often focused heavily on political activity within Christian churches, which can sometimes lead people to misunderstand the broader scope of the rule and how it is actually applied across the nonprofit sector.
The Johnson Amendment does not apply only to Christian churches or Christian religious organizations. Rather, it applies broadly to all 501(c)(3) tax-exempt organizations, including religious ones, regardless of faith tradition, including mosques, synagogues, temples, churches, and other houses of worship representing Islam, Judaism, Hinduism, Buddhism, Sikhism, and many other religions.
The restriction is tied not to theology, but to tax-exempt status under federal law. In exchange for receiving the benefits associated with charitable tax exemption, including tax-deductible donations, organizations are generally expected to refrain from partisan political campaign activity. Understanding the rule in this broader context is important because public debate surrounding the Johnson Amendment is often framed narrowly as a dispute involving Christianity, when in reality the law applies across the religious spectrum as part of a wider framework governing charitable and tax-exempt organizations.
Judge Barker ultimately rejected the proposed settlement and dismissed the case, concluding that the federal court lacked authority to approve the agreement. As a result, the Johnson Amendment remains legally in effect.
However, the case highlighted continuing political and legal pressure to weaken or narrow the restriction, particularly as enforcement against churches has historically been infrequent.
According to the Wall Street Journal the lead plaintiff plans to appeal, meaning further litigation remains possible.
The Johnson Amendment reflects a longstanding principle underlying charitable tax exemption: organizations receiving favorable tax treatment in exchange for serving charitable, religious, educational, or public purposes are generally expected to remain nonpartisan.
Supporters of the restriction argue that allowing charities and churches to openly endorse political candidates could:
Critics of the rule argue that it can chill free speech by religious leaders and other nonprofit organizations.
Regardless of where one stands on the policy debate, the recent case demonstrates that the legal boundaries governing political activity by charities remain an active area of litigation and public controversy.
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