The proposed GOP tax bill repeals the so-called “Johnson Amendment” to IRC 501(c)(3) which allows tax exempt status only to an organization “which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
Under the proposed bill, Section 501(c)(3) would be modified to allow “campaign activity by churches, their integrated auxiliaries, and conventions or associations of churches.” As set forth in the explanation of the bill (text pages 297-297, pdf pages 304-304):
[A] church, an integrated auxiliary of a church, or a convention or association of churches shall not fail to be treated as organized and operated exclusively for a religious purpose, nor shall it be deemed to have participated in, or intervened in any political campaign on behalf of (or in opposition to) any candidate for public office, solely because of the content of any homily, sermon, teaching, dialectic, or other presentation made during religious services or gatherings, but only if the preparation and presentation of such content: (A) is in the ordinary course of the organization’s regular and customary activities in carrying out its exempt purpose; and (B) results in the organization incurring not more than de minimis incremental expenses.
Oddly, the bill is essentially effective immediately upon enactment, since it is effective for all years ending after the date of enactment. Because the taxable year for most churches ends on December 31, if the bill is passed in December, political activities in 2017, even if they took place before the date of enactment, will not result in disqualification of the church’s tax exempt status.
According to the majority GOP estimate (text page 76, pdf page 82) (which manages to misspell “de minimis”), this provision will cost the Treasury $2.1 Billion over 10 years.
One can see from the explanation one of the most significant problems with this provision that, in order to determine if any church is or is not violating the provision, there will have to be direct government entanglement with religion. This poses a direct threat to the Establishment Clause of the First Amendment. Walz v. Tax Commission, 397 U.S. 664, 674 (1970).
Today, Paul Ryan tweeted: “Reports out of Texas are devastating. The people of Sutherland Springs need our prayers right now.” Of course, my prayer is that Paul Ryan vacate his position as Speaker of the House as soon as possible. Judging by the tweets in response to Ryan’s tweet, this country is about to undergo a religious revival and answer my prayers. And, if the churches chime in, the revival will be tax exempt.