Last week, a video surfaced of Gov. Matt Bevin telling a crowd of pastors to ignore the Johnson Amendment, a long-standing law that forbids churches from engaging in political activity lest they lose their tax-exempt status.
Bevin called the law a “paper tiger,” saying that “zero” churches had lost their lost their tax-exempt status for violating the policy.
Though it’s factually incorrect to say that no churches have lost their tax-exempt status, it is true that it's harder to do so in recent years because of a wrinkle in federal tax law created almost two decades ago.
“It is correct that it’s probably pretty hard for the IRS to do that,” said Marcus Owens, former director of the IRS Exempt Organizations Division, now a partner with Washington law firm Loeb & Loeb.
(The Internal Revenue Service is in charge of enforcing the policy, which forbids 501 (c)(3) non-profits from engaging in political activity or endorsing political candidates.)
The Johnson Amendment
The Johnson Amendment has long been the target of religious conservatives and this year Republican presidential nominee Donald Trump has called for the policy to be repealed.
But regulating the provision is already difficult after a 2009 court ruling showed that the IRS’ primary way of enforcing it had crumbled during a reorganization of the agency 10 years before.
In order for the IRS to launch an examination into a church suspected of politicking, statute requires an IRS “regional commissioner” or high-level treasury department official to sign off on the investigation.
However, Congress eliminated the regional commissioner positions during a reorganization of the IRS between 1998 and 2000 and neglected to create a new avenue for enforcement.
“There are no such people anymore,” Owens said. “The IRS is unable to enforce the tax law because of the fact that Congress failed to cross its t’s and dot its i’s when it did the reorganization.”
IRS officials wouldn’t comment on this story, but Owens said traditionally, top-level IRS officials like the commissioner and deputy commissioner aren’t willing to get involved in church audits.
Enforcing the Law
In 2007, the IRS launched an investigation into Minneapolis-based Living Word Christian Center after the church’s pastor, Mac Hammond, openly endorsed former Republican presidential candidate Michelle Bachmann from the pulpit.
The case was thrown out after the church successfully defended itself, pointing to the provision requiring church investigations to be approved by a high-level IRS official, which was not the case.
According to a Government Accountability Office report, the IRS suspended new church examinations between 2009 to January 2013 in the wake of the court ruling. No church audits were conducted during President Barack Obama's first term and only three were conducted between 2013 and 2014.
(Under President George W. Bush, the IRS threatened in 2004 to revoke the tax-exempt status of All Saints Episcopal Church in Pasadena after a parishioner delivered an antiwar speech criticizing President Bush two days before the election.)
After the court ruling, the IRS proposed a new regulation to designate a different official to sign off on church examinations, but the policy has not been approved by Congress.
Owens said despite the faulty oversight of church politicking, it was still irresponsible for Bevin to advise pastors to violate the law.
“If you as a pastor are out there and you listen to the governor and you accept legal advice from a non-lawyer who knows nothing about tax law or tax law history, you’re actually rolling the dice that you won’t do something sufficiently flagrant that a deputy commissioner will sign a letter authorizing an audit of the church,” Owens said.
Speaking about political issues isn’t barred by the Johnson Amendment, but endorsing candidates and using church funds to support or oppose a candidate is.
But even endorsing candidates often doesn't go unchallenged.
Some pastors openly endorse candidates from the pulpit during an event called “Pulpit Freedom Sunday,” which is organized by Alliance Defending Freedom and designed to draw a lawsuit from the IRS, but the agency has ignored it.
A recent Washington Post article also highlighted Rabbis debating whether to violate the Johnson Amendment to speak for or against candidates during Yom Kippur this year.
Owens said higher-profile examples of using church funds or facilities to promote or oppose a candidate would be more likely to draw the attention of the IRS, like when a church took out a full-page ad in USA Today urging voters not to support Bill Clinton for President.
“The IRS basically follows the money and if it doesn’t involve money, you’re apt to get a ‘don’t ever do this again kind of warning,'” Owens said. “But you never know. So it’s a risk."
For his part, Bevin said he wasn’t encouraging pastors to violate federal law in his speech given to Kentucky pastors. According to his press secretary Amanda Stamper, “The Governor simply encouraged the ministers to preach boldly.”
