Nonprofits operating under I.R.C. 501(c)(3) are obligated to comply with several rules as a condition of tax exemption. One such rule, known as the Johnson Amendment, prohibits organizations from participating or intervening in any political campaign on behalf of or in opposition to a candidate for public office. The prohibition is absolute. There is no allowance for even minimal intervention, and it applies to churches and other religious organizations on the same terms as any other 501(c)(3), notwithstanding the greater legal protections religious organizations are typically afforded in other contexts.
That rule was tested again this year, and it survived, though not without some confusion along the way.
What Happened – The Challenge
In August 2024, two Texas churches and the National Religious Broadcasters sued the IRS, arguing that the Johnson Amendment violates the First Amendment’s protections of speech and free exercise of religion. Rather than defending the statute, the IRS entered into a proposed consent judgment with the plaintiffs. Under that agreement, the IRS would not enforce the Johnson Amendment against the plaintiff churches for speech made to their own congregations, through customary channels, during religious services.
That proposal never took effect. On March 31, 2026, a federal judge in the Eastern District of Texas dismissed the case, ruling that the court lacked jurisdiction to approve a consent judgment that would interfere with federal tax assessment and collection. The Johnson Amendment remains fully in force for churches and every other 501(c)(3) organization.
Why the settlement approach was always shaky
This is worth pausing on, because it echoes something we have seen before. In 2017, President Trump issued an executive order instructing agencies not to take adverse action against religious organizations for speaking about moral or political issues from a religious perspective. That order was widely reported as gutting the Johnson Amendment. It did not. The Justice Department itself later admitted, in briefing, that the order merely directed the government not to treat religious organizations differently than it would treat any other 501(c)(3) in enforcing the existing rule. Nothing in the statute changed.
The 2026 consent judgment had a similar problem, just approached from a different angle. An agency’s decision not to enforce a statute against a specific plaintiff is not the same thing as changing the statute, and it does not bind the agency’s conduct toward anyone else, or its own conduct going forward. Even if the settlement had been approved, it would have applied only to the two named churches, under a fairly narrow set of facts. It would not have amended Section 501(c)(3), and it would not have protected any other organization that assumed the same latitude applied to them.
Only Congress can repeal or amend the Johnson Amendment. Everything short of that, whether an executive order or a negotiated settlement, is enforcement posture, not law.
What is actually coming
Treasury has announced it intends to issue formal guidance for houses of worship on how the Johnson Amendment applies to communications delivered during religious services. That guidance is on the 2025-2026 Priority Guidance Plan, but as of this writing it has not been issued. Until it is, the existing framework controls, including Revenue Ruling 2007-41, which lays out the IRS’s facts-and-circumstances approach through 21 examples covering voter education, candidate appearances, issue advocacy, and the use of organizational resources.
In the meantime, the boundaries that have applied for decades still apply. A 501(c)(3), including a church, may register voters on a nonpartisan basis, host candidate forums that treat all candidates equally, and address issues of public concern, including issues with clear moral or religious dimensions. What it cannot do is endorse or oppose a specific candidate, in the pulpit, in a newsletter, on a website, or anywhere else, regardless of how the message is framed.
The practical takeaway
Nothing about this litigation changed what your organization is permitted to do. If your board or clergy leadership has been operating on the assumption that the rules loosened this year, they have not. The Johnson Amendment applies in full, the same as it did before this lawsuit was filed, and will keep applying unless and until Congress acts or the promised Treasury guidance narrows it in some defined way.
If your organization is planning election-related programming this year, whether voter registration drives, candidate forums, or issue advocacy tied to a ballot measure, it is worth having that plan reviewed before it launches rather than after. The line between permissible issue advocacy and prohibited campaign intervention is fact-specific, and the consequences of getting it wrong, including loss of exemption, are not something any organization wants to test.
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C., licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on federal tax and fundraising regulations nationwide. Ellis also advises donors concerning major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form. This post is for general informational purposes and does not constitute legal advice.