At the National Prayer Breakfast February 2, President Trump pledged to repeal the “Johnson Amendment,” a provision added in 1954 to the Internal Revenue Code that is the statutory basis for the IRS to deprive a church of tax-exempt status if it does not comply with the Amendment’s absolute prohibition on any political engagement that is not bipartisan. Tax exempt (501[c]) status does two things: it frees the entity that enjoys it from federal income tax and allows donors who contribute to that entity to treat their gifts as tax deductible. To lose status under §501(c) of the Internal Revenue Code, therefore, is a double-whammy: the entity itself incurs taxes and those who support its work cannot benefit tax-wise by their donations. §501(c) entities are the most common non-profits under the tax code; they include charitable foundations, universities, and churches, i.e., bodies that perform charitable works, works that benefit society.
The Johnson Amendment was quietly slipped into the Internal Revenue Code on a July Friday by the senior senator from Texas, Lyndon Baines Johnson. Johnson admitted the bill “seeks to extend the provisions of section 501 of the House bill, denying tax-exempt status not only to those people who influence legislation but to those who intervene in any political campaign on behalf of any candidate for any public office.” The Congressional Record shows no debate: Johnson proposed the amendment, the leadership registered no objection to instructing the Senate to try to add it to the final version of the bill, and then “[t]he amendment was agreed to.”
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