Churches and the House Appropriation Bill

Last Thursday, the House passed an appropriation bill for fiscal year 2018. The vote was close—211 to 198—and it’s not clear that it will pass the Senate in any kind of recognizable form. Still, the bill has at least some relevance to churches.

See, sections 101-116 attempt to regulate the IRS, and section 116 would largely eviscerate the so-called Johnson Amendment.

A little background before we get to the meat of the post, though. First, what is an appropriation bill? It’s a proposed law that authorizes specific government spending.

And how about the Johnson Amendment? I’ve written about it several times on BCC; essentially, it’s the rule that tax-exempt organizations (including churches) can’t support or oppose candidates for office and, if they do so, they lose their tax exemptions.

Getting rid of it has been a big deal in GOP circles, and Trump has promised to “totally destroy” it.

But the appropriation bill can’t do that. So what does it do? Essentially, it limits the IRS’s ability to spend appropriated money on enforcing it. Interestingly, it doesn’t entirely forbid the IRS from enforcing the campaigning prohibition, though it could. In several other sections, the bill flatly prohibits the IRS from using appropriated funds to enforce certain provisions of the tax law (including the ACA penalty for not maintaining sufficient insurance).

Here, the House would set up hoops for the IRS has to jump through to use appropriated money to enforce the campaigning prohibition. Specifically, the IRS couldn’t revoke a church’s exemption for violating the campaigning prohibition unless (a) the Commissioner of Internal Revenue consented, and (b) within 30 days of the determination, the Commissioner notified the House Ways and Means Committee and the Senate Finance Committee. And the revocation could not happen less than 90 days after that notification. (Note that this is on top of a fairly onerous set of rules governing how the IRS can start and engage in a church audit in the first place.)

A couple things to underline here. First, revoking a church’s exemption for violating the Johnson Amendment is tremendously rare. Like, it has happened once that I’m aware of in the 60+ years that the rule has existed. So even a complete destruction of the rule would barely affect enforcement.

At the same time, this is potentially a more-significant move than the change in enforcement would make it seem. It’s an, if not explicit, at least implicit, blessing on churches campaigning. Moreover, it changes the cost-benefit analysis by significantly reducing the risk of a church losing its exemption. So on the margins, at least, it means that more churches will engage in politicking, and those churches that use the Johnson Amendment as an excuse not to engage in partisan politicking have a significantly smaller backstop for that excuse.

(Btw, if you’re interested in some of the other ways the appropriation bill would regulate IRS activities, I have a post at Surly.)

(h/t on the story to Jack Jenkins.)